The economic system is a set of mechanisms and measures aimed at organizing and distributing all kinds of society resources for the consumption of goods. In other words, this concept can be described as making decisions about what to produce, how and for whom.
In this regard, three main problems of the economic system can be characterized. The first is due to the fact that it is necessary to implement the best development option, which will allow to produce the required amount of goods and services in conditions of limited resources. The second is determined by production efficiency. This means that you should find out with the help of which technologies and at what enterprises it will be most profitable to produce the required products. The third problem includes solutions based on the principles of distribution of released goods between different consumers.
The main features of the economic system can be considered the method of regulating economic relations, as well as the nature of ownership, which determines the means of production. In this regard, several types of systems can be defined:
1. Traditional.
2. The team.
3. Market.
4. Mixed.
Consider the presented classification in more detail.
The traditional economic system is a structure based on subsistence farming and common ownership. The distribution of funds and resources, as well as their use, is carried out in accordance with established customs and traditions. This system can be characterized by small-scale production, conservatism, and backward production technologies. Currently, it is observed in underdeveloped countries.
Team economic system is a peculiar way of building the economic life of society. Here, the most significant means of production are in state power, while the distribution of resources occurs centrally through planning.
A market economic system is one in which there is free competition, represented by freedom of choice, entrepreneurship, as well as a private form of ownership of resources. The regulatory process takes place almost without government intervention. Thus, the restoration of proportions and maintaining balance occur naturally.
A mixed economic system is a certain combination of the public and private sectors. State regulation ensures the safety of citizens' social life, and the state itself is directly involved in providing the society with all kinds of social benefits.
The effectiveness of economic systems can be determined using some parameters, such as supply and demand, price and competition. The interaction between the first three in the economy is called the "market mechanism". This indicator determines the coordination of actions between consumers and producers. In turn, competition helps to identify the degree of non-influence on the price of each participant in market relations.
