Economic Systems

Economic Systems

1. Traditional

   • Example
     • Most areas that rely on a Traditional Economy are indegious in nature. Tribes in the Arctic, North America, and eastern Europe all take part in a traditinal economy.
   • Pros
     • A team based economy that causes little to no friction within its confines. "Rules and regulations" are based on tradition and customs.
     • All memebers are aware of what they should recieve and understand that even if these parameters are not met this is the way their society has functioned for generations.
     • Because of their small size they are sustainable so long as their recources remain availlable.
   • Cons
     • Rely heavily on resources and can be afffected by natural changes within their community.
     • Can be consumed by larger more dominent economies.
   • Definition
     • This system like its name relies on customs, history, and the beliefs that have been passed down from previous generations. This economy relies on historic markets such agriculture, fishing, and hunting/gathering. Bartering is the preferred currency.

2. Command

   • Pros
     • Large Scale projects are easily planned and completed.
     • Are not slowed or governed by lawsuits.
     • Because this economy is mostly governed by the goverment there is conformity this results in compelte functuality.
     • Workers are assesd and given jobs that fit their skils.
   • Cons
     • Societal needs are left ignored.
     • Because of the lack of products in demand black market run rampant.
     • Because production is so focuesd on certain products there is usually a lack of diversity and results in a surplus.
     • Lacks the global ingenuity to meet international needs.
   • Example
     • Many countries are moving away from command economies but one country still opperating in this way is Belarus. The governtmnet owns a whopping 80 percent of its business and 75 percent of its banks.
   • Definition
     • An economy fully controlled by the government. This control includes what to produce, how to produce it and how these goods or services are distributed. The system most associated with a Command economy is Communism.

3. Market

   • Example
     • When it comes to Market Economies the United States is at the forefront. The constitution is one of the main reasons for the successful implemantation of a Market Economy.
   • Pros
     • Products are produced in the most efficent way possible.
     • Rewards innovation by giving the customer what they want.
     • Produces the most desired goods and services.
     • Every new advancement forces other business to increase their technological development.
   • Cons
     • Those who are at a competative disadvantage have no system of support.
     • Those who may be capable of greatness are forced to take whatever is given to them to meet their needs.
     • This economy must decide if its captial or its people are the most important aspect of itself.
   • Definition
     • An economy managed by supply and demand. Businesses sell their goods or services at the most expensive price a consumer is willing to pay. Along with this purchasers seek the lowest price available. Each part looks to get the best deal for themselves.

4. Mixed

   • Example
     • As Stated most economies are mixed economies. Some examples include Iceland, France, United States, and Russia. Each of these economies differ in the amount of government and free market guidence.
   • Pros
     • Prices are measured by supply and demand.
     • The most efficent producers are rewarded with the highest profit. In turn customers get the best value available.
     • The governemnt is afforded the ability to protect less competitive businesses.
     • This type of economy promotes innovation.
   • Cons
     • Being that it is a economy that borrows from other economies it can suffer the same disadvantages as those it borrows from.
     • The government can be swayed into supporting one business more than the other hurting the one with less support.
     • The potential for government-subsidized monoplies exist.
   • Definition
     • A system that shares responsibility. Specific portions of the economy are guided or regulated by the government while the the other portions are guided by the free market. Most economies are Mixed varying slightly from one another.

5. Importance

   • Economic systems provide a platform for humanity to continually evolve. This base of living regulates and promotes growth.