Title: Economic Systems: Capitalism, Socialism & Mixed Economy
Headings: Economic Systems: Capitalism, Socialism & Mixed Economy
Economic Systems: Capitalism, Socialism & Mixed Economy
Capitalism:
Definitions of Capitalism:
The concept of capitalism is explained as presented below:
Two types of capitalism may be found in the economic system:
Two types of capitalism may be distinguished, viz:
Characteristics of Capitalism:
The following are the basic characteristics of a ‘pure’ capitalism system:
1. Private Property:
2. Free Enterprise:
3. Price Mechanism:
4. The Market System:
5. Economic Freedom:
This freedom implies three things:
6. Consumers’ Sovereignty:
7. Unplanned Economy:
8. Freedom to Save and Invest:
9. Economic Inequalities:
10. Motive of Profit:
11. Competition:
12. Limited Role of Government:
Merits of Capitalism:
The merits of capitalism are as follows:
Demerits of Capitalism:
The demerits of capitalism may be discussed as below:
Evaluation of Capitalism:
Unregulated capitalism suffers from the following drawback:
Socialism:
Definitions of Socialism:
Characteristics of Socialism:
The important characteristics of socialism are as follows:
1. Government Ownership:
2. Central Planning:
3. Social Welfare:
4. Lack of Competition:
5. Restriction on Consumption:
6. Restriction on Occupation:
7. Fixation of Wages and Prices by the Government:
8. Equitable Distribution of Income:
Merits of Socialism:
The merits of socialism are as follows:
Demerits of Socialism:
The demerits of socialism are as below:
Evaluation of Socialism:
Some of the important among these are the following:
Mixed Economy:
Definitions of Mixed Economy:
Characteristics of Mixed Economy:
The important characteristics of mixed economy are as follows:
Merits of Mixed Economy:
The merits of mixed economy are as follows:
Demerits of Mixed Economy:
The following are the demerits of mixed economy:

Content: The existence of big monopolies results in the concentration of not only income and wealth but also of economic power in the hands of a few people. 10. Motive of Profit: Profit is an important element of capitalism Investment tends to take the direction in which there is more possibility of profit. If the producers feel that they can obtain greater profit by the production of comfortable goods they will be inclined to do so without caring what people actually need. 11. Competition: Competition among sellers and buyers is an essential feature of an ideal capitalist system. Competition reduces market imperfections and associated problems. Therefore, in a free market economy, a sufficient amount of competition is considered necessary if the whole production and distribution process is to be regulated by market forces.