The economic system is the totality of all economic processes that take place in society. They are determined by the economic mechanism. Any economic system is built on production in combination with consumption, exchange, distribution.
In all structures, production is provided by economic resources. At the same time, the products of economic activity are consumed, distributed and exchanged.
This or that economic system includes elements differing from each other. In particular, these components include:
- the structure of motivations and incentives of participants;
- economic mechanism;
- Relations between organizations and enterprises, etc.
The main economic systems and their types
The market is considered a rather complex structure. Inside this economic system, relationships are presented in the manufacturing sector. The market is based on several principles. This economic system is primarily built on human freedom, its entrepreneurial talents. At the same time, the state is treated fairly.
It should be noted that there are few principles on which the market is built. However, they are of great importance for the very concept of "market economy". Fundamentals such as fair competition and individual freedom in a market environment are closely linked to the concept of the rule of law.
For underdeveloped countries, a traditional economic system is inherent . It is based on backward technology, the widespread dissemination of manual production, the multistructure of the structure itself (the presence of various forms of management).
In some countries, subsistence and community forms of management are maintained . Great importance is attached to small-scale production, which is based on the principles of private ownership of production resources and the personal work of the person who owns them (resources).
Small-scale production in some countries consists of numerous craft and peasant farms.
Often in conditions of such an economic system, great importance is attached to foreign capital. She herself is predictable, stable. In the context of the traditional structure, a large number of material goods are created. At the same time, such a system is not protected from external influences and cannot progress and improve.
The life of society itself is characterized by the dominance of customs and traditions, class and caste divisions, and religious values. All these factors hamper economic development.
In the USSR, in a number of East European and Asian countries, the administrative-command (planned) system of the economy dominated.
This structure is characterized by public (real - state) ownership of almost all economic resources, bureaucratization and monopolization. The basis of the economic mechanism is centralized economic planning.
Management of enterprises is carried out from one center located in the highest echelons of power. This does not allow subjects of the economy to develop independently.
With a mixed system of economic development, priority areas are: market organization, multi-sector, social protection. The structure is based on a combination of state-owned and private business. Moreover, the first provides comprehensive support for the second.
Along with this, the state tax, credit, and financial policies are oriented towards social stability and constant economic growth.
The mixed economic system of Russia, France, USA, Japan, China, Sweden, Great Britain is inherent.