Which of the following explains why a free market economy is more efficient than a centrally planned economy?
Answers
Answer:
Explanation:
People have been arguing the market vs. planned (or even command - see definitions below) economy dispute for a century or more. It’s one of those many issues in politics that seems to be unresolvable. Maybe the dispute can never be resolved, given the tremendous subjectivity of political arguments. Or, maybe it’s unresolvable due to the complexity of economic systems, nations and societies. Nonetheless, there is an objective basis from which to consider the matter to get at a defensible answer. The objective basis is grounded in mathematics or logic, information theory and human cognitive and social biology.
The math-logic is settled and not in dispute. No set of rules or logical constructs, including economic rules or theory, will ever reach ultimate truth or full knowledge. Based on current knowledge achieving that is impossible, at least in this universe. That flows from mathematician Kurt Gödel’s 1931 research article on undecidable propositions. Economic theory is one of those sets of rules. There can’t be perfect knowledge about economic systems.