ECONOMIC SYSTEMS 1

Economic Systems

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Economic Systems

Introduction

Economic systems are the mechanisms through which society and governments trade

resources, services, and goods. Economic systems entails capital, labor, and resources (both

physical and non-physical), labor and capital. A community's economic structure is made up

of a lot of different groups which includes agencies, decision-making processes,

organizations and consumption habits. The economic system is made up of all of these

components. Rosefielde (2008) distinguishes between three different economic systems. In

Rosefielde's work, three fundamental economic systems are identified: market, planned, and

mixed. Pryor (2006), on the other hand, adds to the list a traditional economic systems.

Planned system

Governments reign in this system (communism) (communism). All or some goods

and services must be planned, according to the government. People are employed by the state

in communist nations. The government owns the majority of the businesses, if not all of

them. For instance, the government establishes who owns firms, who purchases and sells to

whom, and who makes the final business choices, including who works for them (Rosefielde,

2008). From invention to delivery, the government governs every facet of a product or

service.

According to Pryor (2006) only a few governments (such as North Korea and Cuba)

still maintain tightly regulated economy, implying that communism is a thing of the past.

Everything is well since the central authority acts in the public interest. It seems that this is

not the case. A government-run economy can only go so far in terms of reform. They are

sluggish to adapt because power is concentrated in a few hands. They are in jeopardy because

they are unable to respond quickly enough to economic shifts or crises.

Market system
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Market-based economic systems cannot function without free markets. As a

consequence, the government has little sway. Here, the government's control over resources

and the economy is restricted. The rules of this ecosystem are determined by humans and a

mix of supply and demand. Ideas are the foundation of markets. That is, no pure market

system operates in this manner. Why? In all economic systems, the evidence points to central

government involvement in the economy. Most nations have anti-monopoly and fair trade

laws. A market economy, in principle, promotes fast growth (Rosefielde, 2008). There is a

possibility that growth and free markets are connected. One of the primary disadvantages of a

market economy is that individual firms, especially rich ones, have great power. It is unjust

that the wealthy get the lion's share of available resources.

Mixed system

In hybrid economic systems, market and planned economies coexist. As a

consequence, "mixed systems" is referred to as "dual systems (Rosefielde, 2008)." The term

is widely used to describe a government-controlled market. A fusion of components may be

seen in some rich Western countries. While many businesses are privately owned, the

government owns a large number of others. Mixed systems are the norm, not the exception,

across the world. The market and command systems are combined in a hybrid system. Hybrid

economies, on the other hand, struggle to combine free markets with government supervision.

As presented by Zhao (2010) governments often go above and beyond their statutory

obligations.

Conclusion

Planned, market, and mixed economic systems are the three types of economic

systems (market). Traditional systems rely heavily on concepts and traditions. In a market

system, however, a single person cannot influence supply and demand dynamics. Hybrid

economies, on the other hand, mix command and market economies. The majority of
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countries, including the United States, have a combination of free market and planned

economies. In a hybrid system, there is a lot of disagreement over how much government

should do. Assuring that commercial or governmental institutions supply particular items and

services, such as health care.

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References

Rosefielde, S. (2008). Comparative Economic Systems: Culture, Wealth, and Power in the

21st Century. Chichester, UK: Blackwell Publishers.

Pryor, F. (2006). Economic systems of developing nations. Comparative Economic Studies,

48(1), 77-77.

Zhao, S. (2010). The China Model: can it replace the Western model of modernization?

Journal of Contemporary China, 19(65), 419-436.