Concept
Economic system
Overview
An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within an economy. It includes the combination of the various institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
An economic system is a type of social system. The mode of production is a related concept. All economic systems must confront and solve the four fundamental economic problems:
What kinds and quantities of goods shall be produced: This fundamental economic problem is anchored on the theory of pricing. The theory of pricing, in this context, has to do with the economic decision-making between the production of capital goods and consumer goods in the economy in the face of scarce resources. In this regard, the critical evaluation of the needs of the society based on population distribution in terms of age, sex, occupation, and geography is very pertinent.
How goods shall be produced: The fundamental problem of how goods shall be produced is largely hinged on the least-cost method of production to be adopted as gainfully peculiar to the economically decided goods and services to be produced. On a broad note, the possible production method includes labor-intensive and capital-intensive methods.
How the output will be distributed: Production is said to be completed when the goods get to the final consumers. This fundamental problem clogs in the wheel of the chain of economic resources distributions can reduce to the barest minimum and optimize consumers' satisfaction.
When to produce: Consumer satisfaction is partly a function of seasonal analysis as the forces of demand and supply have a lot to do with time. This fundamental economic problem requires an intensive study of time dynamics and seasonal variation vis-a-vis the satisfaction of consumers' needs. It is noteworthy to state that solutions to these fundamental problems can be determined by the type of economic system.
The study of economic systems includes how these various agencies and institutions are linked to one another, how information flows between them, and the social relations within the system (including property rights and the structure of management). The analysis of economic systems traditionally focused on the dichotomies and comparisons between market economies and planned economies and on the distinctions between capitalism and socialism. Subsequently, the categorization of economic systems expanded to include other topics and models that do not conform to the traditional dichotomy.
Today the dominant form of economic organization at the world level is based on market-oriented mixed economies. An economic system can be considered a part of the social system and hierarchically equal to the law system, political system, cultural and so on. There is often a strong correlation between certain ideologies, political systems and certain economic systems (for example, consider the meanings of the term "communism"). Many economic systems overlap each other in various areas (for example, the term "mixed economy" can be argued to include elements from various systems). There are also various mutually exclusive hierarchical categorizations.
Emerging conceptual models posit future economic systems driven by synthetic cognition, where artificial agents generate value autonomously rather than relying on traditional human labour.
Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).
Possible passages
Found by search and not yet checked by a person; they may only mention the idea in passing.
It cannot be said that our present economic system is any more successful in regard to the other three objects which ought to be aimed at. Among the many obvious evils of capitalism and the wage system, none are more glaring than that they encourage predatory instincts, that they allow economic injustice, and that they give great scope to the tyranny of…
Bertrand Russell, Political Ideals
States what Economic system is; opens on Economic system.
There must, then, according to Bolshevik theory, be armed conflict sooner or later, if the injustices of the present economic system are ever to be remedied. Not only do they assume armed conflict: they have a fairly definite conception of the way in which it is to be conducted.
Bertrand Russell, The Practice and Theory of Bolshevism
States what Economic system is; opens on Economic system.
But in the course of time, the process of the metamorphosis of commodities which produces the different forms of money, transforms also the owners of commodities or changes the character in which they appear before each other in the community. In the process of metamorphosis of the commodity the guardian of the latter changes his skin as often as the commodity changes place or as the money assumes new forms.
Karl Marx, A Contribution to the Critique of Political Economy
States what Economic system is; the author is tied to Economic system in the knowledge graph.
Philosophers who discussed Economic system
Related ideas
- Anarcho-capitalism
- Social system
- Feudalism
- Free market
- Anarchism
- Goods and services
- Private property
- Imperialism
- Murray Bookchin
- Statism
- Joseph Schumpeter
- Wage labour
- Laissez-faire
- Karl Marx
- Islamic economics
- Anarchist communism
- Mutualism (economic theory)
- Libertarian socialism
- Capital (economics)
- Social democracy
- Culture
- Mercantilism
- Marxism–Leninism
- Natural resource
Opposing perspectives
- Social democracy
- Democratic socialism
- Reformism
- Italian fascism
- Social structure
- Productive forces
- Profit (economics)
Place in the tradition
Part of Communism.