There are many different Economic systems, such as Traditional, Capitalism, Socialism, Command, and Mixed economics. The most reasonable Economic system i believe is Capitalism also known as Market economy, simply because it’s a system where production and distribution are privately owned for a profit. The government doesn't make decisions about demand, supply, price, distribution, and investments. Profits are given to the owners that invest in businesses and, wages are paid to the workers employed by businesses. Capitalism is also a political system known as a free market for goods and services also private control of production and use. This economic system is much used today, for example business owners setting something such as an item at a low price and supply it at a high price at a later time. A good example of capitalism is speculation because it shows supply and demand in a free market system, where the invisible hand moves the market price up and down. To make it simpler we can compare name brand shoes such as Nikes and Sketchers, other examples are coke and Pepsi, or makeup like M.A.C sold at the mall or Loreal sold at the drug store which, are all the same goods but different prices.
The worst system I believe is Command economics because, the government has total ownership and decision making of the production and distribution of goods and services. The government controls the industry, regulates production, distribution, and prices. An example of Command economies is the Soviet Union, Socialist and, communist economies. This system existed in Burma, Cuba, Libya, North Korea, Saudi Arabia, and Iran. The state controls macro-economic policy and workers activity, but allows some freedom for economic decisions about employment and consumption. In other words, there is state control of the factors of production and centralized state planning like what to produce, how to produce it, and who to produce it for, but with some freedom for peoples decisions, like which job to take.
Monday, August 30, 2010
Wednesday, August 18, 2010
Adam Smith Vs Karl Marx
Adam Smith and Karl Marx are both economic philosophers their economic theories were similar but differ in certain ways as well. Both have similarities in their ideology, "Both individuals sought to attain a stable economy and government and to reduce class tensions by ensuring a larger middle class. While Smith and Marx supported completely different approaches to achieve these ends, neither of their proposed systems proved to be completely infallible."
Adam Smith was a Scottish moral philosopher who became famous for his book, called, “The Wealth of Nations” it had an influence on economics and of individual freedom. Adam Smith believed that people are naturally selfish. They will do whatever they can to achieve more if they have personal positive influence. They dont care about other people but will benefit other people by their own contribution to the economy. Adam Smith came up with “The invisible hand”, he used this quote to show how someones own intrest can guide the most useful resources in a nation's economy. "Smith argued that state and personal efforts, to promote social good are ineffectual compared to unbridled market forces." However, Karl Marx was a German philosopher, political economist, historian, political theorist, sociologist, communist, and revolutionary, whose ideas played a role in the development of modern communism and socialism. Karl Marx differs because he is an idealist,he believed that people work for the greater good, have no incentives and prefer to have every part of their lives controlled by the state with guaranteed free housing, healthcare, and education. Marx argued that capitalism, would eventually produce internal tensions which would lead to its destruction. He also argued for a systemic understanding of socio economic change, and that the structural contradictions with capitalism is going its end, giving way to socialism. He stated that capitalism will end through the organized actions of an international working class "Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence." Marx believed that a severe crises would ruin this cycle of growth and collapse. He also believed that in the long term this process would necessarily help the capitalist class. He believed that if the lower social class were to seize the means of production, they would encourage social relations that would benefit everyone equally. Marx ideas and the ideology of Marxism had a major influence on workers movements after his death. Politically, as you see they differ in many ways.
Works Cited- Smith Vs Marx http://www.bookrags.com/essay-2006/3/8/155715/3865
Adam Smith Philosopher- http://www.lucidcafe.com/library/96jun/smith.html
Karl Marx- http://www.en.wikipedia.org/wiki/Karl_Marx
Adam Smith was a Scottish moral philosopher who became famous for his book, called, “The Wealth of Nations” it had an influence on economics and of individual freedom. Adam Smith believed that people are naturally selfish. They will do whatever they can to achieve more if they have personal positive influence. They dont care about other people but will benefit other people by their own contribution to the economy. Adam Smith came up with “The invisible hand”, he used this quote to show how someones own intrest can guide the most useful resources in a nation's economy. "Smith argued that state and personal efforts, to promote social good are ineffectual compared to unbridled market forces." However, Karl Marx was a German philosopher, political economist, historian, political theorist, sociologist, communist, and revolutionary, whose ideas played a role in the development of modern communism and socialism. Karl Marx differs because he is an idealist,he believed that people work for the greater good, have no incentives and prefer to have every part of their lives controlled by the state with guaranteed free housing, healthcare, and education. Marx argued that capitalism, would eventually produce internal tensions which would lead to its destruction. He also argued for a systemic understanding of socio economic change, and that the structural contradictions with capitalism is going its end, giving way to socialism. He stated that capitalism will end through the organized actions of an international working class "Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence." Marx believed that a severe crises would ruin this cycle of growth and collapse. He also believed that in the long term this process would necessarily help the capitalist class. He believed that if the lower social class were to seize the means of production, they would encourage social relations that would benefit everyone equally. Marx ideas and the ideology of Marxism had a major influence on workers movements after his death. Politically, as you see they differ in many ways.
Works Cited- Smith Vs Marx http://www.bookrags.com/essay-2006/3/8/155715/3865
Adam Smith Philosopher- http://www.lucidcafe.com/library/96jun/smith.html
Karl Marx- http://www.en.wikipedia.org/wiki/Karl_Marx
Definitions
Scarcity-The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
Opportunity Cost-The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
Capital Goods-Goods that are themselves utilized in the production of other goods rather than being sold to consumers
Socialism-a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
Capitalism-An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.
Adam Smith-Was a Scottish moral philosopher and a pioneer of political economics. One of the key figures of the Scottish Enlightenment
Macroeconomic-the branch of economics dealing with the broad and general aspects of an economy, as the relationship between the income and investments of a country as a whole.
Opportunity Cost-The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
Capital Goods-Goods that are themselves utilized in the production of other goods rather than being sold to consumers
Socialism-a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
Capitalism-An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.
Adam Smith-Was a Scottish moral philosopher and a pioneer of political economics. One of the key figures of the Scottish Enlightenment
Macroeconomic-the branch of economics dealing with the broad and general aspects of an economy, as the relationship between the income and investments of a country as a whole.
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