There are a variety of economic systems today, which can influence how
prosperous we will be as individuals or as a group. Socialism is an
economic system where the government will be greatly involved in the
economy. In a socialist economy the government can control many
industries, provide public institutions such as health care and
education, and equalize incomes of the population. A socialist
economy is one of low unemployment and stability, where the government
sets production quotas and price regulation upon their perception of
the needs of the economy. On the other hand, a capitalistic economy
is an economic system where there is a very limited amount of
government involvement. The capitalistic economy is based on the
demand of consumers and the supply of producers.
There is a great advantage of living in a nation where there is a low
amount of government intervention in the economy, because government
intervention reduces the freedom of markets, causes a slow growing
economy, and exploits the consumers in the economy.
Firstly, high government intervention reduces the freedom of the
markets. When the government controls an economy, the population is
taxed in order to fund national programs. Taxing the consumers of the
economy will reduce the personal spending, therefore causing the
economy to grow in areas of public service such as education and
health care instead of technology and fashion. Furthermore, the
industries in a social economy are directed by quotas, which is
production targets set by the government. The quotas don’t often
represent the need in the economy, therefore causing a surplus or a
deficit of products, which leads to small profits....
... middle of paper ...
...ions placed on
industries in a social economy will affect the price, variety, and
quality of products produced in their economy.
In conclusion, there is a great advantage of living in a nation where
there is a low amount of government intervention in the economy,
because government intervention reduces the freedom of markets, causes
a slow growing economy, and exploits the consumers in the economy.
Capitalism provides a marketplace where industries compete in order
attract more consumers, therefore providing more efficient,
qualitative and plenty of variety for consumers. This efficiency,
quality, and variety will help the economy grow in whatever way it
wants to, making capitalism the most flexible economic systems. The
nature of human beings is, one is satisfied, when he/she has provided
the necessities for himself first, then the people around him.
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