Comparative Economic Systems

IntroductionMany people who are not familiar with economics may not know about the types of economic systems which are capitalist, mixed, socialism, and communism. For them it might also be unfamiliar that a country can eventually change from one economic system to another. Such a big transition, especially one that affects the whole country can obviously create benefits, but there will also be drawbacks. In a recent interview given last month, Senator Bernie Sanders applauds China transition from socialism to capitalism.This interview can create confusion because those familiar with Senator Sanders ideas know he wants the United States to change from mixed economy, which can be considered a way of capitalism to a socialist economy. However, when you read the article you can understand Sanders viewpoints and the reason behind his comments. When you finish analyzing the article and look at the economic theory you see the connection between the two.The article “Sanders Praises Communist Capitalism” is a based on an interview in which Senator Bernie Sanders’s shares his viewpoints.Some of the things he talks about is regarding China’s shift in economic systems from a socialist system to a mixed economy and about how this change can lead to beneficial things. Reports show China as being known as one of the most unequal countries. Therefore, the main reason Bernie applauds China is for being the top country in history who deals with extreme poverty. Comparing the statistics in 1981 and 2019 regarding the percentage of people who live off less than 2 dollars a day there is a drastic decrease.The idea of having various types of economic systems can be confusing at first, but when we attach them to real world examples it becomes easier to understand. Let’s begin with capitalism, this is the system with more freedom for households since there is no government action. The free market is the biggest strength of this system that means that private businesses and consumers are the ones who set prices for goods and service. For example, living in a pure capitalist country, I can start a business whenever I want without any problems. A mixed economy is very similar to capitalism, however the key difference is that in a mixed economy there is government involvement. In this system I can start my own business and make profit, but there will be government regulations and taxes that will be applied to decrease inequality. The next type of economic system is socialism, which basically is to distribute wealth within the community equally and have public ownership of resources. An example of this is people can start small businesses, but there is more government control of bigger businesses. The last economic system is communism in which the government has total control of resource and goods. People have zero freedom in this type of economy so you can’t start any businesses, and everything is planned by the government. Maybe it’s the similarities that the systems have that can make economic theory hard to grasp, however connecting the theory to the real world can sure help understand it better.Change is a forever occurring thing and just as we see in the article “Sanders Praises Communist Capitalism” even countries can alter their economic system. China has made a transition from socialism to mixed economy also known as modified capitalism and when we see that a socialist like Bernie Sanders applauds this change it can raise questions. It’s all about your opinion and in order to develop one, you must first analyze all the systems. Just like anything else there is both good and bad about the policies of each economic system. Some benefit households more others are more government driven. Each country has their own set of beliefs and polices some will stick with them forever while others will try to make a change. At the end of the day, no one can really say which system is the correct one.Article Summary