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Hi everyone!! I have an essay to write for school and I was wondering if I could get your opinions on it.... The topic
is: In your opinion, what economic system would truly benefit mankind and why?
The different economic systems are (in case anyone didnt know): Capitalism, Socialism, Communism, and Mixed Economy...
Normally I would look this up on my own but I am soo busy lately so I dont have the time. I would really appreciate all
of your help!^^
~thank you~
in theory Communism is the fairest and best economic system..everyone is equal, now, me having lived in a communist country, know that that system just doesn't work..whoever thought of it totally overlooked human nature, as far as the world is concerned the best economic system so far is capitalism.
I just did my econ exam paper 1 today. I answered a very similar question. lol
Market economy, which btw means capitalism with minimal gov restrictions, so a mixed-lite.
This system sets the socially optimal price and quantity produced by the laws that govern supply and demand. Rather than having a gov determine everything, the market itself answers the 3 basic economic questions: what to produce, how to produce, and for whom to produce. As each firm produces according to its own profit maximization point, and as consumers try to get the best deal for their needs, society thus determines how best to achieve both allocative efficiency as well as productive efficiency and thereby allocates the best resources to the best production possibilities.
Two. Competition. Each firm has now the incentive to compete to maintain current customers and to attract new ones. To do so, technological innovation occur. Quality of product or service is ensured. In addition, the competition in the factor market for the best workers drive up the general education level of the people, which is a larger measurement of economic development, not jsut numerical economic growth.
Free flow of capital. Each individual and firm can freely invest. They bear the risk, but the incentive of the reward lets them to take the risk and seek innovations. There will also be a greater rate of return in an open market than a heavily regulated one.
In a market economy, gov plays the role of a rule setter and enforcer, maintaining competition and regulations that promote the general wellfare without sacrificing free choice. Such an economy best maximizes marginal social benefit while minimizing marginal social cost.
That was a VERY bare bones version of things. I pretty muched condensed my entire exam essay into that. So not very specific. lol
By the way, I'm not advocating market economy. That's just my answer to my exam question: how does a market economy promote economic development?
EternalParadox
Previously the Forum, Vector Art, and Policy Moderator
Quote by SharinganKnightin theory Communism is the fairest and best economic system..everyone is equal, now, me having lived in a communist country, know that that system just doesn't work..whoever thought of it totally overlooked human nature, as far as the world is concerned the best economic system so far is capitalism.
True... communism is a theoretically good idea, but impossible in a world populated by human beings. You simply cannot expect people to live equally. My parents and grand-parents lived through communism and I must say that some of the stories I heard are not those to dream of.
Capitalism is, up till now, the best-working structure. Of course, the margin between the rich and the poor becomes bigger, but, believe me, though communism means that everyone is on the same foot, there still are poor and rich. Guess who are the rich? The ones in charge of the whole system of course, the ones supposed to apply the theory!
But that's my own opinion. I don't want to impose it upon anyone... *smile*
Hope I helped a bit, Joycev...
Quote by Scarlet
Capitalism is, up till now, the best-working structure. Of course, the
margin between the rich and the poor becomes bigger, but, believe me,
though communism means that everyone is on the same foot, there still
are poor and rich. Guess who are the rich? The ones in charge of the
whole system of course, the ones supposed to apply the theory!
But that's my own opinion. I don't want to impose it upon anyone...
lol, this reminds me of something. Every year China (a communist country) picks the worker of the year, and this year's..or last's..I don't recall, a multimillionaire who had donated and economically helped the goverment economically a great deal was chosen...heh, communism alright
Capitalism believed that self-interest was the chief motivating force in carrying out economy, therefore the features
are private ownership of property, consumer sovereignity,freedom of enterprise,competition btwn producers,price
mechanism...
This econ system is good bcos
1.Automatic and self-adjusting price mechanism : there is no need to incur expenditure in running a large bereaucratic
system, no problem of shortage/surpluses (theoritically) as producers are profit-motivated and will adjust production
levels accordingly
2.Consumer sovereignity : consumer's preferences will determine type,quantity and quality of the goods to be
produced
3.Greater incentives to work hard and attain higher efficiency: profits act as incentives for producers to b efficient
and undertake innovation, ensuring optimum use of scarce resources and speeds up technological progress
4.Competitiveness generates greater welfare: producers compete with each other to produce gds and svcs at lower prices,
improve quality, increase variety, etc
The demerits :
1.Inequality distribution of income and wealth: due to price mechanism that depends on the ability of consumer to pay
for the goods, factor owners will be richer and richer while the poor getting poorer. May cause discontent and political
instability
2.Over-emphasis on profit motive : as public goods are inprofitable, they may not be produced sufficiently
3.Over production of undesirable goods (cigarettes,drugs) and over-production of desirable ones (education n healthcare)
: no supervising
4.Wastage: due to heavy advertising
basically I just state the points down... hope this helps
I'm not sure about socialism but I learnt about Free market (capitalism) and command and mixed economies in my
economics days.
From what I was taught, mixed economies are the only ones that really exist in the world today. No economy is truly free
market or command. Both economies are idealistic and if executed exactly, in theory they would both be perfect. Purely
theoretically.
But we all know the world isn't perfect so a compromise must be made between the two extremes.
Most of the details have already been mentioned above so I won't bore you with a repeat.
In my humble opinion, communism is a great idealistic system but it's never been implemented properly like Marx
intended and probably never will because humans simply thrive on a capitalist society. The rich get richer and the poor
get poorer.
I think communism works best for developing countries but sooner or later a transition must be made into capitalism in
order to become a developed country.
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