Economic Systems Essay

908 Words2 Pages
bulb-icon

Recommended: Globalization and its impact

Toni Oniel 5/2/14 Macro-Economics Mr. McCoy Economic Systems In the world today, there are several different economic systems. Usually, the majority of countries will implement either a Capitalistic, Socialistic, Communistic, Traditional, or Mixed economy. Over the course of history, economists have studied several nations and the way they function. Certain systems are newer than others, and some are more successful than others. Capitalism, for example, appears to be one of the most successful economic systems. Capitalism is heavily based on who decides the answers to three questions: What is produced? How is it produced? Who receives the product? For Capitalism, the answers are the people. The people decide what is produced, how it is produced as well as who receives the product. It is a free-market economy that focuses on private ownership rights, free trade, and a non-government regulated economy. This system dates back as early as the Middle Ages when Europeans practiced merchant capitalism. Now, Capitalism is the dominant economic system in the world’s established nations. The United States, Germany, India, and Japan are all examples of Capitalistic countries. The U.S., Japan, and Germany are all in the top four biggest economies with the world’s largest GDPs. This demonstrates Capitalism’s great success. We owe a great deal of its success to Adam Smith. Smith was one of the biggest founders of Capitalism. Smith’s ideas and theories can be found in his book, An Inquiry into the Nature and Causes of the Wealth of Nations. In his book, Smith emphasizes that a country’s wealth is based on its productive ability. He also says that the government should have a very little impact on the economy. He believed that economies always h... ... middle of paper ... ...imitive will most definitely develop slower than those that implement current technology. Other examples of traditional economies would be clans, tribes, or nomadic groups. This is perhaps the oldest economic system since this could be applied before real civilizations came into existence. The world has seen a number of economic systems, and some will last longer than others. Either way, there is no perfect economic system because economics are constantly changing and morphing to meet their nations’ needs. Economists will continue to study these systems, as well as others, for years to come in hopes of discovering a new system that works even just a little bit better than what they currently use. As for now, there are no true Capitalist countries, true Socialistic, true Communistic or even true traditional economies. All nations seem to be approaching a compromise.

Show More
Related

  • Ethical Issues In Precapitalist America

    165 Words  | 1 Pages

    Adam Smith justified the ethics of capitalism by stating that it did not benefit the common man. He felt that if the government interfered, there would be proper distribution of wealth and it would result to more efficient business.

    Read More

  • Capitalism Dbq Analysis

    872 Words  | 2 Pages

    Economic systems are affected by the two opposing systems of capitalism and communism. They each can meet the needs of people; however, both affect the lives of people in good and bad ways, affecting industrialized nations and nations in the process of being industrialized. Capitalism is all about wealth and the wealth of people. Capitalism met the needs of the people because the right to property was created. You can own your own house, factories and land.

    Read More

  • Keynsian Economics Essay

    1047 Words  | 3 Pages

    ...omy. For example, China is considered a communist government. However for their economy to exist in the world market, some private ownership and factories have been allowed to exist with government oversight. And the United States while considered a capitalistic society has such institutions as public schools, energy, medicare, and services which all share in and benefit from equally. All economic systems also have their pros and cons. For example, Capitalism has been accused of ignoring the individual in pursuit of profit. While socialism does not reward the entrepreneur with wealth, but often punishes the rich with crushing taxes. In the end, the best way to understand how economies work in the world today is to research each ones basic history and definition. In this way a person can make an informed decision on what economic system they believe works best

    Read More

  • Feudalism Essay

    1381 Words  | 3 Pages

    The emergence of capitalism in Western Europe was considered as a majority change in human history. As prior to the emergence of capitalism conditions are mainly agriculture and there was no sustained monotonic income per capita. Also prior to the emergence of capitalism there was a feudal system of organising the economy emerged in the 15th century of medieval Europe.

    Read More

  • Marxism Vs Mercantilism

    198 Words  | 1 Pages

    Karl Marx believed that the only way to understand present day’s economic system, you need to study history and social class. Capitalism emerged from pre-capitalist societies like slave economies, feudalism and mercantilism. These societies are all connected to each other through development, decay and replacement. These societies are never static and always evolving. Rome’s slave economy transformed into feudalism and then mercantilism developed from feudalism. Over time, mercantilism leads to what we call modern day capitalism.

    Read More

  • Political Ideology Analysis

    1227 Words  | 3 Pages

    Capitalism is predominantly the political ideology used throughout the world (Zand, 2012). Adam Smith first wrote about capitalism and its affects during 1776 (Pirie, 2010). His book entitled ‘The Wealth of Nations’ is the first recorded appearance of the free market scheme (Pirie, 2010). The Western World relies heavily on the free market scheme where economic disparity and separation of social classes thrives. This form of capitalism promotes greed and inequality. Capitalism through democracy enshrines public freedoms such as speech, legal equality, association and action as a way to further empower the...

    Read More

  • Conley's Synopsis Of A Brief History Of Capitalism

    288 Words  | 1 Pages

    Conley’s synopsis of “A Brief History of Capitalism,” outlines the natural progression of economic systems created in response to the needs of society. Social conditions present after the Protestant Reformation combined with advances in technology to have a direct influence on how labor was organized, and as a result, determined the relationship between societal groups. Innovations in agriculture and industry led to the formation of capitalism as a system best suited to the economic reality of the day. According to Adam Smith, individuals are ‘motivated by self-interest’ and flourish in a competitive environment. Wealth creation comes about through expanding exchanges between entities as well as an increased division of labor making

    Read More

  • Capitalism in the US

    705 Words  | 2 Pages

    Capitalism is what made our country strong, and it needs to be protected from its enemies. The study of capitalism reveals that this type of system inspires creative thinking and rewards successful innovation financially. This drives the economy forward in an excellent way. In his article, Arthur Brooks makes a strong argument which validates the need for free enterprise to remain unrestricted, and free to execute business unfettered (Brooks 545). He points to the intentions of our government, in its infancy, by quoting Thomas Jefferson, in regard to our economic system. Jefferson said at his first inaugural address "A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of bread it has earned" (qtd. in Brooks 545). In contrast, socialism is a system that advocates the control of production and distribution, of capital, and land. Socialism is more closely related to a command system, such as communism, than it is to capitalism. Communism distributes wealth equally to all. Robin hood is a fascinating tale that can be a demonstration of communism. Take from the rich and give it to the poor. Most people do not consider themselves to be wealthy. That is because it is human nature to alway...

    Read More

  • Market Economy Research Paper

    860 Words  | 2 Pages

    The market economy is believed to be the most successful economic system created because of its success in most of the powerful countries in the world. According to economists, private firms and individuals own the factors of production in this economic system. In accordance to this it is perceived that firms and individuals are the ones that make the decisions on the 3 main economic questions: What to produce, How to produce and for whom to produce. Which is true based on how much influence firms and individuals have on an economy. Firms work hand in hand with individuals/households to keep a country’s economy running efficiently and equitably. Most businesses and business owners who are in this economic system are profit seekers, when looking at America you see that the most powerful participants in the economy have billions. Coming back to the 3 main economic question, economists have had us believe that the:

    Read More

  • Adam Smith’s The Wealth of Nations - The Natural Order is Driven by Man’s Self-interest

    854 Words  | 2 Pages

    Adam Smith’s The Wealth of Nations argues for a system of political economy that separates economy – the creation and distribution of wealth – from governmental interference. In Smith’s view, the economy of a nation grows as a direct consequence of private business ventures in the interest of each individual owner. Regulation by the government hurts the economy, and the progress of society is derived from the flow of the market. Things should be left in their natural states, thus maintaining a “natural order” of society. The basis of Smith’s thesis is that this natural order is driven by Man’s self-interest.

    Read More

  • Mixed Economy: Pros And Cons Of A Mixed Economy

    1260 Words  | 3 Pages

    A definition of economy can be, the activities by which a geographic area will maintain itself through the production, and consumption of its goods and services. Goods are those products that can be seen or touched, such as a house or a taco. Services are intangible processes that someone or something can do to create products, such as a carpenter building a house or a chef cooking food. Three of the economic systems are capitalism, a socialism, and mixed economies. There is no “pure” capitalism or “pure” socialism economy; they overlap with the result being a mixed economy. When examining these three economies it becomes apparent there are pros and cons to each of them.

    Read More

  • Karl Marx's Communism

    1566 Words  | 4 Pages

    ... Communism. I think the only way for a nation or country to work is by mixing different economies at different levels, but more so in a balanced sense and the outcome is a nation that works even though it’s not an ‘absolute’ economical function.

    Read More

  • Classical Economists

    728 Words  | 2 Pages

    The central thesis of The Wealth of Nations is that capital is best employed for the production and distribution of wealth under conditions of governmental noninterference, or laissez-faire, and free trade. In Smith’s view, the production and exchange of goods can be stimulated, and a consequent rise in the general standard of living attained, only through the efficient operations of private industrial and commercial entrepreneurs acting with a minimum of regulation and control by the governments. To explain this concept of government maintaining laissez-faire attitude toward the commercial endeavors, Smith proclaimed the principle of the “invisible hand”: Every individual in pursuing his or her own good is led, as if by an invisible hand, to achieve the best good for all. Therefore any interference with free competition by government is almost certain to be injurious.

    Read More

  • Adam Smith’s Influence on Contemporary Management

    736 Words  | 2 Pages

    Adam Smith's Wealth of Nations was published in 1776, coincidently the same year as the Declaration of Independence, is considered by many economic scholars to be the early framework of capitalism. Smith’s “invisible hand” metaphor explains how the motivation of the individual, a strong workforce and a decentralized market are the driving forces for economic prosperity. According to Dr. Crowley:

    Read More

  • The Pros And Cons Of Capitalism

    905 Words  | 2 Pages

    Capitalism is the best economic system for many reasons. The first one is because the government believes in “ Laissez Faire”, which means “Hands off”. The government has no role

    Read More

More about Economic Systems Essay

Open Document