Definition economic system covers the total range of methods by which organized farm and economic processes of a particular society: the use of natural resources of the territory, the creation of any material goods, distribution and consumption of the finished product and so on.The oldest type of management in the history of man is the traditional system.Its beginning goes back to the Neolithic revolution, when they were created the first agricultural and pastoral civilization.The traditional system of management had no alternative to itself until the XV - XVI centuries.During this period there have been significant transformation in all spheres of public life, bringing born and formed a completely new types of economic systems.The market was the first among them, and as shown practice, the most viable.It has gained popularity in many parts of the world.
Signs of market economic system
As already noted, this type of farming arose in Europe during modern times.It is a consequence of the evolution and transformation of the later feudal relations, extensive geographic discoveries of the period of primitive accumulation of capital (that is, the appearance on the European markets huge amount of silver and gold, which were plundered in the colonies) and, of course, the industrial revolution.In fact, the most important features of the market
economic system are the result of its decentralized nature.For a long time a very serious competitive alternative to Western markets was planned command economy (in practice realized in the Nazi system, and later - in the socialist).A distinctive feature of the latter was that all its elements are strictly subordinated to the needs of the public and all economic issues were considered the exclusive competence of the state.In contrast to this state of affairs signs of market economic system meant multistructural forms of ownership of material goods, capital goods and other: private, public, collective, and, of course, the state.In such circumstances, the government only acts as a guarantor of equal opportunities and standards prescribed in the Constitution, but it does not make a direct intervention in economic processes and has no direct impact on this area of public life.
negative signs of the market economic system
should also be noted that in this type of farming is not all and not always successfully.The first modern market economic system characterized by weak social protection, often deplorable situation of those populations that are not market-oriented.In addition, the result of free competition, in addition to reviving economic relations are often such processes as a result of which the winners of the competition itself are sufficiently powerful to intervene in social and political life of the country.It should be noted that many of today's progressive states (USA, European countries) have chosen the so-called mixed economic system in which the government on the one hand encourage the free market, on the other hand still retain the effective ways to impact on the economy at the first sign of crisis.In addition, mixed farming provides an opportunity to develop a serious social base, as it has successfully demonstrated, for example, the Scandinavian countries.
