Economic Systems

Economic Systems

1. Capitalist economies offer the most economic freedom.

   • The people decide what they would like to make, where they would like to sell it and how much it will cost.
   • The United States has a mainly capitalist economy.
     • The United States is one of the strongest capitalist companies as the citizens have the freedoms to start and build their own business. Here we can produce and price our own products.
     • The problem with being 100 percent capitalist is that the government cannot take charge of any part of the economy or monetary supply. In this way, the United States is a mixed economy.
       • The U.S. holds some socialist value through providing services such as social services, welfare and government healthcare. They also take some taxes from the citizens to these means.
   • A Capitalist system is ideal for those who want to work hard and are capable of doing so, however, it does not care for those who do not work or are unable to do so.
   • Capitalism requires three factors (Nickels & McHugh. 2016)
     • "1. The right to own property."
       • "2. The right to own a business and keep its' profits."
         • "3. The right to freedom of choice."
   • England is considered having a capitalist economy because its' citizens have economic freedom. For example, they can start a business and sell items for prices they chose.

2. Socialist economies offer freedoms to produce specialty or highly specific goods and services.

   • The government is in charge of large scale production and business, while the people may open small businesses for specific items.
   • Russia is a country operating under a socialist economy. The government is in charge of large scale business and manufacturing, while the people have begun building smaller businesses.
     • Their Socialist view can be summed up in a quote by Bodrunov "To supplement the self-regulation of the market, our country needs both stimulation of business and limitations on it, consciously imposed by the state."(Bodrunov. 2017)
     • According to Bodrunov, Russia also relies much more on technology and trade between countries than when it was in its' previous more communist state. (Bodrunov. 2017)
     • In Russias economy, the poor greatly outnumber the rich and have difficulty rising in class.
   • In a Socialist government, citizens have access to free healthcare and free education.
   • Citizens may be taxed as much as 60% of their pay for their government benefits. (Nickels & Hugh. 2016) They rarely achieve much growth within their career field. Business ownership will be dictated by the government and will only occur in small or local specific business types.

3. Communist economies offer the least amount of autonomy.

   • The government decides what will be produced, by whom and how much will be produced.
   • North Korea has a communist economy. The individuals have access to what the government allows. Because of this, many citizens are poor.
     • According to Nickels & McHugh (2016), South Korea's economy is doing very well, and North Korea is significantly behind. p.30
     • North Korea has significantly fewer businesses and technology than capitalist countries.
     • North Korea also has more poor people.
   • Under this type of economy, people do not have to choose their career path. Health care is covered and necessities will be provided at one price.
   • In a communist economy, individuals cannot start their own businesses or learn what they would like. There are often too many or too few goods to go around due to lack of "supply and demand" systems."

4. Each economic system hadles the factors of production differently.

   • Most economic systems in present times are a mix of two or more systems in some way. It is impossible for the government to stay all business and decision making.
   • For example, a capitalist economy puts much of the production and pricing power in the hands of the people, communist, in the hands of the government and socialist is mixed.
   • Caplitalist economies tend to run in a Free market fashion because goods and products are produced at prices and quantities that will satisfy the consumer and producer.
   • Socialist economies run closer to a demand supply system as smaller companies are sometimes produced to meet demand. Prices are set by both demand as well as government.

5. Economics systems are important in dictating how individuals and businesses operate within the market.

   • Economic systems can make a country wealthier by providing jobs and creating needed goods.
   • A country uses an economic system to decide if and how they will provide for their citizens.
   • Economic systems provide the ground rules for commerce, production and trade both locally and internationally.