Economic system and types of economic systems: characteristics and table

At all the historical stages of the development of mankind , the same question arises before the society: what, for whom and in what quantities should it be produced taking into account the limited resources. The economic system and types of economic systems are just designed to solve this problem. And each of these systems does it in its own way, each of them has its own advantages and disadvantages.

The concept of the economic system

The economic system is a system of all economic processes and production relations that has developed in a specific society. This term is understood as an algorithm, a way of organizing the production life of a society, which presupposes the existence of stable links between producers on the one hand and consumers on the other.

The content of the concepts "economic system" and "types of economic systems" strongly depends on a particular scientific school. For example, in some schools they are considered and described with the help of macroeconomic concepts, in others - through the behavior of people, thirdly, attention is paid to their systemic nature, and so on.

The main processes in any economic system are the following processes:

• production;
• distribution;
• exchange;
• Consumption (benefits).

Production in any of the existing economic systems is carried out on the basis of appropriate resources. However, some elements still differ in different systems. We are talking about the nature of socio-economic relations, mechanisms of management, motivation of producers, and so on.

Economic system and types of economic systems

An important point in the analysis of any phenomenon or concept is its typology.

The characteristics of types of economic systems, in general, is reduced to an analysis of the five basic parameters for comparison. It:

• Technical and economic parameters;
• Ratio of the share of state planning and market regulation of the system;
• Relations in the sphere of property;
• Social parameters (real income, amount of free time, labor protection, etc.);
• Mechanisms of the functioning of the system.

Proceeding from this, modern economists distinguish four main types of economic systems:

1. Traditional
2. Command-plan
3. Market (capitalism)
4. Mixed

Let's consider in more detail, than differ all these types from each other.

Traditional economic system

In the era of primitive society, the world's first economic system, based on subsistence farming, was born. Today, the traditional type of economic system is almost never found (except for certain regions of Latin America, Asia and Africa, as well as some third-world countries).

This system of economy is characterized by gathering, hunting and low-productive farming, based on extensive methods, manual labor and primitive technologies. Trade is poorly developed or not developed at all.

Perhaps the only advantage of such an economic system can be called weak (almost zero) pollution of the environment and minimal anthropogenic pressures on nature.

Command-planned economic system

Planned (or centralized) economy is a historical type of management. Nowadays, it does not occur anywhere in its pure form. Previously, it was typical for the Soviet Union, as well as some countries in Europe and Asia.

Today, more often talk about the shortcomings of this economic system, among which is worth mentioning:

• Lack of freedom for producers ("what and in what quantities" commands were sent from above);
• Dissatisfaction with a large number of economic needs of consumers;
• Chronic shortage of some goods;
• The emergence of the black market (as a logical reaction to the previous point);
• The inability to quickly and effectively implement the latest achievements of scientific and technological progress (thanks to which the planned economy always remains one step behind the other competitors of the global market).

Nevertheless, this economic system also had its advantages. One of them was the possibility of ensuring social stability for everyone.

Market Economic System

The market is a complex and multifaceted economic system that is characteristic of most countries of the modern world. Also known under a different name: "capitalism". The fundamental principles of this system are the principle of individualism, free enterprise and healthy market competition, based on the relationship between supply and demand. This is dominated by private property, and the main incentive to productive activity is the thirst for profit.

Nevertheless, such an economy is far from ideal. The market type of the economic system also has its drawbacks:

• Uneven distribution of income;
• Social inequality and social insecurity of certain categories of citizens;
• Instability of the system, which manifests itself in the form of periodic acute crises in the economy;
• Predatory, barbarous use of natural resources;
• Poor financing of education, science and other non-profitable programs.

In addition to these, economists also distinguish the fourth - a mixed type of economic system in which both the state and the private sector have an equivalent weight. In such systems, the functions of the state in the economy of the country are reduced to supporting important (but unprofitable) enterprises, financing science and culture, controlling unemployment, and so on.

Economic system and types of economic systems: examples of countries

It remains to consider examples of modern countries, which are characterized by this or that economic system. For this purpose, a special table is presented below. Types of economic systems in it are submitted taking into account the geography of their distribution. It is worth noting that this table is very subjective, as it is difficult for many modern states to unequivocally assess which of the systems they relate to.

What is the type of economic system in Russia? In particular, the professor of Moscow State University A. Buzgalin characterized the modern economy of Russia as a "mutation of late capitalism." In general, the country's economic system is now considered to be a transitional one, with an actively developing market.

Finally

Each economic system responds differently to the three main questions of the economy: "what, how and for whom to produce?" Modern economists distinguish four of their main types: a traditional, command-planned, market, and a mixed system.

Speaking of Russia, we can say that in this state a specific type of economic system has not yet settled. The country is in a transitional phase between the command and modern market economies.