Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. Mixed-market-based economic system with limited government involvement

1.1. Pros-can lead to incredible results with equal distribution of control, more efficiency for private firms, freedom for private enterprise to thrive on their own and more job investments coming in.

1.2. Cons-it can also suffer from similar downfalls found in other economies. For example, the last hundred years in America has seen a rise in government power. Not just in imposing laws and regulations, but in actually gaining control, becoming more difficult to access while simultaneously becoming less flexible. This is a common tendency of mixed economies.

1.3. United States is an example by how it protects ownership of private property. It also limits government interference in business operations. That promotes the innovation that's a hallmark of a market economy. At the same time, the Constitution encourages the government to promote general welfare. That creates the ability to use aspects of a command economy where needed.

2. Traditional-an economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services

2.1. Pros-tradition and custom is preserved while it is virtually non-existent in market/mixed economies. There is also the fact that each member of a traditional economy has a more specific and pronounced role, and these societies are often very close-knit and socially satisfied.

2.2. Cons-The main disadvantage is that traditional economies do not enjoy the things other economies take for granted: Western medicine, centralized utilities, technology, etc. But as anyone in America can attest, these things do not guarantee happiness, peace, social or, most ironically of all, economic stability.

2.3. Africa is an example this economy with the ingenious population of the world like the Pygmies belonging to the Congo region in Central Africa

3. Command-economic system in which a central authority is in command of the economy; a centrally planned economy

3.1. Pros-capable of creating a healthy supply of its own resources and it generally rewards its own people with affordable prices (but because it is ultimately regulated by the government, it is ultimately priced by the government).

3.2. Cons-Still, there is often no shortage of jobs as the government functions similarly to a market economy in that it wants to grow and grow upon its populace.

3.3. Cuba is an example; being a small country maintains a command economy, with the government maintaining control of production and distribution of things it feels the public needs. When a neighboring nation threatens, sending armed patrols across the border, the government decides it would be in the public’s best interest to build up its supply of arms and train military personnel. It must then shift allocation of certain resources from producing things the people do not require, perhaps shutting down manufacturing of luxury clothing items.

4. Market-economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

4.1. Pros-the biggest advantage to a market economy is the separation of the market and the government. This prevents the government from becoming too powerful, too controlling and too similar to the governments of the world that oppress their people while living lavishly on controlled resources. In the same way that separation of church and state has been to vital to America’s social success, so has a separation of market and state been vital to our economic success. Yes, there is something wary about a system which to be successful must foster constant growth, but as a result progress and innovation have occurred at such incredible rates as to affect the way the world economy functions.

4.2. Cons- Market economy can result to having inferior products, it is not beneficial to workers and the environment, it can cause prices of commodities to skyrocket, and it can create an imbalance in the economy.

4.3. United States is an example of a mixed economy, with some of the characteristics of a market economy, but with a moderate level of governmental control. For example, the government regulates mergers in the television and Internet provider industry to prevent monopolies. Additionally, there are some laws that set price controls, such as laws protecting against price spikes during natural disasters.

5. It is important to have a economic system in place because economic systems are needed for humanity not to revert back to the ways of our revolutionary ancestors. For we know that mankind’s superior intelligence, made-up of many unique compositions, using a collaborative approach, can build to strengthen our renewability and as a result can serve to prolong mankind’s evolutionary sustainability. Second however, that means our economic systems must subjugate to our best understanding of how nature works, and none of our current religions of economics even mention, let alone subjugate, to evolution. A gigantic and costly mistake, one we already see the grave consequences from. (Hoegaerden, G. V. (2017, February 13). Quora - A place to share knowledge and better understand the world. Retrieved July 29, 2018, from Why are economic systems considered to be important? - Quora)