Download Mixed Economic System

Economic system is the particular way in which the economic activity in a country is
organized. It is the framework of how productive resources are allocated. The productive
resources in the word are limited but he demand on it is unlimited. Therefore, we have to
make choice and have some decision how the resources are allocate.
Capitalism is designed by Adam Smith. He believed a laissez-faire approach. It means
the business should run under the market economy because the demand and supply will
be balanced and self-regulated by the invisible hand of competition and the market-price
mechanism. Resources allocation is determined by their interaction of demand and supply
Socialism, in which government handles most of the economic planning, owns the
nation’s major economic resources and many of its basic industries and imposes heavy
tax to finance a welfare state. Most of the productive resources allocation is controlled by
the government.
Communism is the idea of Karl Marx. The citizens collectively own all of the country’s
productive resources. The government will order the business what to produce, how to
produce and hat price to product. It is an advanced socialism system and a form of
government control on resource allocation. They are planned economy.
Mixed economy is a blend of private enterprises, government ownership and government
planning. In this world, there is no purely capitalism, communism or socialism. All of the
economic system is mixed economic system. The resources allocation is effected by the
market. But the government ill have the optimum control.
The above economic system appears is because the resource allocation in the world is
uneven distribution. Profit-making is the man features of all types of buiness. To make
profit, the business revenue should larger then the expenses. It affected by the external
environed n the management. After that, the business can achieve maximum efficiency
and effectiveness and thus profit maximization. Property ownership, freedom of choice,
government intervention and fair competition are the factor which affect the business
investment incentive.
Property ownership included the right to buy, right to own, right to use, right to derive
income and right to sell. In capitalism and mixed economic system, the business has the
above right to do heir on business. However, in communism and socialism the
government will collect all of the right from the business to plan the further economic. In
socialism, the government will give back elite bit right to the sally business to earn profit.
Freedom of choice is the right to choose what to buy, what to sell, what to consme, what
to produce how to produce and what price to produce. Also, capitalism and mixed
economic system, the business has this in fright. Moreover, socialism only applies this
type of rights on small business, the major and the large business is not allowed to have it.
Communism is much poor. All of the business isn’t aloft have all rights. All right is
collected by the government.
The government intervention in communism is very high. The government will control
every movement in economic. So, they are called planned economy. On the other hand,
capitalism does not have any government intervention. All socialism only allows the
small business, so their government intervention is half of communism. Mixed economy
will have an optimum government intervention to the market.
Fair competition is not allowed in communism nod socialism. However, capitalism and
mixed economy have much competition because it can push down the price and improve
the quality of the goods and increase the business investment intervention.
After the competition, the most favorable economic system for business s mixed
economic system. It is because mixed economy has the property ownership and the right
to choice. Just ice Hong Kong people has their own property and freedom to choice.
Also, the government intervention only appears when the problem is vetted badly and we
can say the government intervention is optimum. It is more favorable than the communist
and socialism to the business. Furthermore, the government provides some of this portant
service just like the water supply and the medical service to the business. Also, the
electronic system and the stock market are highly protected by the government in Hong
Kong. This is a real example of advantages a mixed economic. The business will have
confident on the resource supply and the market; they don’t need to worry on it.
After the above comparison and the examples, the most favorable economic system for
the oration of business is mixed economic system. it have the property ownership,
freedom of choice, low government intervention, fair competition and it let huskiness to
eve profit-making.