Managerial Economics
Economic systems – analyzing articles on chosen systems
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Economic systems – analyzing articles on chosen systems
There are four primary systems of the economy that exist in our society. They are the traditional economy, command economy, market economy, and the mixed economy (“Economic Systems | Intelligent Economist”, 2020). Each of these systems comes with varied features, advantages, and disadvantages. In this context, it is necessary to mention that each system differentiates from the other. For this reason, two articles will be chosen on the command economy and mixed economy to understand the systems to a better extent.
Summary of an article on command economic systems
An article evaluating the performance given by the communist command economy was chosen. In this study, the researcher assesses the estimates made by the CIA for evaluating how successful the command economy was in the USSR. In simple terms, a command economy can be described as a system of the economy where the decision about producing goods is made by the government instead of the free market. In addition, decisions related to the quantity of production and the price of selling the product are also regulated by the government. Further, the government also decides on the investments to be made and the incomes. The former Soviet Union is one of the best examples of a command economy in a communist economy that has been chosen for this study by the researcher. It has been identified to be a primary feature of society following communist principles. In the study, the researcher compares the performance of the command economic system with the capitalist structure (Maddison, 1998). In the process, various methodological issues and practical problems came up and were carefully analyzed in the context of the Soviet Union. The researcher finds immense input for his study from the CIA. Various efforts of the CIA to assess the growth rate of the Soviet Economy were taken into consideration. However, the research inputs by the CIA ceased after 1991. The reasons identified were the undue harsh criticisms and the waning of political relevance. The researcher identifies the archives of the CIA to be a crucial source of study for analyzing economic systems.
Summary of an article on the mixed economic system
The mixed economic system is another type of economy that is prevalent in various nations on the date. An article analyzing the role of government in regulating a mixed economy has been chosen to develop a better understanding of the system. In the article, it has been identified that a mixed system of economy merges some aspects of capitalism with some aspects of socialism. The researcher in the study argues about the provision of an unsubstantial basis of assessment for the things that should be done by the government through market failure analysis. In addition, he further advocates the things that could be done by the government for the well functioning of the system. Further, the modern theory of public choice has been identified to be an inadequate resource to regulate the effective actions of the government (Nelson, 1987). In support of his argument, the researcher presents the political rhetoric analysis in addition to the actual policies primarily in two sectors – research and development, and helping the poor children. In this context, it is necessary to mention that this system of economy acts as a protection for private property while allowing certain economic liberty in terms of using the capital. However, the government is also allowed to interfere in various economic activities with the aim of achieving social goals.
Conclusion
Both of the discussed economic systems have been widely applied across various nations during various time periods. Each system has characteristics that are exclusive and unique from the rest. It is thus necessary to identify the differences that exist between the various systems do develop an in-depth understanding of the varied systems of economy.
Reference
“Economic Systems | Intelligent Economist”. (2020). Retrieved 25 April 2020, from https://www.intelligenteconomist.com/economic-systems/
Maddison, A. (1998). Measuring the Performance of a Communist Command Economy: an Assessment of the CIA Estimates for the USSR. Review of Income and Wealth, 44(3), 307-323.
Nelson, R. R. (1987). Roles of government in a mixed economy. Journal of policy Analysis and Management, 6(4), 541-566.