Analysis of Economic Systems: Theory, Practice, and Government Role

This essay explores the theoretical foundations and practical applications of different economic systems, including traditional, command (socialist), market (capitalist), and mixed economies. It argues that pure capitalism, where private individuals own the means of production, is a myth, as real-world capitalist systems invariably involve elements of socialism or government intervention. The essay posits that pure capitalism would lead to undesirable outcomes such as monopolies and a lack of economic progress. Similarly, no country operates under a pure socialist system. Examples like the United States and Sweden are used to illustrate how even countries leaning heavily towards one system incorporate aspects of others. The essay concludes that government intervention is essential for achieving economic prosperity and stability, making pure forms of either capitalism or socialism unrealistic fantasies.

Running head: ECONOMICS
Economics
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1ECONOMICS
Table of Contents
Different economic system in theory and practice.....................................................................2
References..................................................................................................................................3

2ECONOMICS
Different economic system in theory and practice
Theoretically, there exists four common form of economic systems – traditional
economic system, command or socialist economic system, market or capitalist economic
system and mixed economic system. Capitalist economic system refers to an economic
system where private individuals own the means of production. The capitalist economy runs
by the private individuals. The theoretical meaning if capitalist system however different
from what is found in reality (Eckhardt & Bardhi, 2016). Pure capitalism is a myth. In reality
capitalism exists in impure form. It always involves some elements of socialist system or
government intervention. Government often appeared as a rising capitalist class in order to
defeat, undermine or destroy other economic classes. If pure capitalism exists, then the world
would be full of gangster, casino and monopoly. In such a condition an economy would never
achieve the desired progress or prosperity. The only economy that goes closer to a form of
pure capitalism is the nineteenth century America. US despite having a dominance of
capitalism, there still exists different government run programs such as Medicare, Medicaid
and Social Security (Cohen, 2017). Capitalism system without the government intervention
thus is a fantasy. Similarly, no country has pure form of socialist system. For example,
Sweden though known as a socialist economy but it still has private businesses.

3ECONOMICS
References
Cohen, G. A. (2017). Capitalism, freedom, and the proletariat. In Liberty Reader (pp. 163-
182). Routledge.
Eckhardt, G. M., & Bardhi, F. (2016). The relationship between access practices and
economic systems. Journal of the Association for Consumer Research, 1(2), 210-225.