Essay Example on Types of Economic Systems: An Overview

Introduction

An economic system is a mechanism by which economies or governments coordinate and disperse available capital, utilities, and commodities within a geographical area or world. Economic systems control drivers of economics, including money, labor, physical infrastructure, and enterprises. The types of economic systems include traditional economies, command economies, mixed economies, and market economies (Roland, 2018.) The traditional economic model is based on commodities, services, and work, which are established in given trends. A reliable, centralized power resides in a control network, which governs a substantial portion of the economic system. The conception of free markets is based on capitalist economic structures. Policy retains limited resource regulation and does not intervene with large parts of the economy. Mixed schemes incorporate control and order economic features. The United States of America, Belgium, and Argentina all adopted one of the economic systems in the 20th Century.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Economic Systems during the Twentieth Century in the U.S.A

The United States had a mixed economy. It worked according to an economic system that features of both socialism and capitalism. A mixed economic structure secured private property and enabled a degree of economic freeness in capital use, but also permitted policymakers to participate in economic activities to accomplish social goals and the public interest. The U.S. government has also been involved in the country's economic relations. During specific time frames in U.S. history, however, it was nearer to a true free-market economy, in which the private sector, or persons, is unrestricted in its market behavior and choices (Todorov, 2018). Conversely, the mixed economic structure of the U.S.A. had both free-market features and centrally controlled government economic restrictions.

By 1998, the U.S. G.D.P. had reached $8.5 trillion, making it the most prolonged sustained growth era in American history. Technologies in computing, technology, and health sciences have opened up vast possibilities for American people to work and great goods to buy as the Soviet Union and Eastern Europe fall communism. And the growth of western and Asian markets gave American entrepreneurs new investment projects. While many Americans had attained economic stability by this point, with some also collecting vast amounts of money, poverty was still a big problem confronting the government, and a significant number of Americans lacked access to appropriate health care. Industrial employment in the manufacturing industry had struck at the end of the decade, experiencing losses when technology started to take overwork, and some industries saw demand for their products decline (Todorov, 2018). Generally, Americans agree that a private-owned economy was likely to function more effectively than one with significant government control.

The government also discussed concerns beyond market forces' control. This offered Medicaid and unemployment insurance for people who are struggling to sustain themselves because they face difficulties with their personal life or because of economic instability, they are losing their jobs. In other aspects, too, the U.S. economy has improved. Population and labor force have moved significantly away from agriculture to cities, from fields to manufacturers and, above all, to service sectors. In today's economy, private and state-service suppliers greatly outnumber agricultural and consumer goods manufacturers. As the economy has been growing more diverse, figures often show a significant long-term shift in the last centuries away from self-employment towards serving others.

Economic Systems during the Twentieth Century in Belgium

Belgium had a free-enterprise economy, which is based on both manufacturing and service industries, with the more significant part of the G.D.P. derived by the service industry. The Belgian economy was also intrinsically tied to Europe's. The government was a part of several intergovernmental institutions, including the BLEU, the Benelux Economic Union, and the E.U. Belgium globalized its economy when it became a part of the European Coal and Steel Community in 1952. Belgium also became a charter member of the European Monetary Union in 1999, which bolstered its economy (Roland, 2018). In an attempt to counter the near-depression levels of industrial production that had formed, the government regulated underperforming sectors, especially steel and textiles, providing tax incentives, lower interest rates, and capital benefits for attracting international investment. Such measures have been relatively successful, but have left Belgium with one of Europe's highest budget deficits in comparison to gross national product. The government was required to borrow extensively from abroad to fund international policy and maintain its egalitarian program of social security.

The economic stability of Belgium lies in its strategic location at the crossroads of Western Europe, its highly educated and qualified population and its presence in the E.U. Belgium established a highly efficient and effective transport infrastructure throughout its industrial era which included roads, terminals, tunnels, and rail services (Roland, 2018). The government has already been involved in efforts to privatize other state-owned enterprises. Belgium's economic model improved as it started to embrace the E.U.'s main policy reforms, including eliminating trade restrictions, such as quotas, between the 15 member states of the union. The E.U. has also been coordinating its member states' international trade.

Economic Systems during the Twentieth Century of Argentina

Argentina had a mixed economic system that featured several private rights, along with centralized policy management and government intervention. The economy of Argentina that was one of the most strong in the area, was based on utilities and production. At the same time, for most of the 19th and 20th centuries, agriculture and ranching overshadowed agriculture. Argentina generated more cereals than any other Latin American region. However, the state's promotion of economic development distracted expenditure from agriculture, and agricultural production declined drastically (Brennan, 2016). The government introduced an economic stabilization policy in the early 1990s, increased inflation by creating the equal in value to the U.S. dollar, and made several state-run businesses private, using some of the revenue from their sale to eliminate the national debt. The subsequent international capital inflow and improved manufacturing production helped reinvigorate the economy.

Economic Systems during the Twentieth Century in Panama

Panama had a mixed economic structure that featured several private rights, accompanied by centralized government policy and government control. The post-war depression gave way to massive economic development between 1950 and 1970. All sectors were instrumental in development. Agricultural production soared, fueled by increased fishing activity, the expansion of high-value fruit and vegetable production, and the rapid increase of banana exports following planting of disease-resistant plants. Trade had grown into a relatively complicated commercial and industrial network. Banking, tourism, and utility exports to the Canal Zone grew exponentially (Rauch, 2019). More notably, an increase in international trade was a big boost for the use of the canal and the economy.

Panama's rise in the 1970s and 1980s oscillated with the complexities of the global economy. Economic growth slowed significantly after 1973, owing to a variety of regional and domestic causes. Throughout the twentieth century, the development of Panama's economy was distinguished by the equivalency between a broad internationally-focused services sector and a low, inward-looking products market. The most significant shift in that system was the rapid growth of the services industry. Services accounted for almost 60 percent of G.D.P. in 1950; that share increased in 1965 to 63 percent, and in 1985 to over 73 percent (Rauch, 2019). Given the geographic position of Panama, advanced facilities, and a skilled workforce trained in industrial and financial operations, services remained the economy's leading field.

Differences in Economic Systems and Their Effects on Each Country's Relative Progress in Achieving Economic Growth Goals

United States of America and Argentina shared a mixed economic system whereby market systems were under stringent governmental control. At the same time, Belgium had a free market system whereby market forces were allowed to control the country's economy. These economic systems had various effects on each country's relative process in achieving economic growth goals. Governments, for example, also placed legislative limits on informal purchases in the private sector in the U.S.A. Private businesses required licenses issued by the government to carry out such activities. Such practices were banned entirely. Governments purchased public properties or offered essential services, and then used tax policy or incentives to adjust the consumer price indications (Roland, 2018). The Great Depression of the 1930s, however, significantly weakened the Argentine economy by slashing international exchange (Roland, 2018). Following the Great Depression, subsequent regimes from the 1930s to the 1970s adopted an import substitution policy intended to turn Argentina into a nation that is self-sufficient in both manufacturing and agriculture.

And in Belgium, the government sought to cut the budget deficit in the early 1980s; the debt-to-GDP level declined as the central bank adopted tighter economic and financial policies (Brennan, 2016). The government reduced its contribution to the social security program in the early 1990s. It depended heavily on foreign commerce, and most of its economic sectors are focused on exporting goods. Exports by the country are equal to approximately two-thirds of their G.N.P. Also, Panama shared similar economic systems as the United States. The products market, by comparison, had deteriorated in relative terms. While attempts had been made to boost agriculture and industry - and both reported significant growth - their proportion of G.D.P. has dropped like that of the services industry has grown. In the late 1980s, one of the biggest problems facing Panamanian lawmakers was that of utilizing the services industry as a stepping stone for prosperity, predominantly in the industry but also in agricultural production. Development accounted for approximately half of the manufacturing sector, followed by production, electricity, and mining. Observers assumed that potential economic growth should depend primarily on international markets, given the limited size of the domestic market (Rauch, 2019). Consequently, success will rely in no small measure on the ability of Panama to keep its economy globally aligned and competitive.

References

Brennan, J. (2016). Region and Nation: Politics, Economy and Society in Twentieth Century Argentina. Springer.

Rauch, F. (2019). CEP Discussion Paper No 1633 July 2019 Economic Geography Aspects of the Panama Canal Stephan E. Maurer.

Roland, G. (2018). Comparative Economics in Historical Perspective. Comparative Economic Studies, 60(4), 475-501.

Todorov, T. (2016). Hope and memory: Lessons from the twentieth century. Princeton University Press.