Criteria

Degree of Economic Free

Ownership of Means of Production

Role of Price in the System

Role of Government

Trade and Investment Policy

Fiscal and Monetary

Decision Making Structure
Mechanism for
Information and Coordination
Property Right
Incentives
Public Choice

Free Market (Capitalistic)

Mixed market

High

Medium

Bias toward
entrepreneurial innovation
Individual
The Doctrine of Laissez-Faire

Determined by government

Profit Motive

Profit Motive but

partly by government

Low
governmental interference

High
governmental interference

Applies the invisible hand,

laissez-faire, property rights,
and individualism

Goal of balancing economic

efficiency but protecting against
the excesses of greed and
selfinterest

Capitalism

Socialism

Primarly Decentralized

Primarly Decentralized

Primarly Market

Primarly Market

Primarly
Private Ownership

State and/or Collective

Ownership

Primarly Market

Material and Moral

Democracy

Democracy

Command Market
Low

Bias toward largescale,

capital-intensive production

By government
High
governmental interference
Applies the visible hand of
the state, central
planning, and collectivism
Communism
Primarly Centralized
Primarly Plan
Primarly
State Ownership
Material and Moral
Dictatorship