Economic Systems, Capitalism And Socialism

1829 WordsDec 7, 20158 Pages
Economic Systems People can use economic systems to build empires and destroy civilizations. The society 's featured in the books 1984 by George Orwell and Fahrenheit 451 by Ray Bradbury did just that. Both took advantage of some form of an economic system to achieve their respective goals. Whether it be the command economy of Oceania, or the overly consumerist economy of the dystopian United States, they both employed economics to their benefit. Economics is the science of scarcity. Scarcity is when you have a population with unlimited wants coupled with limited resources. Economics deals with the production, distribution, and consumption of goods and services. An economic system is how a society deals with these factors. The three main questions that an economic system is supposed to answer are what will we produce? how will we produce it? who gets it? Answer these questions and you have an economic system (Hettige). This report will cover the two main economic systems, capitalism and socialism. Capitalism Capitalism promotes private ownership of the means of production, or resources, to produce goods and services for profit. In other terms, private entities purchase resources; be it labor, natural resources, or factories to create goods to sell for profit. Capitalism promotes that people build up their own wealth and that all, or most, available resources be privately owned. Production in capitalism is controlled by supply and demand and individuals purchase products on
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