Types of economic systems: traditional, command, market and mixed

Throughout the entire period of human existence, beginning with the primitive society, the economic system, that is, the relations established with respect to property and the economic mechanism, contributed to solving the main question of how to satisfy unlimited needs with limited resources . There are the following types of economic systems - traditional, command, market and mixed.

The traditional system is characteristic of the primitive communal system, in which everything - both land and capital was in collective ownership, and the distribution of resources occurred in accordance with the foundations and traditions.

However, over time it became obvious that the factors of production give the greatest return, being in the possession of not the collective, but of individual families.

The main features of such a system are manual labor, a low level of division of labor or its absence, backwardness in the development of technology, the rejection of innovations.

Now consider the remaining types of systems, starting with the market. It is the complete opposite of the traditional.

With this arrangement, the state plays an unimportant role, remaining in the shadow of a market dominated by free competition. Sellers are interested in having their goods purchased by a large number of buyers, and those in turn are willing to pay a price that has been established spontaneously due to the functioning of the market mechanism.

In a market economy, private property is ubiquitous, actors can dispose of their available resources as they want, while making profit for themselves (profit), that is, each pursues its economic interests.

All the issues and contradictions that arise on the market are solved by the market independently.

From all of the above, we can draw a conclusion about the shortcomings. The most important thing is that often with such a system there is a huge gap between rich and poor layers of the population. There may be a situation in which some are bathed in luxury, while others are mired in poverty.

That is why such a device was called unfair, and a new idea of an equalizing economy began to develop, in which the state itself would eliminate "chasms" in revenues.

Thus, the types of economic systems are represented by another category - command, or administrative-planned, or planned system.

Here, the state takes on the responsibility to solve almost all issues, distributing and orders between enterprises for the production of goods. And it is surprising that some of them did not find realization, that is, in theory, such producers had to incur losses, however, the company's cash was still allocated regularly.

With a planned economy , entrepreneurs have no freedom of initiative, they produce what the state requires. As a consequence, manufacturers had no interest in introducing new technologies, increasing labor productivity.

The mixed type is the latter, which represents the main types of economic systems. In it also the factors of production are mostly privately owned, but the government can actively participate in the distribution of resources besides the market.

Of course, the types of economic systems without an admixture of one in the other are not found in practice, but are rather developed models. They describe the main trends, but with abstraction from many economic phenomena. Even the same types of economic systems in different conditions manifest themselves specifically, however, in theory, rather general, typical characteristics for better understanding are given.

Thus, we understood that they represent the main types of economic systems, examined each of them in more detail. You can not say that the market or mixed system is the best, and the team system is not. For each society, those species are selected that can improve the efficiency of the economy as a whole with minimal costs.