Both of these economic systems has its advantages and drawbacks. In the case of Soviet controlled Eastern Central Europe, due to having a strong central government that has a tight grip on economic activities and productions, the government would have a significantly more say in the overall economy such as private ownership as a way to plan the distribution of resources to, supposedly people of more dire need. Which, in turn, creates a very effective chain of command up from the central governments to the lower municipal governments. The municipal government, in this case, only had to obey orders from the central planning committees rather than deciding for itself of what may be more suitable for themselves. The pure effectiveness of this system is an attraction because regardless of whether if its the right thing to do, it does get the job done, it is much like the modern-day China. Also, similar to modern-day China, the central government, or particularly, the standing committee of the politburo of the Chinese government, the body that makes the majority of the country’s decisions, are all well aware that making its citizenry lives a better life than their predecessor is the key to their governing legitimacy, which massively differ from the then-Soviet Union’s satellite states. In the U.S, our system of governance and economic policies are, at the very least, from the perspectives of the founding fathers, meant to be slow so that way it does not create massive changes overnight that disrupts the economic life of its average citizenry and to avoid governing intuitions making a completely 180 degree turn of policies overnight, affecting overall consumer and producer’s economic confidence. Although, I would have to say, this process of “slow and steady” is starting to deteriorate in recent decades, especially after each presidential elections and the changing of cabinets.

Responses to the professor or other students:

That’s a very interesting perspective. Although, I do want to say that, welfare is only good under two harsh conditionals. First one being that the state is able to afford such expenditures in comparison to its overall economic prosperity and its relative projected growth. Second, and the most important factor, at least in my opinion, is that the workers remain optimistic and eager to work rather than sitting on the welfare program and leaving the government to dry or to accumulate massive debts. The modern-day Venezuela is a good example of this very concept in practice. In the early 2000s, Venezuela was a very rich country with a massive amount of oil reserves. Even to this date, Venezuela is still considered one of the largest oil producers due to its abundance of reserves. And with the Gulf War in the 1990s, the oil supply grew increasingly tight, thus leading to a rapid increase in oil prices around the world. Venezuela was able to capitalize on that high oil prices and help fund massive government led social welfare programs that aimed at reducing poverty and improve access to healthcare, very much the type of things that we all desire. Initially, it did lift many average Venezuelan out of poverty, but that was very short lived because the central government did not have much foresight in diversifying its economy with its newly acquired wealth and remained heavy reliance on oil revenues. And when the oil prices finally dropped in the latter early 2000s, Venezuela plummeted into a massive and prolonged economic recession; a long lasting pain, that is still felt to this date by average Venezuelans.