ECONOMICS ANALYSIS OF CAPITALISTIC , SOCIALISTIC AND MIXED ECOMNOMY by. Milan Kagarana

1. ECONOMICS
ANALYSIS OF CAPITALISTIC ,
SOCIALISTIC AND MIXED ECOMNOMY
Presented By:-
(NR 16069)Milan Kagarana
(NR 16118)Rujal Patel
(NR 16180)Pooja Thakkar
(NR 16015)Dipak Bhavsar
(NR 16015)Harsh Shah
(BETA CLASS)

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Economic System
 Economics - Economics is the socialscience that analyzes the production,
distribution and consumption of goods & services.
 Economic System is the system of production, distribution and
consumption
 An economic systemis a mechanism (also defined as system or social
institution) which deals with the production, distribution and
consumption of goods and services in a particular society.
 The economic systemis composed of people, institutions and their
relationships. Itaddresses theproblems of economics like the allocation
of the resources.
 Economic System : An organized way in which a state or nation allocates
its resources and distributes goods and services in the
national community.
 Types:
 Capitalism (Market Economy)
 Socialism (Planned economy)
 Mixed (Capitalism + Socialism) Economics - Economics is the social
science that analyzes the production, distribution and consumption
of goods & services.

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 Economic System is the system of production, distribution and
consumption
 An economic systemis a mechanism (also defined as system or social
institution) which deals with the production, distribution and
consumption of goods and services in a particular society.
 The economic systemis composed of people, institutions and their
relationships. Itaddresses theproblems of economics like the allocation
of the resources.
 Economic System : An organized way in which a state or nation allocates
its resources and distributes goods and services in the
national community.
 There are three types of Economy
 Capitalism (Market Economy)
 Socialism (Planned economy)
 Mixed (Capitalism + Socialism
 CAPITALISM
 Capitalism is an economic system in which the means of production are
privately owned and operated for profit, usually in competitive markets.
 In other words An economic system in which investment in and
ownership of the means of production, distribution, and exchange of
wealth is made and maintained chiefly by private individuals or
corporations.
 Adam Smith (Father of Economics) (Book: Wealth of Nations).
 Subjectto certain restrictions, individuals (alone or with others) are free
to decide whereto invest, what to produceor sell, and whatprices to
charge. There is no natural limit to the range of their efforts in terms of
assets, sales, and profits; or the number of customers, employees, and
investors; or whether they operate in local, regional, national, or
international markets.
 Capitalist System
 Centralized to Decentralized system
 Authoritarianismto representative democracy

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 Free flow of resources
 People strive for self interest in free market
 Beneficial for society
 Based on Demand & Supply Forces
 Monopoly to Competitiveness
 Self sufficiency to Internationalinterdependence
 Producer interest to customer power
 Examples
 United States
 Canada
 United Kingdom
 Australia
 Japan
 Austria
 Ireland
 Sweden
 Switzerland
 Israel
 United States
 Americans are known to be risk takers and capital makers. In the US it is
possibleto begin a business of humble means and expand it to grow into
a conglomerate business model for people wanting to start a new
business.
 Capitalism allows private ownership to spur production of goods and
allows the private owner to keep and track profits for what sells.

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 Benefits of Capitalism
 In years 1000–1820 world economy grew six-fold, in years 1820–1998
world economy grew 50-fold
 Provides Choice to customers
 Provides valuablegoods and services
 Capitalism actively rewards positivetraits like hard work
 Similarly, it punishes negative traits such as laziness and theft
 Narrows thegap between common person and wealthy
 Provides opportunity to realize dreams and desires
 Capitalist societies usually do not havelarge black markets
 Build on democracy
 Social Good
 Major limitations/ Criticism:
 Downfallof work ethics
 Free Market + Self Interest
 Accumulation of wealth
 Encourages inequality in a society
 Business lobbying with government
 Monopolistic tendency
 Human resourceexploitation
 Results in great disparities between income of people owning the capital
resources and others
 SOCIALISM

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 Collective ownership and democratic control of the material means of
production by the workers and the people
 Socialism is a term applied to an economic system in which property is
held in common and not individually, and relationships are governed by
a political hierarchy. Common ownership doesn'tmean decisions are
made collectively, however. Instead, individuals in positions of authority
make decisions in the name of the collective group.
 Socialists argue that socialism would allow for wealth to be distributed
based on how much one contributes to society, as opposed to how
much capital one holds.
 A primary goal of socialism is socialequality and a distribution of Wealth
based on one’s contribution to society and an economic arrangement
that would servethe interests of society as a whole.
 Socialism as we know it today, mostcommonly refers to "market
socialism," which involves individual marketexchanges organized by
collective planning.
 Differencebetween socialism and communism is that communists
directly opposethe concept of capitalism, an economic system in which
production is controlled by private interests. Socialists, on the other
hand, believe socialismcan exist within a capitalist society.
 Examples
 China
 Denmark
 Finland
 Netherlands
 Canada
 Sweden
 Norway
 Ireland
 China
 In China the government manages and controls the economy. Many of
the domestic companies are owned and run by the government.

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Recently, the Chinese economy has become more geared towards
capitalism, but is still officially socialist. Life in China remains relatively
less stressfuland more relaxed than life in capitalist countries like
America.
 Features of Socialism
 Social Ownership of means of production
 Existence of public sector
 Decisive role of Economic Planning
 Production guided by Social Benefits
 Abolition of exploitation of labor
 Benefits of Socialism
 Better salaries
 Stable Environment
 Eliminates poverty
 Better Products
 Fulfills survivalneed
 Opportunity for citizens to explore non-economically-productivepursuits
 Limits of Socialism
 Distorted price signals
 Suppression of economic democracy
 Slow Technological advancements
 Minimize self management
 Reduced incentives
 MIXED ECONOMY
 Any economy in which private corporateenterprises and public sector
enterprises exist side-by-side, and decisions taken through market

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mechanismare supplemented by someform of partial planning, is to be
described as a mixed economy.
 This systemovercomes the disadvantages of both the market and
planned economic systems.
 Provides a clear demarcation of the boundaries of public sector and
private sector so that the coresector and strategic sectors are invariably
in the public sector.
 The government intervenes to prevent undue concentration of economic
power, and monopolistic and restrictivetrade practices
 The rights of the individual are respected and protected subjectonly to
the requirements of public law and order and morality
 Examples
 India
 Iceland
 France
 Cuba
 Russia
 Germany
 South Korea
 Hong Kong
 India
 In a mixed economy, privateand public sectors go side by side. The
governmentdirects economic activity in some socially important areas
of the economy, the restbeing left to the price mechanism to operate.
 Before Independence, Indian economy was a ‘laissez faire’ economy. But
post-independence, she adopted the mixed economy system.
 Thus, it is clear fromthe following arguments that our economy is a
mixed economy.

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 Features
 Resources are owned both by the governmentas well as private
individuals. i.e. co-existence of both public sector and private sector.
 Market forces prevailbut are closely monitored by the government.
 Monopolies may be existing but under close supervision of the
government.
 Advantages
 Producers and consumer havesovereignty to choosewhat to produce
and whatto consumebut production and consumption of harmful goods
and services may be stopped by the government.
 As compared to Market economy, a mixed economy may have less
income inequality due to the role played by the government.
 A mixed economy represents an achievable balance between individual
initiative and social goals.
 Limitations
 One disadvantageof mixed economies is that they tend to lean more
toward governmentcontrol and less toward individual freedoms.
 While mostmodern forms of governmentare consistentwith some form
of mixed economy, the mixed economy is mostcommonly associated
with social democratic parties or nations run by social democratic
governments.
 Some critics of contemporary socialdemocracy argue that when social
democracy abandoned Marxism it also abandoned socialism and has
become, in effect, a liberal capitalist movement.
 Marxian socialists arguethat becausesocial democratic programs retain
the capitalist mode of production they also retain the fundamental
issues of capitalism, including cyclical fluctuations, exploitation and
alienation.
THANK YOU

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