Compare and contrast the different types of economic

systems in different regions of the world, Alan as lead

discussant.
Economic Systems

The definition of economic system is that it is a system of

production and exchange of goods and services as well as allocation
of resources in a society. It includes the combination of the various
institutions, agencies, entities (or even sectors as described by
some authors) and consumers that comprise the economic structure
of a given community. A related concept is the mode of production.
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.
The classification was based on the dominant method of resource
allocation (market vs. command) and the dominant form of resource
ownership (private vs. state). However, thanks to globalization,
economic systems are harder to categorize within a four-cell matrix.
So more robust criteria include the following: Type of economy, Type
of Government, Trade and capital flows, The commanding heights,
Services provided by the state and funded through taxes,
Institutions, Markets.

Market capitalism is system that individuals and firms allocate

resources and production resources are privately owned. The role of
the state in this system is to promote competition among firms and
to ensure consumer protection.
Market capitalism is practiced around the world, most notably in
Western Europe and North America. All market-oriented economies
do not function in an identical manner. The U.S. is characterized by
its competitive free-for-all and decentralized initiative. Japan is
sometimes called Japan, Inc. because it has a tightly run, highly
regulated economic system that is also market oriented.

Centrally Planned Socialism

Opposite of market capitalism
State holds broad powers to serve the public interest; decides
what goods and services are produced and in what quantities
Consumers can spend only what is available
Government owns entire industries and controls distribution
Demand typically exceeds supply
Little reliance on product differentiation, advertising, pricing
strategy
China, India, and the former USSR now moving towards some
market allocation and private ownership
This socialist ideology, developed by Marx, has been resoundingly
refuted. Examples: china, USSR, India.
In reality, market capitalism and centrally planned socialism do not
exist in pure form. An economic system in which command
resource allocation is utilized extensively in an overall environment
of private ownership can be called centrally planned capitalism.
Market socialism is also possible.
Centrally Planned Capitalism
Economic system in which command resource allocation is
used extensively in an environment of private resource
ownership
Example:
Swedish government controls 2/3s of all spending; a
hybrid of CPS and capitalism (Market Socialism)
Swedish government plans move towards privatization
In Sweden, where 2/3s of all expenditures are controlled by the
government, resource allocation is more command oriented than
market oriented. Swedens welfare state has a hybrid system

that has elements of both centrally planned socialism and

capitalism. Swedish govt ownership: TeliaSonera, telecom, 45%;
SAS airline, 21%; Vin & Spirit alcohol was 100% government owned
until it was sold to Frances Pernod Ricard in 2008.
China is also an example of state-directed socialism. But China has
given a significant freedom to business and individuals in the
Guangdong province to operate within a market system. Today
Chinas private sector accounts for about 70% of national output.
Even so, state companies still receive more than two-third of the
credit available from the countrys bank.
By contrast, Cuba stands as one of the last country taking command
allocation approach.
The Washington D.C. Heritage Foundation ranks countries by the
degree of economic freedom they support. There is a high
correlation between the degree of economic freedom and the extent
to which a nations mixed economy is heavily market oriented. A
number of key economic variables are considered: trade policy,
taxation policy, government consumption of economic output,
monetary policy, capital flows and foreign investment, banking
policy, wage and price controls, property rights, regulations, and the
black market. Among this ranking in 2013, Hong Kong and
Singapore are ranked first and second in terms of economic
freedom; Zimbabwe, Cuba, and North Korea are ranked lowest.