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An economic system, or economic order, is a
system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its boundaries, structure and purpo ...

system
of
production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a statistic, g ...
,
resource allocation In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods an ...
and
distributionDistribution may refer to: Mathematics *Distribution (mathematics) Distributions, also known as Schwartz distributions or generalized functions, are objects that generalize the classical notion of functions in mathematical analysis. Distr ...
of
goods and services Goods are items that are usually (but not always) tangible, such as pens, salt, apples, and hats. Services are activities provided by other people, who include doctors, lawn care workers, dentists, barbers, waiters, or online servers, a book, a ...
within a
society A society is a group A group is a number A number is a mathematical object used to counting, count, measurement, measure, and nominal number, label. The original examples are the natural numbers 1, 2, 3, 4, and so forth. Numbers can be ...

society
or a given geographic area. It includes the combination of the various
institution Institutions, according to Samuel P. Huntington, are "stable, valued, recurring patterns of behavior." Institutions can refer to social mechanism, mechanisms which govern the behavior of a set of individuals within a given community, and are ide ...
s, agencies, entities, decision-making processes and patterns of
consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically in biology: * Consumption (ecology), receipt of energy by consuming other organisms in social sciences: * Consumption (economics), the purchasing of ...
that comprise the economic structure of a given community. An economic system is a type of
social system In sociology, social system is the patterned network of relationships constituting a coherent whole that exist between individuals, groups, and institutions. It is the formal Social structure, structure of role and status that can form in a small, ...
. The
mode of production In the writings of Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist and socialist revolutionary. Born in Trier, German Confederation, ...
is a related concept. All economic systems must confront and solve the four fundamental economic problems: * What kinds and quantities of goods shall be produced. * How goods shall be produced. * How the output will be distributed. * When to produce. The study of economic systems includes how these various agencies and institutions are linked to one another, how information flows between them, and the social relations within the system (including
property rights The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically hea ...
and the structure of management). The analysis of economic systems traditionally focused on the dichotomies and comparisons between
market economies A market economy is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services wit ...
and
planned economies A planned economy is a type of economic system where investment To invest is to allocate money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with th ...
and on the distinctions between
capitalism Capitalism is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services within ...
and
socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
. Subsequently, the categorization of economic systems expanded to include other topics and models that do not conform to the traditional dichotomy. Today the dominant form of economic organization at the world level is based on market-oriented mixed economies. An economic system can be considered a part of the
social system In sociology, social system is the patterned network of relationships constituting a coherent whole that exist between individuals, groups, and institutions. It is the formal Social structure, structure of role and status that can form in a small, ...
and hierarchically equal to the law system,
political system In political science Political science is the scientific study of politics. It is a social science dealing with systems of governance and power, and the analysis of politics, political activities, political thoughts, political behavior, and asso ...
,
cultural Culture () is an umbrella term which encompasses the social behavior and Norm (social), norms found in human Society, societies, as well as the knowledge, beliefs, arts, laws, Social norm, customs, capabilities, and habits of the individuals in ...
and so on. There is often a strong correlation between certain
ideologies An ideology () is a set of belief A belief is an Attitude (psychology), attitude that something is the case, or that some proposition about the world is truth, true. In epistemology, philosophers use the term "belief" to refer to attitudes abo ...
,
political system In political science Political science is the scientific study of politics. It is a social science dealing with systems of governance and power, and the analysis of politics, political activities, political thoughts, political behavior, and asso ...
s and certain economic systems (for example, consider the meanings of the term "
communism Communism (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...

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.


List of economic systems

* Resource based economy *
Capitalism Capitalism is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services within ...
*
Communism Communism (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...

Communism
*
Socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
*
Feudalism Feudalism, also known as the feudal system, was the combination of the legal, economic, military, and cultural customs that flourished in Medieval Europe In the history of Europe, the Middle Ages or medieval period lasted from the 5t ...
*
Distributism Distributism is an economic theory asserting that the world's productive assets should be widely owned rather than concentrated. Developed in the late 19th and early 20th centuries, distributism was based upon the principles of Catholic social ...
*
Statism In political science Political science is the scientific study of politics. It is a social science dealing with systems of governance and power, and the analysis of politics, political activities, political thoughts, political behavior, and as ...
* Hydraulic despotism *
Inclusive democracy Inclusive Democracy (ID) is a project that aims for direct democracy; economic democracy in a stateless, moneyless and marketless economy; self-management (democracy in the socio-economic realm); and ecological democracy. The theoretical p ...
*
Market economy A market economy is an economic system in which the decisions regarding investment To invest is to allocate money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III ar ...
*
Mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism and tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a possible cu ...

Mercantilism
* Mutualism * Network economy * Non-property system *
Palace economy A palace economy or redistribution economy is a system of economic organization in which a substantial share of the wealth flows into the control of a centralized administration, the palace, and out from there to the general population, which may b ...
* Participatory economy *
Potlatch continue the practice of potlatch. Illustrated here is ''Wawadit'la'' in Thunderbird Park (Victoria, British Columbia), Thunderbird Park, Victoria, British Columbia, Victoria, BC, a Longhouse, big house built by Chief Mungo Martin in 1953. Wealthy ...

Potlatch
*
Progressive utilization theory Progressive utilization theory (PROUT) is a socioeconomic and political theory created by the Indian philosopher and spiritual leader Prabhat Ranjan Sarkar. Sarkar conceived of PROUT in 1959. Supporters of PROUT (Proutists) claim that the theory ...
(PROUTist economy) * Proprietism *
Social Credit Social credit is an interdisciplinary and distributive philosophy developed by C. H. Douglas. It encompasses economics Economics () is the social science that studies how people interact with value; in particular, the Production ( ...
*
Workers' self-management Workers' self-management, also referred to as labor management and organizational self-management, is a form of organizational management Management (or managing) is the administration of an organization, whether it is a business, a not-for ...


Academic field of study

Economic systems is the category in the ''Journal of Economic Literature'' classification codes that includes the study of such systems. One field that cuts across them is
comparative economic systems Comparative Economic Systems is the sub-field of economics dealing with the comparative study of different systems of economic organization, such as capitalism Capitalism is an economic system based on the private ownership of the means of p ...
, which includes the study of the following aspects of different systems: * Planning, coordination and reform. * Productive enterprises; factor and product markets; prices; population. * National income, product and expenditure; money; inflation. * International trade, finance, investment and aid. * Consumer economics; welfare and poverty. * Performance and prospects. * Natural resources; energy; environment; regional studies. * Political economy; legal institutions; property rights.


Main types


Capitalism

Capitalism Capitalism is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services within ...
generally features the private ownership of the means of production (
capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc ...
) and a
market economy A market economy is an economic system in which the decisions regarding investment To invest is to allocate money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III ar ...
for coordination.
Corporate capitalism In social science and economics, corporate capitalism is a Capitalism, capitalist marketplace characterized by the dominance of hierarchical and bureaucratic corporations. Overview A large proportion of the economy of the United States and its la ...
refers to a capitalist marketplace characterized by the dominance of
hierarchical A hierarchy (from the Greek: , from , 'president of sacred rites') is an arrangement of items (objects, names, values, categories, etc.) in which the items are represented as being "above", "below", or "at the same level as" one another. Hierarch ...

hierarchical
,
bureaucratic The term bureaucracy () may refer both to a body of non-elected governing officials and to an administrative policy-making group. Historically, a bureaucracy was a government administration managed by departments staffed with non-elected offi ...
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
s.
Mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism and tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce a possible cu ...

Mercantilism
was the dominant model in Western Europe from the 16th to 18th century. This encouraged
imperialism Imperialism is a policy or ideology of extending rule over peoples and other countries, for extending political and economic access, power and control, often through employing hard power Hard power is the use of military and economics, economic ...

imperialism
and
colonialism Colonialism is a practice or policy of control by one people or power over other people or areas, often by establishing colony, colonies and generally with the aim of economic dominance. In the process of colonisation, colonisers may impose thei ...

colonialism
until economic and political changes resulted in global
decolonization Decolonization (American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the United States The United States of America (USA), commonly known as the United States (U ...
. Modern capitalism has favored
free trade Free trade is a trade policy A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade International trade is the exchange of capital, goods, and service ...
to take advantage of increased efficiency due to national
comparative advantageThe law of comparative advantage describes how, under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage. In an economic model In economics, a model is a theory, theoretical construct ...

comparative advantage
and
economies of scale 330px, As quantity of production increases from Q to Q2, the average cost of each unit decreases from C to C1. LRAC is the long-run average cost In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their sca ...

economies of scale
in a larger, more universal market. Some critics have applied the term
neo-colonialism Neocolonialism is the practice of using economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumpt ...
to the power imbalance between multi-national corporations operating in a
free market In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goo ...
vs. seemingly impoverished people in
developing countries 450px, Example of Older Classifications by the IMF and the United Nations, UN from 2008 A developing country is a country with a less developed industrial base and a low Human Development Index (HDI) relative to other countries. However, ...
.


Mixed economy

There is no precise definition of a "mixed economy". Theoretically, it may refer to an economic system that combines one of three characteristics: public and private ownership of industry, market-based allocation with economic planning, or free markets with state interventionism. In practice, "mixed economy" generally refers to market economies with substantial state interventionism and/or sizable public sector alongside a dominant private sector. Actually, mixed economies gravitate more heavily to one end of the spectrum. Notable economic models and theories that have been described as a "mixed economy" include the following: *
Georgism Georgism, also called in modern times geoism and known historically as the single tax movement, is an economic ideology An economic ideology distinguishes itself from economic theory in being Normative economics, normative rather than just expl ...
– socialized rents on land *
Mixed economy A mixed economy is variously defined as an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of go ...
(It can be categorized under many titles) ** American School **
Dirigisme Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive role as opposed to a merely regulatory Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these ...
**
Indicative planning Indicative planning is a form of economic planning implemented by a state in an effort to solve the problem of imperfect information in market economies by coordination of private and public investment through forecasts and output targets. The ...
, also known as a planned market economy ** Japanese system **
Nordic model The Nordic model comprises the economic An economy (from Greek language, Greek οίκος – "household" and νέμoμαι – "manage") is an area of the Production (economics), production, Distribution (economics), distribution and trade, ...
**
Progressive utilization theory Progressive utilization theory (PROUT) is a socioeconomic and political theory created by the Indian philosopher and spiritual leader Prabhat Ranjan Sarkar. Sarkar conceived of PROUT in 1959. Supporters of PROUT (Proutists) claim that the theory ...
**
Social corporatism Social corporatism, also called social democratic corporatism, is a form of economic tripartite corporatism Corporatism is a political ideology which advocates the organization of society by corporate groups, such as agricultural, labour, ...
** Social market economy, also known as ''Soziale Marktwirtschaft'' (Mixed capitalist) **
New Economic Policy The New Economic Policy (NEP) () was an economic policy The economic policy of governments covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the labour market, nationalizat ...
(Mixed socialist) **
State capitalism State capitalism is an economic system in which the State (polity), state undertakes business and Commerce, commercial (i.e. Profit (economics), for-profit) economic activity and where the means of production are nationalization, nationalized as s ...
**
Socialist Market Economy The socialist market economy (SME) is the economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of g ...


Socialist economy

Socialist economic systems (all of which feature
social ownership Social ownership is the appropriation of the surplus product Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philoso ...
of the
means of production The means of production is a concept that encompasses the social use and ownership Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual prope ...
) can be subdivided by their coordinating mechanism (planning and markets) into planned socialist and
market socialist Market socialism is a type of economic system involving the public, cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social ...
systems. Additionally,
socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
can be divided based on their property structures between those that are based on
public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
, worker or consumer
cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous The federal subject in Russia">Federal subjects of Russia">federal subject in Russia, close to borders of Finland. Picture of Petrozavodsk, the capital of the ...
s and
common ownership Common ownership refers to holding the assets of an organization, enterprise Enterprise (or the archaic spelling Enterprize) may refer to: Business and economics Brands and enterprises * Enterprise GP Holdings Enterprise GP Holdings ...
(i.e. non-ownership).
Communism Communism (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...
is a hypothetical stage of socialist development articulated by Karl Marx as "second stage socialism" in ''
Critique of the Gotha Program The ''Critique of the Gotha Programme'' (german: Kritik des Gothaer Programms) is a document based on a letter by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher A philosopher is someone who practices ...
'', whereby the economic output is distributed based on need and not simply on the basis of labor contribution. The original conception of socialism involved the substitution of money as a unit of calculation and monetary prices as a whole with
calculation in kind __NOTOC__ Calculation in kind or calculation in-natura is a way of valuating resources and a system of accounting that uses disaggregated Physical quantity, physical magnitudes as opposed to a common unit of calculation. As the basis for a socialis ...
(or a valuation based on natural units), with business and financial decisions replaced by engineering and technical criteria for managing the economy. Fundamentally, this meant that socialism would operate under different economic dynamics than those of capitalism and the price system. Later models of socialism developed by neoclassical economists (most notably
Oskar Lange Oskar Ryszard Lange (27 July 1904 – 2 October 1965) was a Poland, Polish economics, economist and diplomat. He is best known for advocating the use of market (economics), market pricing tools in socialism, socialist systems and providing a model ...
and
Abba Lerner Abraham "Abba" Ptachya Lerner (also Abba Psachia Lerner; 28 October 1903 – 27 October 1982) was a Russian-born British economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual ...

Abba Lerner
) were based on the use of notional prices derived from a trial-and-error approach to achieve market clearing prices on the part of a planning agency. These models of socialism were called "market socialism" because they included a role for markets, money, and prices. The primary emphasis of socialist planned economies is to coordinate production to produce economic output to directly satisfy economic demand as opposed to the indirect mechanism of the profit system where satisfying needs is subordinate to the pursuit of profit; and to advance the
productive forces Productive forces, productive powers, or forces of production (German German(s) may refer to: Common uses * of or related to Germany * Germans, Germanic ethnic group, citizens of Germany or people of German ancestry * For citizens of Germany, ...
of the economy in a more efficient manner while being immune to the perceived systemic inefficiencies (
cyclical processes
cyclical processes
) and crisis of
overproduction In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods ...
so that production would be subject to the needs of society as opposed to being ordered around capital accumulation. In a pure socialist planned economy that involves different processes of resource allocation, production and means of quantifying value, the use of money would be replaced with a different measure of value and accounting tool that would embody more accurate information about an object or resource. In practice, the economic system of the former Soviet Union and Eastern Bloc operated as a command economy, featuring a combination of state-owned enterprises and central planning using the material balances method. The extent to which these economic systems achieved socialism or represented a viable alternative to capitalism is subject to debate. In orthodox Marxism, the
mode of production In the writings of Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist and socialist revolutionary. Born in Trier, German Confederation, ...
is tantamount to the subject of this article, Base and superstructure, determining with a superstructure of relations the entirety of a given culture or stage of human development.


Components

There are multiple components of an economic system. Decision-making structures of an economy determine the use of economic inputs (the factors of production), distribution of output, the level of centralization in decision-making and who makes these decisions. Decisions might be carried out by Industrial democracy, industrial councils, by a government agency, or by private owners. An economic system is a system of production, resource allocation, exchange and distribution of goods and services in a society or a given geographic area. In one view, every economic system represents an attempt to solve three fundamental and interdependent problems: * What goods and services shall be produced and in what quantities? * How shall goods and services be produced? That is, by whom and with what resources and technologies? * For whom shall goods and services be produced? That is, who is to enjoy the benefits of the goods and services and how is the total product to be distributed among individuals and groups in the society? Every economy is thus a system that allocates resources for exchange, production, distribution and consumption. The system is stabilized through a combination of threat and trust, which are the outcome of institutional arrangements. An economic system possesses the following institutions: * Methods of control over the factors or
means of production The means of production is a concept that encompasses the social use and ownership Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual prope ...
: this may include ownership of, or property rights to, the means of production and therefore may give rise to claims to the proceeds from production. The means of production may be owned privately, by the state, by those who use them, or be held in common. * A decision-making system: this determines who is eligible to make decisions over economic activities. Economic agents with decision-making powers can enter into binding contracts with one another. * A coordination mechanism: this determines how information is obtained and used in decision-making. The two dominant forms of coordination are planning and markets; planning can be either decentralized or centralized, and the two coordination mechanisms are not mutually exclusive and often co-exist. * An incentive system: this induces and motivates economic agents to engage in productive activities. It can be based on either material reward (compensation or self-interest) or moral suasion (for instance, social prestige or through a democratic decision-making process that binds those involved). The incentive system may encourage specialization and the division of labor. * Organizational form: there are two basic forms of organization: actors and regulators. Economic actors include households, work gangs and production teams, firms, joint venture, joint-ventures and cartels. Economically regulative organizations are represented by the state and market authorities; the latter may be private or public entities. * A distribution system: this allocates the proceeds from productive activity, which is distributed as income among the economic organizations, individuals and groups within society, such as property owners, workers and non-workers, or the state (from taxes). * A public choice mechanism for law-making, establishing rules, norms and standards and levying taxes. Usually, this is the responsibility of the state, but other means of collective decision-making are possible, such as chambers of commerce or workers’ councils.


Typology

There are several basic questions that must be answered in order for an economy to run 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 and different economic systems answer them differently. Many different objectives may be seen as desirable for an economy, like Economic efficiency, efficiency, economic growth, growth, liberty and Equality of outcome, equality. Economic systems are commonly segmented by their property rights regime for the means of production and by their dominant resource allocation mechanism. Economies that combine private ownership with market allocation are called "market capitalism" and economies that combine private ownership with economic planning are labelled "command capitalism" or dirigisme. Likewise, systems that mix public or cooperative ownership of the means of production with economic planning are called "socialist planned economies" and systems that combine public or cooperative ownership with markets are called "market socialism". Some perspectives build upon this basic nomenclature to take other variables into account, such as class processes within an economy. This leads some economists to categorize, for example, the Soviet Union's economy as state capitalism based on the analysis that the working class was exploited by the party leadership. Instead of looking at nominal ownership, this perspective takes into account the organizational form within economic enterprises. In a Capitalism, capitalist economic system, production is carried out for private profit and decisions regarding investment and allocation of factor inputs are determined by business owners in factor markets. The means of production are primarily owned by private enterprises and decisions regarding production and investment are determined by private owners in capital markets. Capitalist systems range from ''laissez-faire'', with minimal government regulation and state enterprise, to regulated and social market systems, with the aims of ameliorating market failures (see economic intervention) or supplementing the private marketplace with social policies to promote equal opportunities (see welfare state), respectively. In socialist economic systems (
socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
), production for use is carried out; decisions regarding the use of the means of production are adjusted to satisfy economic demand; and investment is determined through economic planning procedures. There is a wide range of proposed planning procedures and ownership structures for socialist systems, with the common feature among them being the social ownership of the means of production. This might take the form of
public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
by all of the society, or ownership Worker cooperative, cooperatively by their employees. A socialist economic system that features social ownership, but that it is based on the process of capital accumulation and utilization of capital markets for the allocation of capital goods between socially owned enterprises falls under the subcategory of market socialism.


By resource allocation mechanism

The basic and general "modern" economic systems segmented by the criterium of resource allocation mechanism are: *
Market economy A market economy is an economic system in which the decisions regarding investment To invest is to allocate money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III ar ...
("hands off" systems, such as ''laissez-faire'' capitalism) *
Mixed economy A mixed economy is variously defined as an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of go ...
(a hybrid that blends some aspects of both market and planned economies) * Planned economy ("hands on" systems, such as state socialism, also known as "command economy" when referring to the Soviet-type economic planning, Soviet model) Other types: * Traditional economy (a generic term for older economic systems, opposed to modern economic systems) ** Non-monetary economy (without the use of money, opposed to monetary economy ) ** Subsistence economy (without economic surplus, surplus, exchange or market trade ) ** Gift economy (where an exchange is made without any explicit agreement for immediate or future rewards and Profit (economics), profits ) ** Barter economy (where goods and services are directly exchanged for other goods or services) * Participatory economics (a decentralized economic planning system where the production and distribution of goods is guided by Participation (decision making), public participation ) * Post-scarcity economy (a hypothetical form where resources aren't scarce)


By ownership of the means of production

*
Capitalism Capitalism is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services within ...
(private ownership of the
means of production The means of production is a concept that encompasses the social use and ownership Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual prope ...
) *
Mixed economy A mixed economy is variously defined as an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of go ...
* Socialist economics, Socialist economy (
social ownership Social ownership is the appropriation of the surplus product Surplus product (german: Mehrprodukt, links=no) is an economic concept explicitly theorised by Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philoso ...
of the means of production)


By political ideologies

Various strains of anarchism and libertarianism advocate different economic systems, all of which have very small or no government involvement. These include: * Left-wing politics, Left-wing ** Anarcho-communism ** Anarcho-syndicalism ** Anarcho-socialism * Right-wing politics, Right-wing ** Anarcho-capitalism * Libertarianism ** Libertarian socialism ** Syndicalism


By other criteria

Corporatism refers to economic Tripartism, tripartite involving negotiations between business, labor and state interest groups to establish economic policy, or more generally to assigning people to political groups based on their occupational affiliation. Certain subsets of an economy, or the particular goods, services, techniques of production, or moral rules can also be described as an "economy". For example, some terms emphasize specific sectors or externalizes: * Circular economy * Collectivist economics, Collectivist economy * Digital economy * Green economy * Information economy * Internet economy * Knowledge economy * Natural economy * Virtual economy Others emphasize a particular religion: * Arthashastra – Hindu economics * Buddhist economics *
Distributism Distributism is an economic theory asserting that the world's productive assets should be widely owned rather than concentrated. Developed in the late 19th and early 20th centuries, distributism was based upon the principles of Catholic social ...
– Catholic ideal of a "third way" economy, featuring more distributed ownership in a mixed economy * Islamic economics The type of labour power: * Slavery, Slave – and Serfdom, serf -based economy * Wage labour -based economy Or the
means of production The means of production is a concept that encompasses the social use and ownership Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual prope ...
: * Agrarian economy * Industrial economy * Information economy


Evolutionary economics

Karl Marx's theory of economic development was based on the premise of evolving economic systems. Specifically, in his view over the course of history superior economic systems would replace inferior ones. Inferior systems were beset by internal contradictions and Inefficiency, inefficiencies that would make it impossible for them to survive long-term. In Marx's scheme, feudalism was replaced by
capitalism Capitalism is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services within ...
, which would eventually be superseded by
socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
.''Comparing Economic Systems in the Twenty-First Century'', 2003, by Gregory and Stuart. . Joseph Schumpeter had an evolutionary conception of economic development, but unlike Marx he de-emphasized the role of class struggle in contributing to qualitative change in the economic mode of production. In subsequent world history, many communist states run according to Marxism–Leninism, Marxist–Leninist ideologies arose during the 20th century, but by the 1990s they had either ceased to exist or gradually reformed their centrally planned economies toward Market economy, market-based economies, for example with perestroika and the dissolution of the Soviet Union, Chinese economic reform and Đổi Mới in Vietnam. Mainstream evolutionary economics continues to study economic change in modern times. There has also been renewed interest in understanding economic systems as evolutionary systems in the emerging field of complexity economics.


See also

*
Capitalism Capitalism is an economic system An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distribution of goods and services within ...
*
Communism Communism (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...

Communism
* Economic ideology * Economy * Factors of production * History of economic thought * Mode of production * Participatory economics * Political economy *
Socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
* Social relations of production * Socialist calculation debate * Base and superstructure, Superstructure


References


Further reading

* Richard Bonney (1995), ''Economic Systems and State Finance'', 680 pp. * David W. Conklin (1991), ''Comparative Economic Systems'', Cambridge University Press, 427 pp. * George Sylvester Counts (1970), ''Bolshevism, Fascism, and Capitalism: An Account of the Three Economic Systems''. * Robert L. Heilbroner and Peter J. Boettke (2007). "Economic Systems". ''The New Encyclopædia Britannica'', v. 17, pp. 908–915. * Harold Glenn Moulton, ''Financial Organization and the Economic System'', 515 pp. * Jacques Jacobus Polak (2003), ''An International Economic System'', 179 pp. * Frederic L. Pryor (1996), ''Economic Evolution and Structure: 384 pp. * Frederic L. Pryor (2005), ''Economic Systems of Foraging, Agricultural, and Industrial Societies'', 332 pp. * Graeme Snooks (1999), ''Global Transition: A General Theory'', PalgraveMacmillan, 395 pp.


External links


Economic system
at ''Encyclopædia Britannica'' entry.
"Social Studies VSC Glossary"



"Economic Systems"
a refereed journal for the analysis of market and non-market solution by Elsevier since 2001.

by WebEc, 2007. {{DEFAULTSORT:Economic System Economic systems, Political economy