Economic system refers to the pattern or the specific model in which how a production or the distribution of goods and services reaches the customers. There are different types of economic styles can be found in different countries. The each economic system has its own features, styles, values and functionalities. The each type of economy has someone to control like ether the market or the government, their flexibility modes, the mode of production and distribution, the profit and loss etc. The main types of economic system classifications are as follows:
Traditional economic system:
These are the type of economic system which is practiced in ancient times. It follows the traditional level of beliefs and customs. This mainly looks back and follows the economic system that has been practiced by their grandparents and parents. Those beliefs and cultures would be involved and practiced by the new generations also. In many parts of the world including Africa these traditional economic system is on practice. Usually the agricultural activities focus on this. Farmers are mainly on this mode of economic system. The rural areas are mainly found practicing these types of traditional economic activities. They maintain economic relationships with other countries also selling the gods and services. There are pros and cons for these types of economic system. The traditional economic system always lie on the traditional beliefs and religion that they tradition would be always their part for the social satisfaction. The cons are in the sense they do not accept the modern or western products and this may tend to cause disability in the stability of the economic system. The traditional economy depends more on natural resource and therefore the output it can produce may not meet the expectations all the time or they may not be able to produce the same quantity of output due to the shortage of natural resources. But the advantage part is that the waste accumulated will be very less here when compared to other form of economic systems. These are the main aspects that come under the traditional economic system.
Command Economic System
This type of economic system is also referred to as planned economic system where there would be a string government to control the stability of the economy. Here, the government decides how to produce the products, how these should be distributed, how many workers are needed and what are the works they should do, the wages for them etc will be determined. The government thereby manages each and every thing that needs for the economy stand. The market has no any role in taking decision regarding the productions. The flexibility with the market is less here. All the economy activities would be under the control of the government. Because of this centralized control, it may not show the faster changes in the society. They would be less flexible also. Communism is a great example for this type of economic system. The market would not have much role in taking up the decisions as everything would be controlled under the government. The change to the production and distribution takes slowly. It has some of the advantages in which a sit s controlled by the government, the people would really have good benefit from it as the costs would be affordable and there would be a healthy supply of resources. Government allocates the workers and there would be shortage of jobs. There would be overtime and fixed wages for the workers. Here the government has all control to the valuable resources and not the market. The government controls everything including the economic activities and stability.
Market economic system:
This si the kind of economic system in which it is not ruled by any sort of government and it is up to the market to take up the decisions and power. People themselves take up the decisions and controls the valuable resources and no government would have control over the resources. People who have money to own the natural resources would also be powerful in the market on this type of economic system. The government and the economy would be separate here and nothing related to the government. There would be a good amount of growth can be expected from this mode of economy. People decide the resources to produce and this may not involve lots of workers instead they cut costs using machine based equipments. Supply and demand mode is chosen by the sellers and buyers here for the pricing. It is up to the people to decide the economy values. The government cannot have any power here and rule out or won the resources and that itself is the biggest advantage of this economy system. The profit changes would be shown immediately compared to the command economy system as the people rules here.
Mixed Economic System
This is the type of economy system that gets united to one by the involvement of two other systems. This is the mixed mode of command economic system and the market economic system. Since these two economic system ahs role here they are also referred to as dual economic system. Both the public as well as the government plays a role in maintaining the economic system. We cannot say that wither government alone or public alone rules the system. The equal power is shared here. The most western economies are now dependent on this type of economy. The workers here would be allocated by the market as well as some would be allocated through the government. The equal opportunities would be given here. It is a mix of the best policies from command economy system and the market economy system. This economy has been practiced in many countries and in some countries they rely more on government policies and in some more on market level. This actually varies. This economy may not always achieve the stability and so, it can also have a many downfalls. This type of economy involves the mixed level of policies and so the benefits would be more.