The Economic Systems Essay -- Economics Economy Essays

The Economic Systems Within the overall umbrella of the word "economy", one speaks today of the market economy, the formal economy, the informal economy, the underground economy, the productive economy and perhaps even the reproductive economy, the post-industrial or post-modern economy and the global economy. Thus while the concept of an economy is not fixed but arbitrary, and may have strayed rather far from the management of household resources, it is nonetheless spoken of in official circles as if there were genuine agreement (sometimes almost as if it were tangible, as "we must get the economy back on track"). The official economic paradigm operative in Canada is that of the market economy -- or the formal economy. This is what is being measured, analysed and reported on. An economy is said to work within a framework reflecting the values of the society in which it is embedded. Traditionally, three models of an economy have been used: the traditional or feudal, the command economy (where the state determines resource decisions) and the market economy which is the model in use in USA and in most industrialized Western countries. Indeed, even within the market economy, there are different models; for example, the Scandinavian model of social democracy, the Asian corporatist mode, and the capitalist model of North America. Each model has been seen and judged both from inside and outside its parameters. Individual freedom is one of the hallmarks of the market economy -- each person is free to choose how they wish to put their income to use. Adam Smith, hailed as the founder of classical economics, suggested that the sum of individual's self-interest would produce results that corresponded to the overall good of society. The Economic systems: There are three types of economies: traditional (also known as subsistence), command (also known as planned) and market (commercial). Traditional Economy In a traditional economy, goods and services are produced by a family for their personal consumption. There is little surplus and little exchange of goods. There is only a limited need for markets (places to buy and sell goods and services). This is the type of economy found in less developed nations of the world, usually in rural areas. Most less developed nations today are a mix of traditional and either market or command economies. Command Econ... ...ts worship of competition it is amoral. On the other hand, the Soviet experience clearly demonstrated that state socialism and a centralized economy can be mishandled. Perhaps it is human nature, not political organization that lies at the root of inequality in both North America and Eastern Europe. Bibliography  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Aghion, Philippe and Olivier Blanchard and Robin Burgess, The Behavior of State Firms in Eastern Europe, Pre-Privatization  ¨European Economic Review 38: 1994, pp1327-1349.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Belozertsev, Alexander and Jerry W Markham, Commodity Exchanges and the Privatization of the Agricultural Sector in the Commonwealth of Independent States Needed Steps in Creating a Market Economy  ¨Law and Contemporary Problems 55: (4), Aut 1992, pp119-155  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Cunningham, Frank Understanding Marxism Progress Books Toronto: 1977.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Dyker, David Restructuring the Soviet Economy Routledge New York: 1992  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Nove, Alec An Economic History of the USSR, 1917-1991 3rd Ed Penguin Books, London: 1992  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Lane, David Soviet Society under Perestroike Routledge London: 1992  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Yarolavsky, E Landmarks in the Life of Stalin Lawrence & Wishart Ltd London: 1942