and how it affects you
What does this mean?
what are the benefits?
There is no waste
Everyone is economically equal
Things will be done faster and more easily
Innovation will go through the roof
You will not always have to hurt people in order to benefit (Pareto Efficiency)
Are there negatives?
It is unlikely to ever occur because the economy is run by humans who tend to think irrationally
Most companies choose to have variety and never try to be efficient
In Pareto efficiency, if someone is being helped, another is harmed
How does this apply to the real world?
India has a relatively stable democracy, and after the low GDP growth in 2013, the prime minister said that he was going to implement economic reform to attract investment. It is known that India is significant in World Trade, but the economy operates below it’s said potential. India has kept their economic freedom level the same for over 5 years, and it is unlikely that they would ever change it. India (and many other economic networks) may not feel comfortable changing their entire system if they know it works now, but may not if they change it. In fact, most places adhere to a "If it ain't broke, don't fix it" mentality.