There are many different types of economic systems including pure capitalism, market
socialism, and command economy. Each economic system tries to deal with economic
scarcity in its own way and each have there own economic theories. To deal with scarcity
they have set theories and facts and experiments and through time we have learned the
way each deal with scarcity.
Pure capitalism uses complete private ownership to promote competition in the
economy. This promotes better production through competition and limits the
consumption of the scarce resources through conservation. It makes the economic power
widely dispersed and production is maximized. The government role in the economy is
little to none and they use a policy of “laissez faire”. People are motivated by there own
interests and work as hard as they want. This makes economic scarcity up to the people
because they manage the economy at there own rate.
Market socialism is a mixed system which mixes public ownership of resources
with increasing reliance on free markets to organize and coordinate economic activity.
This economic system tries to find a balance between peoples interest and what the
government thinks. This combination of opinions may be more efficient for economic
scarcity. The government and the people make important decision in the use of materials
and labor. This type of economy is used in almost every nation. This economy believe the
balance is what causes the best output of products while conserving and balancing
resources.
A command economy is the exact opposite of capitalism. The command economy
uses the government to regulate all aspects of business and economic resources. The
government tries to act within what it think and what the people think and tries to control
the economic scarcity. They uses planning boards to try and maximize potential output of
the very scarce resources. These board plan to include the future and the impact down the
road. Through extremely careful planning economic boards try to come up with the best
solution possible. They will then enact it on the people in hopes of good overall out come.
Although each system uses its own way to control scarcity. There is no definitive
answer. They are all based on theories and none have been put to the true test. Most all
governments use a mixed type of economy. Its hard to put these governments in there
purest forms considering all the factors that might put forth limitations. Even America uses
a mixed economy. This is because of monopolies and unfair practices. Many command
economies have failed due to the opposite will of the people. Pure capitalism is impossible
because eventually someone becomes to powerful and it no longer becomes fair.
Command economy is hard to put forth because the government can’t generalize for
everyone and its impossible to predict what will go on down the road from now. The
mixed economy offers the best of both worlds and promotes competition but also even out
the playing field so no one gets too strong. In conclusion each system has its incentives as
well as draw backs and there will never be a correct answer due to a constantly changing
economy.