concept of economic system covers the whole range of methods that organize economic and business processes of a particular society: wealth creation, the use of mineral natural resources, distribution and consumption of the final product and so on.The most ancient type of management in human history is the so-called traditional systems.It emerged from the Neolithic revolution, when the first cattle and agricultural civilizations, and had no alternative until the emergence and development of capitalism in Europe, starting with the XV-XVI centuries.A characteristic feature of the traditional economic system is a high taboo society and its commitment to tradition.It identifies the main considerations of the tradition of the questions: what, what to produce and how to distribute later.This is accompanied by a business entity archaic technology, the use of manual labor, the weak development of commodity-money relations (or even lack thereof).Today, such examples can be seen in the underdeveloped countries of the world.
characteristic features of a market economy
As already mentioned, this type of farming arose in Europe in modern times.It is the result of the evolution of feudalism, the great geographical discoveries, the so-called primitive accumulation of capital (the emergence in Europe of a large quantity of silver and gold, looted in the colonies) and, of course, the scientific and technological revolution.In fact, the most important features of a market economy are the result of its decentralization.For a long time a serious rival alternative to the free market of the West was a command-planned economy (implemented in fascist states, and later - in the socialist).Its distinguishing feature was that all economic issues were dealt with by the central government were strictly subordinated to the needs of the public.All the elements of the financial system and production (banks, factories, mills) were subject to nationalization.In contrast to such a feature-shuffling of the market economy is a multi-structural forms of ownership (private, collective, public, and, of course, the public sector is also present).Government in such circumstances acts as a guarantor of the constitutional norms and equal opportunities, but does not intervene directly in the economic life of the country and has no direct impact on the number of processes.
negative aspects of
should be noted that there are negative features of a market economy.These include weak social protection, the deplorable situation of the population who are not focused on the market (academics, teachers).The result of free competition, in addition to reviving economic life of society and quality of life, is the fact that over time, the winners of this competition are powerful enough to interfere with the political and social life of the country.Large-scale crises and depressions of the Western world in the XX century are fully opened and the negative features of a market economy.For this reason all progressive modern states today are so-called mixed type of economy in which the government and even encourage a free market, but still retain significant leverage on the economy, as well as take care of the social guarantees in the country.
