Capitalismsocialismmixedeconomy 110903012113 Phpapp02
Capitalismsocialismmixedeconomy 110903012113 Phpapp02
Capitalismsocialismmixedeconomy 110903012113 Phpapp02
Types:
Capitalism (Market Economy)
Socialism (Planned economy)
Mixed (Capitalism + Socialism)
Capitalism
(Adam Smith)
Centralized to Decentralized
system
Mercantile
System
Authoritarianism to
representative democracy
Free flow of resources
Production Factors
in Government
hands
Export emphasis
Benefits of Capitalism
In years 10001820 world
economy grew six-fold,in years
18201998 world economy grew
50-fold
Provides Choice to customers
Provides valuable goods and
services
Capitalism actively rewards
positive traits like hard work
Similarly, it punishes negative
traits such as laziness and theft
Narrows the gap between common
person and wealthy
Provides opportunity to realize
dreams and desires
Capitalist societies usually do not
have largeblack markets
Build on democracy
Social Good
Major limitations/
Criticism:
Socialism
Features of Socialism;
Benefits of Socialism
i.
ii.
iii.
iv.
v.
vi.
Better salaries
Stable Environment
Eliminates poverty
Better Products
Fulfills survival need
Opportunity for citizens to explore noneconomically-productive pursuits
Criticism of Socialism
COMPARISON
COMPARISON..
BASIS OF
DIFFERENCE
CAPITALIST ECONOMY
SOCIALIST ECONOMY
Resources
Ownership
Privately owned
State owned
Foundation belief
Earning of wealth
Market Scenario
Protection to PSUs,
Private enterprises are
permitted in few
businesses only
Govt. interference
Employees
motivation
Rarely motivated as
performance is not
rewarded
Merit
Perception of better
economic growth because of
Equal distribution of
income results in
Mixed Economy
Any economy in which private corporate
enterprises and public sector enterprises exist
side-by-side, and decisions taken through market
mechanism are supplemented by some form of
partial planning, is to be described as a mixed
economy.
This system overcomes the disadvantages of
both the market and planned economic systems.
Features
Resources are owned both by the
government as well as private individuals. i.e.
co-existence of both public sector and private
sector.
Market forces prevail but are closely
monitored by the government.
Monopoliesmay be existing butunder
close supervisionof the government.
Advantages
Producers and consumer have sovereigntyto
choose what to produce and what to consume but
production and consumption of harmful goods and
services may be stopped by the government.
As compared to Market economy, a mixed
economymay have less income inequalitydue to
the role played by the government.
A mixed economy represents an achievable balance
between individual initiative and social goals.