The Free Market Economy

A few points
resources are privately owned
the individual interest is the economic driven (laissez faire)
all of the economic activities are in the market mechanism
profit is the main goal
security, enforcing the law, and he public works are the government responsibility
freedom of enterprise: kebebasan perusahaan
monopoly
income distribution discrepancy: kaya semakin kaya, miskin semakin miskin
labor exploitation
The Government Roles in Free Market
Provide the social and the legal framework
Maintain the competition
Provide the public goods and services
(-) masyarakat rendah inovasi karena semua disediakan pemerintah
Income redistribution: saat terjadi gap antara yang kaya dan miskin maka ada upaya dari
pemerintah yakni pajak (semakin besar income semakin besar pajak)
Overcome the externalities: perusahaan seringkali memberi dampak eksternal di
sekitarnya, maka pemerintah berusaha menanggulanginya
Stabilize the economy: ketika terjadi krisis ekonomi maka pemerintah turun tangan
The Command Economy (Ekonomi Terpimpin)
There are no social classes: tidak ada kesenjangan
High collectivity: kebersamaan diutamakan (semua orang punya kesempatan yang
sama)
The government determine the type, quantity, and for whom goods and services are
produce: pemerintah menentukan apa, berapa, bagaimana, dan untuk siapa produk-
produk perekonomian yang ada di negara
The sate owns the resources
Low in income distribution discrepancy

Disadvantages Advantages
Bureaucratic: banyak birokrasi dan Easy to manage the inflation,
kesulitan dalam administrasi unemployment, etc
Low Productivity: diatur oleh negara
Individual has no freedom: diatur negara
The Mixed Economy (Sistem Ekonomi Campuran)
Combine some aspects from each pure economic system
This system will have both of private enterprise and state-enterprise
High creativity because of the fair competition
Evade the monopoly and the government dominance
There are boundaries in government and private activities