Classifying scientific phenomena has always been quite difficult. The validity and success of this will largely depend on the correct choice of a sign of separation. In order to highlight the types of economy in the modern scientific approach, different signs are used. Since there are several approaches to the generalization and characterization of management systems, there will be a lot of classifications.
Criteria for the types of economic systems
To the level of abstraction when considering various types of economic systems and their characteristics was closer to the real processes taking place in public economic life, it is necessary to consider the signs by which they are classified.
In accordance with the existing form of management, there are types of economies with natural and commodity types of exchange. If we classify the types of state economy according to the main form of ownership, we distinguish community, private ownership, cooperative-public and mixed types of management.
By the method of managing the actions of economic entities, there are distinguished such basic types as traditional, market, planned management. This is the most common type of classification. The presented types of economic systems and their characteristics provide the fullest picture of the characteristics of the economy of the last two centuries.
Other classifications of types of economic systems
If we take into account the criterion of the method of income distribution, we can distinguish the community-leveling type, with the distribution of income in accordance with the land, with the distribution of income in accordance with production factors, with a distribution by the amount of labor contribution.
According to the type of state intervention, there are free, liberal, administrative-command, economically regulated and mixed types of economy. And according to the criterion of economic involvement in world relations, an open and closed system can be distinguished.
By the degree of maturity, systems are distinguished into emerging, developed, mature and degrading types of state economy.
Traditional system classification
In modern Western literature, there is the most common classification, which contains only three different types of economic systems. In the works of K. R. McConnell and S. L. Brue, such systems as the traditional, market, and command types of the economy are distinguished.
However, only in the last two centuries in the world there were much more types of management systems. These include a market economy with free competition (pure capitalism), a modern market economy (free capitalism), a traditional and administrative command system.
The presented models are distinguished by the diversity of economic development within individual countries. Therefore, the types of economic systems and their characteristics should be considered based on these features.
Pure capitalism
A free-market market economy took shape in the 18th century. and ceased to exist in the first decades of the twentieth century. Many elements of this system have entered the modern market economy.
Distinctive features of pure capitalism are private ownership of investment resources, the mechanism for regulating activities at the macro level is based on free competition, and many buyers and sellers operate independently in each field of activity. The employee and entrepreneur acted as equal legal agents of market relations.
Types of market economy until the twentieth century determined economic development through prices and the market. Such a system turned out to be the most flexible, able to adapt to the realities of the functioning of economic relations in society.
Modern capitalism
The current market economy arose in the early twentieth century. during the period of rapid development of the scientific and technological revolution. During this period, the state began to more actively influence the development of the national economy.
Planning is seen as an instrument of government in the regulation of the economy. These types of economies made it possible to quickly adapt to changing market needs. Based on marketing research, the issue of the volume and structure of products, as well as the forecast of the priority areas of scientific and technical progress, is being resolved.
Large companies and the state began to allocate more resources for the development of the human factor (education, medicine, social needs). The state in developed countries today allocates up to 40% of budget allocations to fight poverty. Employer companies care about their employees by providing funding to improve working conditions and social guarantees for their employees.
Traditional management system
In economically underdeveloped countries, the system of using manual labor and backward technologies has been preserved. In a number of such countries, natural-community forms of distribution of the created product prevail. The main types of economies in underdeveloped countries in the economic sphere suggest the existence of a large number of small enterprises and industries. These are many peasant handicraft farms. A huge role in the economy of such countries is played by foreign capital.
In the life of a society that implements the traditional economic system of an organization, traditions, customs, religious values, caste division, and other factors holding back scientific and technological progress occupy an important place.
The state redistributes through the budget the national income. Its role is quite active, since it is the central government that directs funds for social support to the poorest segments of the population.
Administrative command system
This system is also called a centralized economic system. Its dominance spread earlier in the countries of Eastern Europe, in a number of Asian states, as well as in the USSR. This economic system is also called centralized. It is characterized by public ownership, which in reality was state property for all economic resources, bureaucratization of the economy, and administrative planning.
The centralized economic system applies direct control of almost all industries from a single center - power. The state absolutely controls the distribution of products and production. This causes the monopolization of all areas of the national economy. As a result, inhibition of scientific and technological progress was observed.
The system presented had its own specific ideological attitudes. They explained the process of planning the volume and structure of production is too complicated to entrust directly to manufacturers. Central planning authorities determined the structure of the general needs of the country's population. It is impossible to foresee all changes in needs on such a scale. Therefore, the most minimal of them were satisfied.
