Answer to Question #172953 in Economics for aliah

Question

1.   Which of these economic system would you like to stay in, assuming you had a choice –

capitalism, socialism, mixed economy or Islamic economy. Explain in detail your reasons for your choice in a report,

Answer 1

Capitalism is an economic system based on private property rights and free enterprise. The phenomenon originated in Western Europe in the 17th-18th centuries and is now widespread throughout the world.

To understand what capitalism is, you need to understand its main features that distinguish it from other economic systems. The basis of this phenomenon is free commerce, as well as the production of services and goods by individuals. It is also important that all this is sold only in free markets, where the price is determined depending on supply and demand.

Capitalist society makes its living through free employment. In other words, labor power is sold for wages. So what is capitalism? This is the fundamental freedom of the market. In order for a society to have capitalist relations, it needs to go through several stages of development. This is an increase in the amount of goods and money in the market. In addition, capitalism also needs a living labor force - specialists with the necessary skills and education. Such a system cannot be controlled from a specific center. Each member of a capitalist society is free and can dispose of his own resources and skills at his own discretion. This, in turn, means that any decision implies individual responsibility (for example, for losses due to inappropriate investments). At the same time, market participants are protected from encroachment on their own rights by laws. Rules and regulations create the balance that is necessary for the stable existence of capitalist relations. An independent court is also needed. He can become an arbiter in the event of a dispute between two market participants.