Sample Economics Paper

Economic Systems

The development of a nation is an important undertaking that any government should address. The process of development requires the establishment of the necessary frameworks within which economic activities are undertaken. The economic system that a country adopts is important in determining the kind of economic interaction that will exist. While different economic systems have both benefits and disadvantages, some countries have used at least one of them to dictate the way businesses and other economic functions run. Among the economic systems from which a government can choose include capitalism, socialism, welfare capitalism, and state capitalism. Each of the above systems has the benefits that could prompt some national governments to prefer it. The exploration of the four economic systems will help outline the benefits of each. It will also give insights into an understanding of the benefits they can bring to a nation (Sage & Rouse, 2011).

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To begin with, a capitalist economic system is one of the most popular systems in the world. It has many benefits to the individuals and the nations that use it in facilitating economic interactions. In a capitalist economic system, the private sector owns and controls the economic features of society. The creation of the free market by the capitalist economic system is desirable because it ensures that people can get what they want. Additionally, capitalism is most suited to the modern age, and it allows the economy of a nation to grow exponentially. The implementation of capitalism in a nation facilitates freedom of choice, democracy, and competition. In capitalist systems, people have an opportunity to pursue their insatiable needs in an environment that enhances equality of opportunity. Capitalism is beneficial because it helps producers to enhance the quality of their produce for the market, and it seeks to achieve the social good for the people. Maintaining a capitalist economic system can be beneficial to citizens considering the various advantages outlined above (Isaac, 2013).

On the other hand, a socialist economic system can be a desirable alternative to capitalism because it produces certain benefits that are important for society. Under this system, the state owns the means of production, there is no competition, there are equal opportunities for all, and economic freedom for individuals is limited. The benefits of socialism include control of the means of production in a focused way to ensure better productivity, equality of income, and elimination of monopolistic practices that may hurt consumers (Sage & Rouse, 2011). Additionally, socialism helps to establish the fast economic growth of a nation through proper planning. It also helps to regulate businesses to reduce price fluctuations. Such benefits are important because the growth of individuals goes hand in hand with that of the national economy. Deviation from other economic systems towards socialism could be an important undertaking because it would help in reducing the exploitation of individuals by business operators (Isaac, 2013).

Alternatively, the government may consider adopting welfare capitalism in the process of managing the country’s economy. Under this system, the government establishes policies that guarantee employees welfare services from their employers. The adoption of this method influences the kind of relationships that exists among people, thereby potentially affecting the outcomes of economic activities. A major benefit of the welfare capitalist economic system is that while it allows the private sector to increase its profit through business activities, it also ensures that workers benefit from their efforts. Welfare capitalism also encourages the establishment of incentives for production in the market in such a way that increased production of a firm translates to an increase in employees’ benefits. Thus, the government maintains a certain degree of control over the ownership of the means of production for the benefit of employees (Sage & Rouse, 2011).

If the government of a nation does not adopt any of the above economic systems, the only other available alternative would be the establishment of a state-capitalist economic system. In the course of their economic operations, the government of different countries realizes that they cannot allow the forces of the market to determine who wins and who loses in business. Thus, state capitalism is an economic system in which the government of a state has a stake in defining the rules that protect the country from exploitation by foreign entities. Governments that have adopted state capitalism have the means to promote their countries’ national interests through the implementation of effective protectionist policies (Isaac, 2013).

While some countries have embraced only one economic system in the course of their operation, others have adopted a mixture of more than one. Denmark is one of the countries that have adopted more than one economic system with the practice of capitalism, welfare capitalism, state capitalism, and some form of socialism. The combination of the various economic systems is a reasonable idea that Denmark has implemented and one that should be adopted in our system because it would make it easy for the government to adapt to various economic situations as the need arises.

References

Isaac, G. (2013). The benefits of the new economy: Resolving the global economic crisis through mutual guarantee. Toronto, ON ARI Publishers.

Sage, A. P., & Rouse, W. B. (2011). Economic systems analysis and assessment: Cost, value, and competition in information and knowledge-intensive systems, organizations, and enterprises. Hoboken, N.J: Wiley.

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