The economic system is a set of methods for organizing economic and economic processes taking place in society: the production of material goods and their distribution, consumption, the use of natural resources of the state and so on. In turn, the types of economic system
determined by the nature and form of the processes of production, exchange, distribution and consumption in society. The diversity of human civilizations shows us the most diverse forms of management. However, as a rule, modern scientists classify all types of economic systems in the history of human society into four main options. Consider them.
Types of economic system: traditional economy
This is historically the earliest and most primitive form of management. Such societies are deeply taboo and traditional. And it is traditions that determine the main economic issues: how much and what to produce, for whom, whom and how to engage in production, what will be the system of encouragement and coercion, how to distribute the final product among members of society. Such economies are accompanied by archaism, backward technologies, the widespread use of manual labor, and the conservatism of society in relation to any innovations. In addition to historical examples, this type of management is present in a number of modern underdeveloped countries.
Administrative-command type of economic system
This option was implemented in the first quarter of the 20th century by the corporate fascist regime and socialist states. The key point of these economies is the nationalization of all means of production and the financial structure: factories, factories, banks, and so on. As a result, the state government takes over the full control over economic management: pricing, market supply, salary growth, the balance of economic sectors and so on. Everything is subordinated to the supremacy of state needs.
Types of economic system: free market
The country's economic development is recognized as a natural process. There is no direct control over this area. The state provides great opportunities for private owners. However, it reserves indirect methods of regulating the economy, such as fiscal policy. In a free market, free decision rights and competition often lead to a revival of economic activity. But at the same time also to the emergence of monopoly giants and their subsequent usurpation of the market, to interference in the political and social life of the country.
Mixed type of economic system
This is a kind of legacy left by the two previous types, and some of their consensus. In the most progressive states of today, it is the mixed system that operates in its various versions: the USA, Japan and most countries of the European Union. It allows the functioning of the free market. At the same time, the state, taking advantage of its fruits, retains significant leverage over the state economy. Thus, the shortcomings of the two previous systems are smoothed out.
