THE command capitalism’seconomic style

GROUP MEMBERS:

M. JABIR GHALIB

HAMMAD KHAN

M YOUNAS KHAN

ALI NASIR

Subject: Engineering economics

Instructor: Eng.Khadim-ULLAH

Economic styles:The set of rules set by consumers, producers and the regulators that shaped the economics road map are termed as Economics styles.

4 Types of economic styles:1.Traditional 2.Capitalism3.Socialism4.Command capitalism(mixed economics system)

Definitions:Traditional economics system : In this system, the products and services are produced directly keeping in mind the demands without taking care of any planning and growth.The areas where this systems is practical are :1. Rural areas2. 2nd or 3rd world3. Farming oriented economies

Capitalism: The economics system in which the economy is profit driven and production and services are mainly determined by market forces that is i. e; consumers ,producers ,marketers and investors.The govt. plays role as an intermediate and implement only the rules set by economy contributors.

Socialism :The economic systems that is driven by social welfare and the govt. play central role in setting and implementing the rule.

Command capitalism: A system where the government, and the market forces decide both, which should be produced and consumed. This a mixture of capitalism and socialism.

MORE ON COMMAND CAPITALISM:

Command capitalism is a mixture of capitalism and socialism.it adapted the best features of both systems .Therefore, it is called mixed or planned economy.

Countries that are following this system are China, Hong Kong, Singapore, South Korea and many other south-east Asian nations.

China is the only role model that has shown a tremendous economics growth through this system and forced other pure capitalist states to review their economics policies.

Capitalism

1. Privately owned resources

2. Everyone work for their own wealth.

3. Rules and regulations are set by market entities.

4. Employees are motivated for their personal interest.

Command capitalism

1. State +private owned resources

2. Profit + a pieces of social welfare is involved in govt. supervision.

3. Rules &regulation are set by govt in collaboration with market entities.

4. Employees are motivated to develop their society.

Differentiation b/w capitalism and command capitalism:

CHINA AS A ROLE MODEL:

A) In a capitalistic economy, people will make things that make them the richest and not be able to meet all of the needs of the people

1. Make goods for the rich, and not for the poor

B) Government should control production and allocation of resources

2. This would be more efficient, lead to less waste and little or no unemployment

C) In capitalism, you generally have very wealthy and very poor

3. Because command is not concerned with profit, resources are distributed equally and there is a more level economic standing

The great recession of 2008

China successfully survived the recession of 2008, which shaken the entire world and all the strong economies.

The Chinese style did well and despite the recession the economies showed the sign of growth.

North American and European economies stumbled and all the nations reviewed their economic policies

Features

Resources are owned both by the government as well as private individuals. i.e. co-existence of both public sector and private sector.

Market forces prevail but are closely monitored by the government.

Monopolies may be existing but under close supervision of the government.

ADVANTAGES:Producers and consumer have

sovereignty to choose what to produce and what to consume but production and consumption of harmful goods and services may be stopped by the government.

As compared to Market economy, a mixed economy may have less income inequality due to the role played by the government.

A mixed economy represents an achievable balance between individual initiative and social goals.

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