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Economic System Essay

1950 words - 8 pages

Microeconomics Paper: Economic systems
Yang Cong
Professor Memmos

Aug 1st, 2012
Table of Contents
1, Introduction of economic systems
2, the analysis of capitalism
3, Example of capitalism: the U.S.
4, the analysis of socialism
5, Example of socialism: China
6, the analysis of communism
7, Example of communism: North Korea
8, my favorite one is socialism
9, Conclusion

There are three main economic systems in the world which are capitalism, socialism and communism. Nowadays, most developed countries are capitalism and they have certified that capitalism is better; the greatest developing country which owns the second high GDP in the world, China, is socialism, it seems that ...view middle of the document...

The innovation could make more money but it also brings a lot of uncertainty, so the government should intervene to avoid these uncertainties. There are no previous examples of innovation to tell people which are the right ways to innovate, that is why the government needs to intervene the economy of the whole country. Also, the unfair share between capitalist and laborer is another disadvantage of capitalism. The capitalist’s profit is the surplus value of laborer. Basically, it is very unfair because although the capitalists provide opportunities to laborers to help them make money, the laborers cannot get enough value which they have produced and the surplus values make capitalists become richer. This unfair thing makes the deep poverty gap.
The United States is the greatest economic giant in the whole world because of its strongest economic power. As the representative of capitalism, the United States has the highest GDP in the whole world. The capitalism has existed in the United States for a long time and improves its economy a lot. It encourages private capital to make more profits, and improve the level of technological innovation and productivity. Also, capitalism follows the laws of the market to maximize the mobilization of private investors and private enterprises. That is good to improve American production technology, labor productivity, and social wealth. Economic prosperity also makes social stability which falls unemployment, raises wages, and declines crime rates. Although many advantages of capitalism make American economy develop faster, it still has a serious problem which is economic bubble. “Deficit policies occupy the leading position in American macro-control. American government always complies with Keynesian for a long time, and believes that the reason that total social supply is not the same to total social demand is the lack of effective demand (the analysis of American economy).” So most of the successive governments implement the expansionary deficit policies, in order to deal with cyclical fluctuations, and stimulate effective demand artificially. Deficit policies are easy to make economic bubble to stimulate the excessive consumption and promote market false prosperity, especially in the financial markets, it also has contributed to raise inflation rates. Once the bubble bursts, the economic crisis would be coming.
“Socialism is an economic system characterized by social ownership and cooperative management of the means of production, and a political philosophy advocating such a system (Wikipedia).” In socialism, the government needs to control the whole market in order to promote the productive power according to the current market situation. The main economic strategies are based on the market and include more government control than socialism. This is the best advantages of socialism because when the economic crisis was coming, the government could adjust the macro-control policies and introduced a series...

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