Economic Systems

Economic Systems

1. Capitalism: Privately owned property

   • Capitalism can be defined as an economic system where  An Example of a Capitalist economic system is the United States.
   • Pros
     • Best products
       • Since there is the incentive of success, recognition, and profit, there is more innovation to create better products while simultaneously reducing the cost for the consumer.
       • Competition
         • The advantages of competition is the price, quality, and availability of the products.
         • More profit
           • More Freedoms
   • Cons
     • More risks
       • Since businesses can be privately owned, the owner runs more risk of monetary loss, their name suffers, and they also run the risk of failure.
       • Only benefits the "go-getters"
         • This system helps the ambitious people, but it also leaves the children, elderly, and disabled without proper care.
         • Inequality
           • Impoverished folks do not grow up with the same benefits as the wealthy, such as food, food quality, clean water, clothes, and quality education.
           • World Issues
             • Capitalism often ignores world issues such as climate change and pollution to achieve the best price. Which ultimately, hurts the world's natural resources.

2. Socialism

   • Socialism can be defined as shared ownership and central planning. Examples of a Socialist economic system is Sweden, Norway, and Denmark.
   • Pros
     • Equality
       • Since the government has more control, there is less exploitation of it's workers, and profits are shared with their workers.
       • Poverty elimination
         • Every citizen is provided with the same chances as everyone else. Healthcare and education are provided by all.
         • Dream Jobs
           • Everyone works jobs that they love or provides more wage for those unwanted jobs.
           • World issues
             • This system helps preserve natural resources.
   • Cons
     • Cooperation
       • This system requires cooperation from all citizens in order to succeed.
       • Lack of competiton
         • Since everyone is treated the same, there is a lack of competition among the citizens.
         • Lack of rewards
           • Lack of innovation
             • With lack of competition, lack of rewards, also comes lack of innovation. The citizens don't have any incentives for working harder.

3. Communism

   • Communism can be defined as an economic system where the collective owns all the property. Examples of a Communist economic system is China, Cuba, and Laos.
   • Pros
     • Less risk
       • Since the government controls everything, it's citizens don't run the risk of loss if their business is unsuccessful.
     • Centrally planned economy
       • This is imperative when trying to realize a goal. The system can quickly mobilize to achieve it. This is especially true after wars where the government takes control to quickly rebuild itself.
   • Cons
     • Government controlled
       • the government controls the prices, and supply, which sometimes leads to businesses running out of supplies when the demand is too great. This also leads to creation of black markets since there aren't enough resources to go around.
       • No free market

4. Mixed Economy

   • The United States have a mixture of all economies. It used to be purely capitalism, but has involved since.
   • Pros
     • Supply and demand
       • resources go where they are most wanted or needed.
       • Rewards
         • Citizens are rewarded for their proficiency, efficiency, innovation, and work ethics. This incentive makes people want to work harder, smarter, and want to create things.
         • Competition
           • Competition leads to better products, pricing, and availability.
           • Government
             • Some government controls allows for allocation of resources to defense, technology, and aerospace programs that benefit the system.
             • Better care
               • When the government is more involved, its citizens get better care, especially those disadvantaged individuals who lack the competitive skills to take care of themselves.
   • Cons
     • Too much Freedom
       • Too much freedom can result in the government not being able to control the resources.
       • Debt
         • More freedom and more profit for it's citizens, does leave the government at a deficit which increases the national debt.
         • Government bailouts
           • When businesses take on too much debt, they can lobby for tax cuts and government bail outs which further increases the national debt.