A natural disaster strikes In the richest country on the planet! A government’s response to a crisis Is contingent on Its economic system! A senior excellent wonders If they should turn the heater on In the middle of winter what do all these events have in common?
They all have to do with Business. As everyone goes on with their daily activities, many are unaware that business is a part of their everyday life. From something as simple as being comfortable on a cold evening, to the efficiency of emergency response to a disaster, business is involved in one way or another.
Therefore, from a business standpoint, we’ll examine the following; which economic system is best suited for handling a major crisis, such as a natural disaster; why a socialist system might be the best in responding to the needs of people struck by an emergency situation like the earthquake that occurred in Haiti in January 2010; lastly, we’ll use the laws of supply and demand to explain why the cost to heat our homes and businesses goes up in the winter time. There are many disasters, natural or man-made, that can disrupt the lives of a country’s citizens.
The type of economic system utilized by a country can be a significant factor in how its government responds too major crisis. When it comes to which economic system is best in responding to a crisis, a mixed economy takes the lead for the following reasons; the government’s role is to assist in the economy prosperity, as well as protecting consumers; financial assistance is provided to consumers, and businesses are allowed and encouraged to profit from natural starters, which, by doing so, supplies and services can be adequately provided while maintaining the incentive of profit.
According to Matthew Luther-Paulson, a Junior college adjunct government Instructor, states “Mixed economy Is the economic system that Is best able to adapt and respond to natural disasters because It combines the growth and freedom allowed by a free market economy while providing a safety net when disasters occur. ” Although the earthquake that hit Halt In January of 2010 was a tragedy In Itself, he Inefficient response from the Haitian government exacerbated the catastrophic conditions the citizens had to endure from this disaster.
Wait’s government is people elected deputies (representatives), not the people themselves, vote on legislation. Because Haiti ranks as one of the highest corrupt nations (Transparency International, ICP 2012) in the world, the government does not have a competent system to deal with natural disasters. During a catastrophic event, a Socialist system might be the best in responding for several reasons.
A Socialist state owns and intros the means of production as well as distribution, therefore allowing for a more Just and equitable distribution of relief supplies to those affected. Additionally, the state also controls resources, such as military or medical personnel, that allow manpower to be sent for relief efforts as well as to maintain law and order. Through the laws of supply and demand, prices for goods and services are normally determined by intersecting the supply curve and demand curve, with the equilibrium price being the result of where the intersect occurs.
With this explanation, we can see that when the cost to heat our home or business goes up in the winter time, the rise in cost (equilibrium price) is due to the increased use of natural gas (demand), thus, the gas company will increase the production of natural gas (supply) to meet the needs of its customers. By changing the curves of supply and demand, this action will cause the equilibrium price to also change. In conclusion, a country’s economic system has a wider effect on its citizens than just a form of production, distribution, and consumption, as apparent when a assister strikes.
Just as the economic system has an effect on a country’s citizens during a catastrophic event, the political system exercised can be instrumental in the response of such crises. Having a general understanding of the laws of supply and demand, one can logically reason why costs can change for goods and services, even at different times of the year. Finally, business is a practice man has participated in since the first trade was ever done and will be a part of daily life for as long as man is resent on this planet, making it business as usual!
