Types of economic system table. Comparative characteristics of the main types of economic systems. Main types of systems
Any economic system must solve the following problems: what to produce; how to produce (what resources and technologies to use, what types of enterprises should prevail in
economics, what is the optimal size of firms, etc.); for whom to produce (the problem of distribution of the produced product between economic agents, the problem of income inequality, the structure of production, etc.). Traditional economic system Traditional economics is based on traditions passed on from generation to generation. These traditions determine what goods and services are produced, for whom, and how. The list of goods, production technology and distribution are based on the customs of a given country. The economic roles of members of society are determined by heredity and caste.
Characteristic features of traditional economies: Poor development of technology and production technologies; Large share of manual labor in all sectors of the economy; An insignificant role in the traditional economy of entrepreneurship, including small ones, with a constant increase in the scale of activity of large divisions; The predominance of traditions and customs in all aspects of society.
Market economic system
Main features of a capitalist economy: Private property, Freedom of entrepreneurial choice, Competition, Reliance on the market system, Limited role of the state. A market economy is characterized by private ownership of resources and the use of a system of markets and prices to coordinate and manage economic activity. What, how and for whom to produce is determined by the market through the mechanism of supply and demand. In such an economic system, the government does not interfere in the economy.
Its role is reduced to protecting private property and establishing laws that facilitate the functioning of free markets.
Command economic system
A command or centralized economy is the opposite of a market economy. It is based on state ownership of all material resources. Hence, all economic decisions are made by government bodies through centralized (directive planning).
Each enterprise's production plan provides for what and in what volume to produce, certain resources are allocated, thereby the state decides the question of how to produce, not only suppliers are indicated, but also buyers, that is, the question of for whom to produce is resolved. The means of production are distributed among industries on the basis of long-term priorities determined by the planning authority.
Mixed economic system
Today it is impossible to talk about the presence in a particular state of one of the three models in its pure form. Most modern developed countries have a mixed economy, combining elements of all three types.
A mixed economy involves the use of the regulatory role of the state and the economic freedom of producers. Entrepreneurs and workers move from industry to industry by their own decision, and not by government directives. The state, in turn, carries out antimonopoly, social, fiscal (tax) and other types of economic policies, which to one degree or another contribute to the economic growth of the country and improve the living standards of the population.
More on topic 8. Economic systems: Command, market, traditional, mixed:
- 1.1. Conceptual basis for the formation of models of economic behavior of business structures
- 1.3. Methodology and factors of preventive management in the system of ensuring economic security of business structures
- 48. Formation of a command and administrative system for managing the national economy
- 3.1. Objective conditions and contradictions of economic development
- Basic issues of economics and types of economic systems
- CONTENT OF THE STUDY DISCIPLINE “ECONOMIC THEORY” OF THE INTEGRATED MODULE “ECONOMICS”
- Basic concepts and categories of the course “Economic Theory”
- Questions for the exam in the discipline “Economic Theory” of the integrated module “Economics” for 1st year students
Let us choose two basic characteristics for classification:
1) who owns capital and land;
2) who makes decisions about the distribution of limited resources.
We are able to distinguish four main types of economic systems:
1) traditional;
2) command (socialism);
3) market (capitalism);
4) mixed.
The oldest economic system is traditional.
A traditional economic system is a way of organizing economic life in which land and capital are in the common possession of a tribe (community) or are inherited within the family, and limited resources are distributed in accordance with long-standing traditions.
Remnants of such a structure of economic life can still be found today among tribes living in remote corners of the planet (for example, among the peoples of the Far North of Russia). This economic system is distinguished by the lowest return from the use of limited economic resources and therefore provides the people living in accordance with it with a very low level of well-being, and often with low life expectancy. Let us recall that even in Europe, before the mass transition from the traditional economic system to the capitalist system, the average life expectancy was about 30 years, and this was not only due to frequent wars:
Primitive technologies
In-kind exchange (barter)
Low labor productivity
Poverty from generation to generation
How did changing economic systems affect the world's population?
For many millennia, the increase in the Earth's population has been extremely slow; according to rough estimates, by the end of the Neolithic era (2 thousand years BC) it was only 50 million.
After 2 thousand years, at the beginning of our era, there were already about 230 million people on Earth. In the 1st millennium AD. further growth in the number of people for the first time came into conflict with the low level of development of the productive forces. Population growth has slowed again - over a thousand years it has increased by only 20%. By the year 1000, only 275 million people lived on Earth.
Over the next five centuries (by 1500), the world's population increased by less than 2 times - to 450 million.
In the era of the emergence of a new economic system - capitalism, the population growth rate became higher than in previous eras. It especially increased in the 19th century. - in the era of the heyday of capitalism. If the population of the Earth in 1650 was 550 million people (an increase of 22% over 150 years), then by 1800 it was 906 million (an increase of 65% over the same period), by 1850 it reached 1170 million, and by 1900 exceeded 1.5 billion (1617 million).
The markedly higher rate of world population growth is due to the continuous decline in mortality. The mortality rate is closely related to the level of socio-economic development of a country, the financial situation of the population and the state of the healthcare system. The process of reducing mortality first began in Europe, which was ahead of other parts of the world in development.
If in modern industrial societies with capitalist and mixed economic systems the average life expectancy is about 70-75 years, then in the Middle Ages it in no way exceeded 30 years. Guillaume de Saint-Patu, listing the witnesses at the process of canonization of Saint Louis, calls the 40-year-old man “a man of mature age,” and the 50-year-old “a man of advanced years.”
Over time, the traditional one was replaced by a market system (capitalism). This system is based on the following:
1) the right of private property;
2) private economic initiative;
3) market organization of distribution of limited resources of society.
Market system (capitalism)- a way of organizing economic life in which capital and land are owned by individuals who make all economic decisions, and limited resources are distributed through various types of markets.
The first of the foundations of the market system is the right of private property. This is the name of the right of an individual recognized and protected by law:
own;
use;
dispose of a certain type and volume of limited resources (for example, a plot of land, a coal deposit or a factory), and therefore receive income from it.
The government only ensures compliance with economic legislation
Private ownership of capital
Markets set prices and distribute resources and goods
The ability for an individual to own a type of productive resource such as capital and to receive income with it determined another commonly used name for this economic system - capitalism.
At first, the right of private property was protected only by force of arms, and the owners were only kings and feudal lords. But then, having gone through a long path of wars and revolutions, humanity created a civilization that allows every citizen to become a private owner.
The second basis of the market system is private economic initiative. This means the right of each owner of production resources to independently decide how to use them to generate income.
The third basis of the market system (capitalism) is the markets themselves, i.e. organized activity for the exchange of goods in a certain way.
Markets perform the following functions:
determine the degree of success of a particular business initiative;
ultimately form the amount of income that property brings to its owners;
Ensure the distribution of limited resources between alternative areas of their use.
In a market economic system, everyone's well-being is determined by how successfully he can sell on the market the goods he owns: his labor force, skills, handicrafts, his own land plot or the ability to organize commercial transactions. And ideally, the one who offers customers a product of better quality and on more favorable terms turns out to be the winner in the struggle for customers’ money and opens the way to increased prosperity.
This organization of economic life, turning out to be most consistent with the psychology of people, ensured a sharp acceleration of economic progress. At the same time, it created large differences in the level of well-being between those who had private property and those who did not. This model of the economic system also revealed other serious shortcomings, which we will discuss later. And they gave rise to criticism and, accordingly, attempts to create a different model of the economic system, devoid of the defects of pure capitalism, but preserving its main advantages.
The result of attempts to construct an alternative economic system, as well as to practically implement the corresponding scientific theories, was a command system, more often called socialism (from the Latin socialis - public).
The command system (socialism) is a way of organizing economic life in which capital and land are actually owned by the state, which distributes all limited resources.
The birth of this economic system was a consequence of a series of socialist revolutions at the beginning of the 20th century, primarily in Russia. Their ideological banner was a theory called Marxism-Leninism. It was developed by German politicians K. Marx and F. Engels, and implemented in practice in our country by the leaders of the Communist Party V.I. Lenin and I.V. Stalin.
In accordance with this theory, humanity could sharply accelerate its path to heights of prosperity and eliminate differences in the individual well-being of citizens through, firstly, the elimination of private property, the transfer of all productive resources into the common ownership of all citizens of the country and, secondly, the management of all economic activity of the country on the basis of a single universally binding plan, which is developed by top management on a scientific basis.
The roots of this theory go back to the Middle Ages, to social utopias, but its practical implementation occurred precisely in the 20th century, when the so-called socialist camp arose and then collapsed.
During the heyday of socialism (1950-1980s), more than a third of the world's population lived in the countries of the socialist camp. So this is perhaps the largest economic experiment in human history. An experiment that ended in failure, despite the enormous sacrifices of several generations of the inhabitants of these countries. Thus, collectivization alone - the transition to planned, socialist methods of organizing agriculture - claimed from 1.8 million to 2.1 million peasant lives during the period from 1930 to 1940, according to the now published data of the Federal Security Service of the Russian Federation.
At the same time, the very fact of socialist revolutions, as well as other events that have taken place in the world of economics over the past two centuries, have shown that a purely market system (classical capitalism) is imperfect. And therefore the XX century. became the period of birth of a new version of the market economic system (capitalism) - a mixed economic system (social market economy).
A mixed economic system is a way of organizing economic life in which land and capital are privately owned, and the distribution of limited resources is carried out by markets with significant government participation.
The mixed system retains as its basis all the elements of the market system (capitalism), but adds to them a sharp expansion of the scope of intervention in economic life by the state, using, among others, command methods of management. This means that in a mixed economic system the state takes upon itself the solution of those problems that markets either cannot solve at all or do not solve in the best way.
At the same time, the bulk of goods and services are still sold through free markets, and the state is not trying to force all sellers and buyers to act on the basis of a generally binding plan or set prices for all goods and services (Figure 3.3).
In the modern world, a number of countries in Asia, Africa and Latin America are closest to a purely market system (classical capitalism). The command system (socialism) is still the basis of life in Cuba and North Korea, and the mixed economic system (in its various modifications) is characteristic of countries such as the USA, Japan, Great Britain, Sweden, and the Netherlands.
The collapse of the socialist camp in the late 1980s - early 1990s. and the transition of the peoples of these countries to the reconstruction of destroyed market mechanisms became evidence of the historical victory of the market (or rather, mixed) system over the planned-command system. Moreover, this victory was achieved peacefully, as a result of the loss of economic competition by socialist countries (with a planned system) with countries where a mixed economic system was created.
Why did socialism, with its command economic system, so cruelly deceive the expectations of many peoples?
The fact is that it is no coincidence that the command system begins with the destruction of private property. The state can command the use of economic resources only if the law does not protect the right of the private owner to independently dispose of what belongs to him.
But if no one owns anything, if all resources (factors of production) are declared to be the property of the whole people, but in reality they are completely controlled by state and party officials, then this is fraught with very dangerous economic consequences. The income of people and firms ceases to depend on how well they use limited resources and how much the result of their work is really needed by society. This leads to irrational, incompetent use of limited resources and, as a result, a slowdown in the growth rate of people's well-being.
Without the socialist experiment, the Russian Federation and other former Soviet republics and Eastern European countries today would not be transitional economies, but rather highly developed states. The command system in them has in many ways already been destroyed, but in its place neither a purely market nor an effectively working mixed economic system has yet emerged.
The movement of the economic systems of Russia and Eastern European countries towards a mixed economic system is due to the fact that the market mechanisms underlying this system create the best opportunities known to mankind (although not absolutely ideal) for a more rational use of limited resources. After all, the law of the market is simple: you can get the goods you need only by offering in exchange to the owners of these goods something created by you and desired by them.
In other words, the market forces everyone to think about the interests of others: otherwise, his product may turn out to be unnecessary, and instead of benefits, only losses will result. Every day, both sellers and buyers are looking for the most optimal compromise between their interests. Based on this compromise, market prices are born.
Unfortunately, the market as a mechanism for distributing limited resources in the production of economic goods is also not flawless - it does not provide an ideal solution to all problems. That is why all over the world there is a constant search for ways to improve market mechanisms. Even in those countries that avoided socialist revolutions and subsequent experiments with planning, market processes at the beginning of the 21st century. very different from the methods of management at the beginning of the 20th century.
No matter how ordered or regulated by the state economic life in the developed countries of the world, its basis remains the same three elements:
1) private property;
2) private initiative;
3) market distribution of limited resources.
It is in markets that the correctness of the economic decisions of producers of goods and their right to receive profit as a reward for their efforts are verified. The mechanism for forming such an assessment is a comparison of the costs of producing goods and the market prices at which these goods can actually be sold.
But how are these prices formed? To find the answer to this question, we need to become familiar with the two forces that shape market prices: supply and demand.
The economic system represents a special mechanism created to solve the two-sided problems of rarity and release. Since economic resources are limited compared to society's needs for goods and services, certain ways of allocating them between alternative uses are necessary.
Economic system- an ordered set of socio-economic and organizational relations between producers and consumers of goods and services.
The identification of economic systems may be based on various criteria:
The economic state of society at a certain stage of development (Russia during the era of Peter I, Nazi Germany);
- stages of socio-economic development (socio-economic formations in Marxism);
- economic systems characterized by three groups of elements: spirit (the main motives of economic activity), structure and substance in the German historical school;
Types of organization associated with ways of coordinating the actions of economic entities in ordoliberalism;
A socio-economic system based on two characteristics: the form of ownership of economic resources and the method of coordinating economic activities.
In modern scientific and educational literature, classification according to the last of the identified criteria is most widespread. Based on this, traditional, command, market and mixed economies are distinguished.
Traditional economics based on the dominance of traditions and customs in economic activity. Technical, scientific and social development in such countries is very limited, because it comes into conflict with the economic structure, religious and cultural values. This economic model was characteristic of ancient and medieval society, but persists in modern underdeveloped states.
Command economy due to the fact that most enterprises are state owned. They carry out their activities on the basis of state directives; all decisions on the production, distribution, exchange and consumption of material goods and services in society are made by the state. This includes the USSR, Albania, etc.
Market economy determined by private ownership of resources, the use of a system of markets and prices to coordinate and manage economic activity. In a free market economy, the state does not play any role in the distribution of resources; all decisions are made by market entities independently, at their own peril and risk. Hong Kong was usually included here.
In today's real life there are no examples of a purely command or purely market economy, completely free from the state. Most countries strive to organically and flexibly combine market efficiency with government regulation of the economy. Such an association forms a mixed economy.
Mixed economy represents an economic system where both the state and the private sector play an important role in the production, distribution, exchange and consumption of all resources and material goods in the country. At the same time, the regulatory role of the market is complemented by the mechanism of state regulation, and private property coexists with public-state property. The mixed economy arose in the interwar period and to this day represents the most effective form of management. There are five main problems solved by a mixed economy:
q provision of employment;
q full use of production capacity;
q price stabilization;
q parallel growth of wages and labor productivity;
q balance of payments equilibrium.
Their achievement was carried out by states in different periods in different ways, taking into account mutual experience. Conventionally, three models of a mixed economy can be distinguished.
Neostatist(France, England, Italy, Japan) is characterized by a developed nationalized sector, active countercyclical and structural policies carried out in accordance with indicative plans, and a developed system of transfer payments.
Neoliberal model(Germany, USA) also involves counter-cyclical measures, but the main emphasis is on the state providing conditions for the normal functioning of the market. It is considered as the most effective regulatory system. The government essentially intervenes only to protect competition.
At the core models of concerted action(Sweden, Holland, Austria, Belgium) is based on the principle of consent of representatives of social parties (government, trade unions, employers). Through special taxes on investments, the government prevents the “overheating” of the economy and regulates the labor market. Special laws affect the relationship between wage growth and labor productivity, and progressive taxation helps equalize income. In the countries of this model, a powerful social security system has been created and an active structural policy is being pursued.
Currently, Russia has an eclectic economic system consisting of elements of an administrative-command system, a market economy of free competition and a modern market system. In the former Soviet Asian republics, elements of the traditional system are also added to this conglomerate. Therefore, it is quite arbitrary to call the property relations and organizational forms existing in our country an economic system (even an eclectic one). An important feature of the system is missing - its relative stability. After all, in domestic economic life everything is in motion and has a transitional character. This transition, apparently, stretches over decades, and from this point of view, a transition economy can also be called a system.
Transition economy- an economy that is in a state of change, transition from one state to another, both within one type of economy and from one type of economy to another, occupies a special place in the development of society.
It should be distinguished from a transition economy transition period in the development of society, during which there is a change from one type of economic relations to another.
For the transition economies of the countries of the former “socialist camp” today there is a wide range of prospects: from degradation to a dependent, increasingly lagging economic system of developing countries to transformation into new industrial states; from economies like the Chinese that retain “socialist” attributes and are based on public property to right-wing liberal systems based on private property that began with the implementation of the principles of “shock therapy.” At the same time, three fundamental trends intersect in the transition economy of each country. The first of them is the gradual dying (both natural and artificial) of “mutant socialism”, which received its name in comparison not with a theoretical ideal, but with a real trend of socialization existing in world practice. The second trend is associated with the genesis of the relations of the post-classical world capitalist economy (modern market economy based on private-corporate property). The third trend is the strengthening of the process of socialization - the increasing role of public (group, national and international) values in economic development and the humanization of public life as a prerequisite for any modern transformations. It is obvious that in such conditions the final choice of the economic system in Russia will ultimately depend on the balance of political forces in the country, the nature of the ongoing reforms, the scale and effectiveness of the ongoing reforms in all spheres of public life, as well as on the adaptation of society to changes.
To summarize, we note that economic systems are multidimensional. They can be formalized: ES = f (A 1, A 2, A 3 ... An). In other words, the economic system (ES) is determined by its properties (A), where there are n such properties. This means that an economic system cannot be defined in terms of a single characteristic.
Types of economic systems - classification of economic organization according to a number of characteristics: forms of ownership, methods of distribution of material goods, methods of managing economic activity and others. The typology depends on the school of economics that the theorist adheres to.
Leading modern economists identify two main characteristics on the basis of which economic systems are classified. The first sign is the form of ownership of production assets, which include business enterprises. In a particular economic system, the means of production can be state or privately owned. Also, private and public enterprises can operate simultaneously in the economic system.
The second feature is approaches to managing economic activity. They distinguish the planned approach, in which the production and distribution of material goods is completely controlled by the state. There is also a market approach. It assumes the free distribution of labor results based on competition. Finally, there is a mixed approach. It assumes the simultaneous existence of state planning and free competition between participants in the economic system.
Economic systems are also classified according to the technological state of the economy. On this basis, pre-industrial, industrial and post-industrial systems are distinguished.
Main types of economic systems
The main types of economic systems include traditional, planned, market and mixed. Let us consider the characteristics of the systems in more detail.
Traditional economic system
From a historical perspective, this is the first economic structure that has formal characteristics of an economic system. It dates back to the pre-industrial period of development of economic activity.
Traditional economic systems arose before states. In most cases, the means of production were owned by communities and tribes. This is due to the inability of one or several people to independently maintain the means of obtaining material wealth, which included territories: agricultural lands, hunting grounds, and reservoirs.
Representative of the Waorani tribe. The people living in Ecuador have preserved the ways of the traditional economic system
Management of economic activity in traditional systems can be called planned and situational at the same time. Decisions on certain economic activities were made by the strongest members of the community, elders, and leaders.
Currently, traditional economic systems are found among residents of third world countries: Africa, South America, Southeast Asia.
Planned economic system
This economic system is characterized by state control of the means of production. This applies to both natural resources and human-built enterprises. At the same time, individuals can own personal means of production and tools.
The planned system involves the formal administration of economic activity. In practice, it is carried out through calculations of planned performance indicators of the economy as a whole, as well as industries and enterprises in particular.
The advantages of a planned economic system include:
The ability to quickly regulate the activities of industries and enterprises. This is especially important in force majeure conditions, for example, during wars and economic crises. Also, operational management of the economy gives positive results during periods of recovery growth.
Fair distribution of material wealth. This advantage applies to ideal planned systems, but in practice it was not possible to fully realize it.
The planned economic system worked in the Soviet Union. It provided double-digit economic growth in the pre-war period, as well as the reconstruction of infrastructure and industry after the war.
Construction of the White Sea-Baltic Canal in the USSR
A planned economy has a number of disadvantages. These include the lack of competition, the lack of balance between the creation of means of production and consumer goods, and possible errors in planning economic activity.
Modern economists consider a planned economy useful at certain stages of development of states and regions. These include the period of formation of a country or a commonwealth of countries, times of deep economic crises, periods of wars and post-war periods. Scientists believe that within several decades after the creation of a state or the end of wars and crises, the economic model should gradually change from planned to mixed or market.
Market economic system
A market economic system can be called the antipode of a planned one. In such systems, the means of production are privately owned. Economic regulation is carried out through competition. Manufacturers of quality goods and services make profits and increase production, displacing inefficient enterprises from the market.
The state actually reserves the role of night watchman. It guarantees the inviolability of private property and monitors compliance with laws by all participants in economic relations.
The advantages of a market economic system include:
Stimulating entrepreneurship both at the level of enterprises and at the level of individuals.
Self-regulation of industries and the economy as a whole.
Displacement of economically unprofitable approaches to work, products, and enterprises from the market.
The disadvantages of the market system include social injustice. The free market creates conditions for the implementation of social Darwinist processes. They contribute to the success and enrichment of the fittest individuals and businesses. And unadapted people and companies are doomed to poverty and lack of livelihood.
Artistic depiction of the social inequalities that exist under a market economic system
In its pure form, a market economic system exists only in theory. The economies of some Western countries, for example, the United States, are closest to it. But even in this country, considered an apologist for the market, the state owns a large number of enterprises, actively intervenes in economic processes and participates in the distribution of material goods.
Theoretically, the market model is considered ideal for prosperous countries during periods of sustainable economic growth. In such conditions, it should stimulate innovation and contribute to further economic growth.
Mixed economic system
This is the most common market model today. It operates in most countries of the world, including the USA, China, Russia, and European countries.
A mixed system of economic activity assumes that the means of production are both privately and publicly owned. At the same time, state-owned enterprises do not receive any preferences at the legislative level, but compete on a general basis with private ones.
Regulation of economic processes is carried out through competition. The state plays the role of a night watchman, as in the market model. At the same time, government agencies are actively involved in the activities of industries critical to the country. This could be the mining industry, the military-industrial complex, or innovative sectors of the economy. The mixed model is characterized by the state’s desire to actively redistribute material values to achieve social justice.
The purposeful transition to a mixed model is lobbied by supporters of center-left ideology: socialists and social democrats. For example, these include the Labor Party in Great Britain.
An example of an attempt to consciously build a mixed system is the Scandinavian economic model. In some Nordic countries, including Sweden and Denmark, leaders implemented a welfare state while maintaining capitalism and market competition. Currently, these countries are considered one of the most socially oriented in the world. However, businesses there are forced to pay high taxes.
The transition from a planned to a mixed economy in the post-Soviet space was painful. The photo shows a rally in the 90s
To be fair, it is worth noting that the social model of development in the Scandinavian countries is possible thanks to the extraction and export of raw materials.
In most other countries of the world, authorities came to a mixed economic model by accident or situationally. For example, in the United States, the country's leadership was forced to intervene in the economy and nationalize large banking institutions due to the global financial crisis.
Which economic model is the best?
Humanity has not yet come up with an ideal economic model. All other business management systems have objective advantages and disadvantages. They arise at certain stages of development of society and the state and replace each other.
The currently dominant mixed model can be considered optimal at the current stage of development of society and the state. But in the event of a deep economic crisis, the probability of which is assessed very high, it may be replaced by a planned economy. With its help, states will maintain an acceptable standard of living and social security for citizens.
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2.1. Economic system. Types of economic systems
Economic system- this is the organization of the economic life of society, based on a certain structure of relationships between economic agents.
The type of economic system depends on the prevailing economic goals in society, forms of ownership and methods of solving economic problems.
As C.R. McConnell and S.L. Brew note in Economics, “... the industrialized countries of the world differ mainly in two ways: 1) in the form of ownership of the means of production; 2) in the manner by which they coordinate and economic activity is managed" (Campbell R. McConnell, Stanley L. Brew. Economics. M.: 1992. - P. 47). There are two ways to coordinate economic elections: spontaneous and hierarchical. The spontaneous method assumes that each company and household independently decides what, how and for whom to produce. The hierarchical order identifies an economic entity that answers the fundamental questions of the economy single-handedly for all other economic agents.
Economists distinguish four types of economic systems: traditional, market, command and mixed. Each system answers fundamental economic questions in its own way.
Traditional economics - this economic system is based on compliance with historically established customs, canons of religion, traditions that determine technology and means of production, exchange, distribution and consumption of economic goods. The role of economic agents in the economic system is largely determined by heredity and continuity of economic relations, as well as the division of society into classes. Economic problems - what to produce, how to produce and for whom to produce - are determined mainly by centuries-old traditions. Customs determine the order in which resources and products are distributed, exchanged, and consumed. The introduction of new techniques and technologies is carried out very slowly, as it conflicts with customs and traditions, threatening their preservation, and therefore the stability of the existing social order. Currently, this economic system operates with elements of a market economy in approximately 140 countries in Asia, Africa and Latin America.
The main features of the traditional system are (Balikoev V.Z., Kovalev V.A., Semenikhina V.A. Course of general economic theory: Textbook. Novosibirsk University NGAS. Novosibirsk, 1993. - P. 37):
1. The predominance of private ownership.
2. Production, distribution and exchange are based on customs, traditions and religious rites. Religious, caste and cultural values are primary in relation to new forms of economic activity.
3. The economic role of households is determined by heredity and caste.
4. Technical progress is sharply limited, as it poses a threat to the foundations of traditional society. As a result, economic growth rates are insignificant. Moreover, the population growth rate exceeds the growth rate of industrial production.
5. Illiteracy of the population, high unemployment and low labor productivity.
6. Huge external debt of the state, which is difficult to eliminate.
7. The large role of the state and security forces (army, police) in the economy and politics of these countries.
Market economy This is an economic system based on spontaneous coordination of economic elections. This type of economic system is characterized by free enterprise, pricing based on the interaction of supply and demand, and the predominance of private property. The market system answers the fundamental questions of economics in the following way. Firms produce those goods and services that are in demand. Products are produced using technology that can minimize costs. Goods and services are produced by those economic agents that have advantages in the production of a given product. Advantages mean the ability to minimize costs. And finally, goods are produced for those who have sufficient income. People without income find themselves outside the process of consuming goods. In a market economy, there is a private form of ownership of resources and final goods and services.
In a market economy, the state does not interfere in economic relations and does not influence the behavior of agents regarding the production, distribution and consumption of goods.
Command economy - uh economic system, the main role in regulating which is played by the state. In this system, the state determines what products should be produced and in what quantities, for whom to produce them, and how to produce them. Why is the state assigned the role of the main regulator in the economy? Because in this economic system, state ownership of all basic means of production predominates, that is, the bulk of economic resources are owned by the entire population living in the country. On behalf of the population, the state manages the distribution of all basic economic resources, as well as their use.
Due to little or no private ownership of the means of production, there is no market in a command economy. It is being replaced by centralized planning, distribution and supply. However, there are elements of the market here. Produced products are considered goods, but prices for them are set by the state. There is a network of trade institutions that act as intermediaries between sellers (state or cooperative enterprises) and buyers (enterprises, institutions or the public).
The advantages of a command economy are:
1) minimum uncertainty in changes in the economic situation in the near future, relatively stable economic development;
2) the possibility of setting social goals for the economy and achieving them;
3) the absence of sharp differences in the income levels of the population between its various groups, which contributes to a more even development of all layers of society;
4) the ability to maintain a stable level of employment.
But, like any economic system, a command economy has its drawbacks:
1) lack of freedom of choice of goods (in particular, means of production) for sellers and buyers - everything is planned and distributed in advance;
2) the need to create a large, complex bureaucratic structure of economic management, which often interferes with the rapid adoption of operational decisions;
3) subjectivity in economic management, which leads to imbalance and disproportionate development of industries;
4) alienation of owners (population) from property (means of production) and lack of competition (competition), which leads to lack of initiative among workers and insufficient incentives for more efficient use of economic resources; as a result - underutilization of the achievements of scientific and technological progress, decreased efficiency, and stagnation in the economy.
An example of a command economy is the economic system in the former Soviet Union and in countries of the socialist direction of development.
Comparing a market economy with a command-administrative economy, we can identify two main differences, which are presented in table. 2.1.
Table 2.1.
Characteristics of market and command economics
systems according to two main characteristics
Mixed economy is a type of economic system based on a market pricing mechanism, but including government intervention in economic relationships.
In modern conditions, a combination of two types of economic systems - market and command - is increasingly finding place. This allows you to use the advantages of these systems and, to some extent, neutralize their disadvantages. There are countries in which the market regulatory mechanism predominates, and state ownership, as well as state intervention in the economy, play a less significant role. These include the USA and many Western European countries.
But there are also countries where the state is actively involved in managing the economy in a market environment, setting certain development goals and using various management methods. Among these countries, two main models of a mixed economic system can be distinguished. One of these models reflects the economic system of Japan, which achieved high rates of development in the post-war period. Another model is the Swedish economic system, whose goals are dominated by social goals.
Table 2.2.
Main features of the Japanese and Swedish economic models
An economic system in which social goals (free healthcare, education, preservation and development of culture, equalization of income levels between segments of the population, etc.) is becoming increasingly important is called a socially oriented economy.
In Russia, since the early 90s, there has been a transition from a command economy to a mixed one. The concept of transition includes three stages: creating the prerequisites for market relations; creating conditions for the formation of market infrastructure and creating conditions for the functioning of the market mechanism.
The prerequisites for market relations include:
Prompt creation of a legal framework for a market economy;
Privatization is the denationalization of a significant part of the means of production, leading to the emergence of private owners, the development of entrepreneurship and competition;
Pricing liberalization is a transition from rigid government prices to free market prices.
The conditions for market formation are:
Gradual removal of government bodies from direct participation in the economic activities of enterprises;
An integrated triune approach to the formation of the main types of markets - commodity, financial and labor markets;
Active formation and development of market infrastructure
Creation of a network of commercial banks, commodity and stock exchanges, investment funds, insurance companies, arbitration institutions, etc.
Gradual opening of the national economy and integration (entry) into the system of world economic relations;
Ensuring social security of citizens by the state.
The conditions for the functioning of the market should be:
Freedom of activity of economic organizations (economic agents) within the framework of state laws regulating the relationships between entities;
Full responsibility of entrepreneurs for the results of their activities;
Freedom of competition, where it is effective;
Freedom of pricing, limited for monopoly markets.
Analyzing mixed economy models, we can distinguish three main groups of economic functions of the state: maintaining economic efficiency, maintaining development stability, and ensuring social justice.
In its difficult history, humanity has already had the opportunity to “survive” quite a lot of different economic systems. This gives grounds to raise the question of their classification. Classification in science is always a difficult matter. Its success and scientific validity largely depend on the correctly selected “key”. This “key” is the separation criterion, i.e. its main feature, the “touchstone” or measure. The scientific nature of the classification depends on the correct identification of the criterion (or criteria).
In modern economics, different criteria are used when considering types of economic systems. The main ones are the following:
the dominant form of management; main forms of ownership; way of coordinating economic entities and actions; method of income distribution; type of government intervention in the economy; inclusion of the economy in world economic relations.
Since there are many criteria, and this means there are many criterion approaches to classification, there will be several classifications themselves.
Let's look at them in the following order.
The first classification connects the identification of types of economic systems with the dominant form of management. With this approach, the following are distinguished: an economic system with a natural form of management; economic system with a commodity form of management. According to another criterion - “main form of ownership” - economic systems differ: communal type; private type; cooperative-public type; mixed. According to the criterion “mechanism (method) for coordinating the actions of economic entities,” the following types of economic systems can be distinguished: traditional; market; planned. “The prevailing method of income distribution” as a criterion approach to economic systems allows us to distinguish the following types: communal-equalitarian; with the distribution of income by land; with the distribution of income by factors of production (land, capital, labor); with distribution according to quantity, quality and efficiency of labor contribution. “The border and type of government intervention in the economy” as a criterion divides economic systems into the following types: free, liberal; administrative-command; economically regulated; mixed. According to the criterion of “the degree of inclusion in world economic ties and relations,” economic systems are distinguished as: closed; open. Finally, according to the criterion of the degree of maturity, economic systems can be distinguished as: emerging; mature, developed; degrading.
In modern economic literature of the West, especially in popular textbooks, for example by K.R. McConnell and S.L. Brew, the classification comes down to the distinction of three main types of economic systems:
1) traditional economic system;
2) market economy;
3) command economy.
A traditional economic system is usually understood as an economy based on traditions and customs, fixed in the economic consciousness of people based on the experience of generations. This is, as a rule, a subsistence economy that serves itself at the expense of its own resources and forces, and has a closed nature.
The market type of economy is interpreted as an economic system in which, on the basis of private property, the movement of production resources and production itself is carried out under the influence of a market regulation mechanism based on fluctuations in demand, supply and prices, as well as on economic benefits.
A planned (command) economy is defined as a type in which public ownership dominates, commodity-money relations are formal, and the movement of production resources and production itself is determined by the administrative center on the basis of a system of plans and commands.
It should be noted that this classification, although it is the most common in modern literature, has certain scientific limitations. Firstly, because it is based on various, multi-system criteria of the typology of economic systems. Thus, the traditional and market types are distinguished on the basis of the criterion “mechanism for coordinating the actions of economic entities” (either traditions or market forces), and when identifying the third type - “planned (command) economy” - a different criterion approach is used - from the standpoint of degree and way of government intervention in the economy. Secondly, the property criterion is also used inconsistently: in two types - market and command - it plays a certain role in the typology (private and public property are contrasted), and in the characteristics of the traditional type of economy it is completely absent. Even such logical defects of this typology limit its scientific significance.
Overcoming to some extent the limitations of this classification, modern economic thought identifies another type of economy - a mixed economy. It is characterized by the stable presence of elements of different types of economic systems. This type of economy represents a number of modern Western European countries. This type has objective prerequisites. Thus, the market mechanism alone in modern life does not provide effective and sustainable self-regulation of the economic system, but leads to a certain deregulation of the economy (crises, unemployment, inflation). The solution is found in a certain integration of regulatory mechanisms - market and state. In this regard, the economic system also becomes mixed.
The main difference between a mixed type of economy is its diversity. The main features of this type are:
a combination of private and public sectors of the economy; a combination of market and government regulatory mechanisms; a combination of private market motivation with the motivation of social sustainability in society.
A mixed economy can be considered a special type of economic system. This is due to its integrity, stability, ability to self-renew, and a certain compatibility of system components. And these are all properties inherent in any type of economic system. But in reality we have to distinguish between the mixed economy of developed countries and the mixed economy of developing countries. These are types of mixed economy.
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