Comparing Economic Systems

docx

School

Grand Canyon University *

*We aren’t endorsed by this school

Course

100

Subject

Economics

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by MinisterStrawJellyfish381

Comparing Economic Systems According to the textbook the two main types of economic systems today are free-market and command economies (Nickels, McHugh, & McHugh, 2020) . These two broader terms open up a discussion for more specific types of economies like socialist, communist, and capitalist. In a free market-economy the market makes most of the decisions such as what goods and services get produced and who gets them, as well as other aspects of the market. The converse is a command economy. This economy is a bit more restrictive in the way that the government owns more of the means of production. The government decides what goods and services are produced and makes all the other decisions that a market would decide in a free market economy (Nickels, McHugh, & McHugh, 2020) . Socialism and communism are command economies whereas capitalism and U.S. capitalism are free markets. U.S. capitalism is not entirely a free market as the government does regulate a few things but overall, it leans to the free-market side. The economic systems all have different characteristic features. In socialism it is based off the idea that most basic business practices should be owned by the government. Things like steel mills, utilities and other major businesses should be government operated for the means of equally distributing wealth. In socialism the goal is to create more even income equality while still allowing people to own some small businesses and property (Nickels, McHugh, & McHugh, 2020). Communism is sometimes seen as the extreme version of socialism. Communism is based off the idea that all economic decisions should be made by the government. Places like North Korea operate under this economic system. Communism can be so strict that it will even regulate things like religion or the job a citizen can work ("What are the differences,” 2014). In capitalism almost all of the means of production are owned by individuals. Their goal is to make profit and people get to decide what they produce. In the U.S. the economic system is

capitalism, but the government does intervene some by setting a minimum wage and adding a few other regulations. In capitalism prices are determined by the people and in U.S. capitalism prices are usually also determined by the people but there are instances where the government steps in and put a price cap on goods and services. For communism and socialism, the government usually sets prices for things. The government decides how to properly provide for the people (“What are the differences,” 2014). Free enterprise and market economies go hand in hand. Free enterprise is when businesses can operate with minimal government interference and market economies are when people and business can decide what to buy, make, and sell. Both of these terms are closely related to capitalistic ideals. In communism business cannot operate without government interference making free enterprise impossible as well as a market economy considering no one but the government is making economic decisions ("What are the differences,” 2014). In socialism a small market economy can exist to an extent considering the citizens are allow small businesses that they run but still under heavy government regulation. Ethical behavior is critical in systems like communism and socialism. Ethical behavior in capitalism is not as paramount because each person is more responsible for themselves, but in a communist economy the government officials must act ethically on the part of businesspeople because they are the ones looking out of the economic welfare of the people. They must act ethically putting others in the right esteem to properly give them the means to survive. This also applies to socialism but to a lesser extent. For a capitalistic market operating ethically is still important, as making clean business deals between individuals is the best way to keep a good business reputation, but no one is making as many decisions for another as it is done in the other economic systems.

These three main economic systems have been tried again and again and they all have their pros and cons. The best economic system in my opinion thus far is capitalism. In socialism no one will excel, no one can rise above their means because the economy is too controlled, and it is worse in communism. Rather than making everyone equally better off by eradicating wage gaps it makes everyone equally poor. In capitalism people work for their fortune and are rewarded by how smart, hard-working, and inventive they are (Nickels, McHugh, & McHugh, 2020). Socialism and communism are the killers of creativity and innovation. They turn everyone into factory working robots praying to get enough in their next paycheck or to buy their next meal after the high taxes socialism imposes. Capitalism in history so far has created some of the strongest economies as we see in America.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

References Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2020). Understanding business: The core . What are the differences between communism and socialism? (2014, October 2). Retrieved from https://www.investopedia.com/ask/answers/100214/what-difference-between- communism-and-socialism.asp

Related Documents

Journal reflection 4.docx

Assignment 5_ERA.docx

writing2.pdf

applied stats project 2 upload.pdf

Discussion 1 .pdf

problemset2_2024 (2).pdf

Final2021_A_solutions.pdf

IMG_6882.jpeg

CircularFlowModel_Worksheet (2).docx

ECO 108.docx

Week 6.pptx

Week 1 Assignment - C. Hanley .docx

Recommended textbooks for you

MACROECONOMICS FOR TODAY

Economics

ISBN:9781337613057

Author:Tucker

Publisher:CENGAGE L

Micro Economics For Today

Economics

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Cengage,

Economics For Today

Economics

ISBN:9781337613040

Author:Tucker

Publisher:Cengage Learning

Survey Of Economics

Economics

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Cengage,

Microeconomics: Private and Public Choice (MindTa...

Economics

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

Macroeconomics: Private and Public Choice (MindTa...

Economics

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning