Literature Case

Economics remains a major topic to be studied by the human race. This is because of th scarce resource vital for the survival of human beings, as they have to ensure an economy that has a prevalent resource system, which is sustainable. The present economics is disgraceful with rampant cass of poverty as majority of political leaders tend to adore dollars. In the past centauries there is a new emergence of a phenomena that has permanently and fundamentally changed the society called free market capitalism. The writings of classical philosophers in economics like Adam Smith has enabled the free market economy to be practiced all over the world. The results being a dramatic increase in both individuals as well as government's wealth. In relation to Adam Smith, he believes wealth is easily divisible in three parts with each arising from their respective sources. It is evident that land tends to yield wages associated with labor, economic rent together with interest on capital yields. All these challenges necessitate the need for a new paradigm in economics.

The wealth division is referred to as functional wealth distribution as land rent is often created by the society together with nature as wages and interests tends to be established by individuals. Functional distribution of wealth should not be confused with the distribution of personal wealth, which is often a common occurrence. For instance, profit considered an ultimate goal in an economy viewed as a free market is linked to individual wealth distribution. In most cases, profit should be considered personal and not equated to functional wealth distribution as it comprises of returns to all production factors (Caves & Porter, 1978).. In spite of a remarkable wealth increase, free market economy seems to be faced with numerous struggles from its inception. As much as the western capitalistic mechanism is considered to work more effectively compared to communism and socialism, there are two weaknesses involve with the concept. These are the boom lump and cycle coupled with the gap between the poor and the reach increasing daily (Papandreou, 1999).

The cause of the two major flaws in an effective resource system of allocation can be traced to the creation of a public system of finance that entails the rent of land being retained as a government revenue source. Market economy is significant in transforming people's lives with a danger of adopting features in the economies that prevent people from being prosperous. Specifically, there is a danger in cases where the collection of land rent is done in private. Other market economies are fond of collection of a small land rent portion, which leads to unreasonably usage of taxes, which slow down their economies with taxes on income, capital value and sales. There should be a single tax the entire value of land to regulate distinctive land qualities in an economy with a free market. (Papandreou, 1999). Prior to any analysis there is a need for explanation for differences to be outlined as failure in understanding land unique qualities remains a major cause for boom slump in the business cycle. This also involves the common wealth gap found in economies with free market as understanding of land together with proper regulation in relation to tax on land value can eliminate the flaws. Land is not pegged to any production cost because is not produced by any other person. American Economy

The American economy has seen tremendous changes in the late nineteenth as well as the beginning of the twentieth century. The country changed from a rural agricultural country to an industrialized giant, to become a top manufacturing nation in the world. Various important developments characterized the tumultuous period. The early economy of America was characterized by local markets, which were small and centered near big cities. The extensive expansion witnessed in railroads during the late 1800s seemed to change the situation . This was possible in bringing the country together to become a single national market, which could permit goods to be shipped across the nation for sale. The railroads offered a remarkable momentum to financial development because of their provision of substantial market commodities such as lumber or steel.

Late Nineteenth- and Early Twentieth-Century Economic Trends

The railroads depicted the first large close of business, as the industry remained the largest sole employer in relation to labor in America. The situation helped in standardizing America finance, social and cultural aspect. The speedy railroad expansion resulted to extensive land made accessible for commercial agriculture. There were twelve new western countries added in the union from 1867 to 1912. The year 1890, remains a major turning point that brought the Indian resistance to an end and the American frontier closing. The west seems to have been populated with no unsettled frontier area. The expansion of the country and industrialization led to increased emphasis on mass production and distribution.

The speeding of production as well as increased goods output led to maximize profits and low costs. The situation resulted to mass production as factory owners found themselves in a situation, which goods production was more compared to market absorption. They had to increase the demand of the consumers by embracing advertisement to influence consumers on the need for new products from the assembly lines associated with the factory. Brand names, slogans, trademarks, celebrity endorsements, guarantees, and other publicity stunt were instrumental in potential customer's enticement. The anticipated expenditures in relation to advertising increased from $682 million to $3 billion. The period witnessed gigantic corporations' growth that conquered major industries. Strategies like vertical integration, aggressive competition, and horizontal integration were common.

Industrialists like Andrew Carnegie associated with steel established enormous financial empires, with centralized power in their hands. Many industries afflicted by the current trend as more financial power was attributed to few individuals. The power concentration troubled many Americans, and led to reform cries, as Rockefeller was keen in defending the trend by consolidation. The nineteenth century saw a change of small workshops operated by independent and skilled artisans in relation to large mechanized industries. This led to an increase in employed individuals in semi skilled laborers, which was termed as deskilling. The Ford Company dealing with vehicles was founded in the year 1903 with only a hundred employees. The year 1924, saw the company employing around 42,000 personnel with their other branch employing 65, 000, which made it become the biggest factory in the entire world.

The need for skillful employees