Essay On Economic System

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1 INTRODUTION 1.1 WHAT IS AN ECONOMIC SYSTEM Swanepoel and Van Zyl (2000:77) explicitly explain an economic system as a “set of distinctive mechanisms, institutions, organisations, rules and orders that are used to address certain issues which are common to all economies”. It is then clear that the four widely used economic systems rose from the basic economic decisions or questions that were imposed by scarcity. The currently most established and commonly practised economic system among; command, traditional, market and mixed economy, is the mixed economy. More Economically Developed Countries justify that decision by saying that a balance should be maintained in the economy of a country thus all participants are represented in the mixed economic system. That doesn’t cease to make one wonder if it is the best among the four to be used so widely more especially by developing countries who most are still baptised by the traditional economic system. The level of transparency displayed by the economic systems is still to be studied paying more attention to the mixed economy as the currently commonly practised system. 2 LATERARY REVIEW 2.1 ECONOMIC SYSTEMS HISTORY 2.1.1 traditional economic system Traditional economy is defined as an economy in which society uses primitive tools to harvest and ancient methods of production of any good, leaning more on passed on generational knowledge resulting in poor economic growth (InvestorWords,2009). This economic system is the oldest or most ancient as it has the foundation based on answering economic questions with strong attachments of custom. The survival habits are often reinforced by superstition and religious beliefs thus forbidding any change in the production procedure as it is seen as ... ... middle of paper ... ...the capitalist nature and socialist nature (Harvey. 1991:19) Delays cause the control measure to be ineffective 5 CONCLUSION As Evensky (2005:110) said that self-love is the fundamental assumption that humans are homo economicus species, entirely motivated by self-interest symbolising core market economy. It is proven though that self-interest is not adequate for a country to be economically and politically established thus the public sector is summed with private sector. Therefore it has been beneficial toSouth Africa that it implemented mixed economy as the system promotes well it’s major vision as a country. The vision is to uphold the South Africa’s institutional values which enforces equality, freedom and dignity for all South Africans (Mtyala, 2014:6) and all of that couldn’t be entirely fulfilled by both the market system and the command system separately.

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