Economic system
An economic system is the system of production, distribution and consumption of goods and services of an economy. Alternatively, it is the set of principles and techniques by which problems of economics are addressed, such as the economic problem of scarcity through allocation of finite productive resources. The economic system is composed of people and institutions, including their relationships to productive resources, such as through the convention of property. Examples of contemporary economic systems include capitalist systems, socialist systems, and mixed economies. "Economic systems" is the economics category that includes the study of respective systems.
Overview
An economic system can be defined as a "set of methods and standards brought by which a society decides and organizes the allocation of limited economic resources to satisfy unlimited human wants. At one extreme, production is carried in a private-enterprise system such that all resources are privately owned. It was described by Adam Smith as frequently promoting a social interest, although only a private interest was intended. At the other extreme, following Karl Marx and Vladimir Lenin is what is commonly called, such that all resources are publicly owned with intent of minimizing inequalities of wealth among other social objectives".
Alternatively, 'economic system' refers to the organizational arrangements and process through which a society makes its production and consumption decisions. In creating and modifying its economic system, each society chooses among alternative objectives and alternative decision modes. Many objectives may be seen as desirable, like efficiency, growth, liberty, and equality.
Part of a social system
An economic system can be considered a part of the social system and hierarchically equal to the law system, political system, cultural, etc. There is often a strong correlation between certain ideologies, political systems and certain economic systems (for example, consider the meanings of the term "communism"). Many economic systems overlap each other in various areas (for example, the term "mixed economy" can be argued to include elements from various systems). There are also various mutually exclusive hierarchical categorizations.
Basic types Economic systems
The basic and general economic systems are:
Market economy (the basis for several "hands off" systems, such as capitalism).
Mixed economy (a compromise economic system that incorporates some aspects of the market approach as well as some aspects of the planned approach).
Planned economy (the basis for several "hands on" systems, such as socialism, or a command economy).
Traditional economy (a generic term for the oldest and traditional economic systems)
Participatory economics (a recent proposal for a new economic system)
Inclusive Democracy (a project for a new political and economic system)
There are several basic and unfinished questions that must be answered in order to resolve the problems of economics satisfactorily. The scarcity problem, for example, requires answers to basic questions, such as: what to produce, how to produce it, and who gets what is produced. An economic system is a way of answering these basic questions, and different economic systems answer them differently.
Division of economic systems
Typically, "hands-on" economic systems involve a greater role for society and/or the government to pick goods and services, with the stated aim of ensuring social justice and a more equitable distribution of wealth (see welfare state). Meanwhile, "hands-off" economic systems give more power to private individuals (and perhaps corporations) to make those decisions, rather than leaving them up to society as a whole, and often limit government involvement in the economy. Often the primary concern of "hands-on" economic systems are usually egalitarianism, while the primary concern of "hands-off" economic systems is usually private property. Libertarians target individual economic freedom as a primary goal of their "hands-off" policies, though in general, most types of economic systems claim that their system of economic organization is either most efficient or socially effective. The following list divides the main economic systems into "hands-on" and "hands-off," it attempts to structure the systems in a given section by alphabetical order and in a vertical hierarchy where possible.
"Hands on" systems
"Hands-on" Private-oriented Systems
A system in which large privately-owned entities control or direct the economy in their favor, or in which private shareholders invest in and own enterprises that are operated by the state or by employee cooperatives. Fascist Economics
State Corporatism
Capitalism
State Capitalism
"Hands-on" State-oriented Systems
Economic systems in which the state directs or controls economic activity through economic planning. Communism
Socialism
State socialism
Market socialism
Planned economy Socialism
Feudalism
Mercantilism
National Economy Model Haydarizm
"Hands-on" Communal-oriented Systems
Economic systems in which a collective, such as a commune or cooperative directs or plans large-scale economic activity.
Communism
Anarcho-communism (a form of libertarian socialism)
Socialism
Libertarian socialism
Democratic Socialism (a form of socialism in which enterprises are managed democratically by workers but are owned by the state)
Participatory Economics
"Hands off" systems
"Hands-off" Private-oriented Systems
Economic systems in which the economy is controlled privately in a usually decentralized fashion and operated based on market principles. Capitalism
Anarcho-capitalism
Laissez-faire capitalism
Corporate capitalism
Gift economy
Mutualism
Syndicalism
"Hands-off" State-oriented Systems
Economic systems in which the state runs, owns and/or manages its own resources and enterprises in a free-market economy with minimal regulation and without government planning. Socialism
Socialist market economy
Various socialist proposals in which the means of production are owned and operated by the state in a free-market system with no government regulation
Mixed Economies That are more market-oriented but contain a number of state-owned enterprises that operate in the market and are subject to market forces.
"Hands-off" Communal-oriented Systems
Economic systems that are characterized by decentralized cooperative or collective ownership that operate in market economies or decentralized, collectively-planned economies. Anarchist economics
Syndicalism
Participatory planning
Inclusive Democracy (a project for a new political and economic system based on democratic principles and libertarian socialism)
Mutualism (a form of libertarian socialism)
Non-property system
"Compromise" Mixed systems
Economic systems that contain substantial state, private and sometimes cooperative ownership and operated in mixed economies - i.e, ones that contain substantial amounts of both market activity and economic planning. Distributism
Georgism
Mixed economy
American School
Dirigisme
Nordic model
Japanese System
Mercantilism
Social market economy also known as Soziale Marktwirtschaft
PROUT also known as Progressive Utilization Theory
Indicative Planning also known as a planned market economy
List of economic systems
An etymologist's approach to economic systems, this list attempts to sort all possible economic systems in alphabetical order, without any division or hierarchization.
American School
Anarchism
Anarcho-capitalism
Anarcho-communism
Autarky
Barter economy
Buddhist Economy
Capitalism
Colonialism
Communism
Coordinatorism
Corporatism
Corporate capitalism
Digital Economy
Distributism
Dirigisme
Fascist socialization
Feudalism
Green economy
Hydraulic despotism
Inclusive Democracy
Information economy
Internet Economy
Islamic economics
Japanese System
Knowledge economy
Libertarian communism
Libertarian socialism
Market economy
Market socialism
Marxian economics
Mercantilism
Mixed economy
Mutualism
National Socialism
Natural economy
Neo-colonialism
Network Economy
Nordic model
Non-property system
Parecon
Participatory economy
Planned economy
Progressive Utilization Theory
Resource-based economy
Self-management
Social market economy
Socialism
Socialist market economy
Syndicalism
Subsistence economy
Traditional economy
Virtual economy
Translation of "Economic system"
Arabic: نظام اقتصادي, Catalan: Sistema econòmic, German: Wirtschaftssystem, Estonian: Majandus, Spanish: Sistema económico, Persian: نظام اقتصادی, French: Système économique, Indonesian: Sistem perekonomian, Hebrew: משטר כלכלי, Georgian: ეკონომიკური სისტემა, Hungarian: Gazdasági rendszer, Polish: System gospodarczy, Russian: Экономическая система, Slovak: Ekonomický systém, Finnish: Talousjärjestelmä, Swedish: Ekonomiskt system, Tagalog: Sistemang pang-ekonomiya, Tamil: பொருளாதார அமைப்புக்கள், Chinese: 经济体系.
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