Comparative Economic Systems Project
Capitalism: Capitalism is the economic system that allows privately or corporately owned businesses the freedom of production, distribution and exchange. The businesses are allowed to freely operate or manage their property for profit. There are multiple variations of capitalism including laissez-faire, welfare capitalism, and state capitalism. Laissez-faire is the belief that the government should be completely hands-off in regards to regulating business and imposing tariffs; the only regulation should be on protecting property rights. Other strains of capitalism involve collective bargaining or regulation being taken up by the state, etc.
Communism: Communism is the belief that a country’s system should be completely classless, stateless and moneyless and involves common ownership of the means of production. Based off of the main version of communism, or Marxist view, all goods and products are available to all as needed due to the communal distribution of resources. Due to the elimination of private property, all economic goods are distributed equitably.
Socialism: Producing goods directly for use rather than producing for private profit characterizes socialism. It also entails the elimination of monetary valuation and calculation in the process of production. A socialist economic system involves a system of production and distribution that is organized to directly satisfy economic demands and human needs. This will benefit the economy supposedly by driving the accumulation of capital through providing goods and services directly rather than for an individual’s private profit. Distribution of goods would be based off of the amount of work an individual does, where the laborer receives full compensation for all f his work, removing the evils of exploitation and unearned incomes. Advantages
Disadvantages
Capitalism
- government has little control over businesses, allowing for competition
- allows individuals to choose what kind of work they want to do and where they want to do it
- it also allows people the freedom of what they want to do with their money; put in retirement or bank accounts, or invest in the stock market
- people get their own property and have “equal opportunity” to rise to other classes in the social system
- there are sometimes large gaps and barriers between people in terms of wealth and income
- government control is so limited that it allows small groups of businesses to rule the whole industry and make the rules
- theres always at least a small amount of unemployed and there are many who must work the menial labor that serves the industry
- inequality; for example, richest 1% owns a third of the economy
Socialism
- universal health care
- if there are many resources, it provides all members with the materials and resources they need to survive
- members that can’t participate economically due to disabilities, age, etc. can still contribute to the system by imparting wisdom and continuity of experience
- better morally because it reinforces the fact that all individuals are created equally
- reduces amount of poverty due to eatable wealth distribution
- feeling of unity because all work for a common cause and profits are all shared equally
- high taxes
- almost impossible for it to be implemented in today’s world; it is an imaginative theory
- “socialist” countries don’t have the theory properly implemented because corrupt bureaucrats utilize their power to redistribute and regulate the wealth, limiting people’s political freedom
- if there is not enough wealth, then overall growth of the economy will suffer and distribution of goods will be hampered
- no real increase on standards of living
- allows poor to have higher levels of income; deters them from working hard
Communism
- theoretically, there is equality and fairness in the