Economic system

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An economic system is a mechanism (social institution) which deals with the production, distribution and consumption of goods and services in a particular society.

The economic system is composed of people, institutions and their relationships to resources, such as the convention of property. It addresses the problems of economics, like the allocation and scarcity of resources.

1 The division of economic systems
2 List by hands-on and hands-off
3 List by Name
4 See also

[edit] The division of economic systems

There are several basic and unfinished questions that must be answered in order to resolve the problems of economics satisfactorily. The scarcity problem, for example, requires answers to basic questions, such as: what to produce, how to produce it, and who gets what is produced. An economic system is a way of answering these basic questions. Different economic systems answer them differently.

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.

The basic and general economic systems are:

Market economy (the basis for several "hands off" systems, such as capitalism).
Mixed economy (a compromise economic system that incorporates some aspects of the market approach as well as some aspects of the planned approach).
Planned economy (the basis for several "hands on" systems, such as socialism).
Traditional economy (a generic term for the oldest and traditional economic systems)
Participatory economics (a recent proposal for a new economic system)

An economic system can be considered a part of the social system and hierarchically equal to the law system, political system, cultural system, etc.

More detailed lists of economic systems are given below.

[edit] List by hands-on and hands-off

Typically, "hands-on" economic systems involve a greater role for society and/or the government to determine what gets produced, how it gets produced, and who gets the produced goods and services, with the stated aim of ensuring social justice and a more equitable distribution of wealth (see welfare state). Meanwhile, "hands-off" economic systems give more power to certain private individuals (or corporations) to make those decisions, rather than leaving them up to society as a whole, and often limit government involvement in the economy.

The primary concern of "hands-on" economic systems is usually egalitarianism, while the primary concern of "hands-off" economic systems is usually private property. Libertarians target individual economic freedom as a primary goal of their "hands-off" policies.

The following list divides the main economic systems into "hands-on" and "hands-off," it attempts to structure the systems in a given section by alphabetical order and in a vertical hierarchy where possible.

[edit] "Hands-on" systems

[edit] "Hands-off" systems

[edit] "Compromise" systems

Mixed economy
- American School
- Dirigisme
- Japanese System
- Mercantilism
- Social market economy also known as Soziale Marktwirtschaft

[edit] List by Name

An etymologist's approach to economic systems, this list attempts to sort all possible economic systems in alphabetical order, without any division or hierarchization. If a given economic system has several names, a note beside the economic system provides the most common alternate names.