Essay about Comparative Economic Systems - 1244 Words

Comparative Economic Systems Capitalism is the economic system found in the United States, Japan, and Germany that are based on private ownership of productive property. Items are known as productive since their use can produce other objects of economic value, income, or money. Things such as a worker’s tools, a farmer’s fields, or a factory’s machine can be considered as productive property. The basic four factors of production that are important for any nation’s economy is land, human resource labor, management, and capital. Land sums up to a variety of economic uses for agriculture, mining, and forestry. Men and women who work in mines, factories, offices, hospitals, and other places all provide labor that’s essential†¦show more content†¦According to laws of supply and demand when supplies become more plentiful, prices tend to drop. Being that a firm is the only source of a product or service, it’s known as a monopoly. Monopolies can be very powerful due to the fact that they can charge as much as they want without any competition. Consumers can choose from a variety of products and services, entrepreneurs can switch from one business to another, and workers can quit their jobs and take new ones all has to do with freedom of choice. Adam Smith claimed in a classic expression that when all individuals are free to pursue their own private interests, an â€Å"invisible hand† works to promote the general welfare. On the other hand, the Laissez-Faire Theory confines that governmental activity should be confined to: (1) foreign relations and national defense, (2) the maintenance of police and courts to protect private property and health, safety, and morals of the people, (3) those few other functions that cannot be performed by private enterprise at a profit. Many aspects of American economic life are regulated by government at every level, like the prohibition of trust, and protecting the environment. While American economic life is also promoted by government, as well. For example, the government construct public roads and highways, and provides such services as the postal system, the census, and weather reports. Taking risks and making investments are an essential part of theShow MoreRelatedEssay about Comparative Economic Systems791 Words   |  4 PagesComparative Economic Systems Governments have built up and founded on many different ideas, systems, and â€Å"what’s right and wrong.† Each country directs certain ideas on what’s right, and what works for them, some can be very successful, but at the same time all have flaws. In this comparative paper the differences and similarities of capitalism, socialism, and communism are going to be addressed. 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