Comparative economic systems Essay Example | Topics and Well Written Essays - 2500 words

Comparative economic systems - Essay Example With industrialization came the need for a skilled and diverse workforce where traditional work arrangements were no longer feasible. During the Cold War period the world was divided into two main camps with the West (USA, W. Europe) embracing a free market economic system and the East (USSR, China) embracing a command economic system. In a free market economic system a nation’s economic activities are the result of individual decisions by buyers and sellers reflected in the price of products and services in the marketplace. People have the freedom to develop their talents and abilities and take up work or enter professions according to individual choice. They can also produce and supply goods and services as private businesses freely within legal and contractual obligations. The free market economic system of the West adumbrating free enterprise has been (and continues to be) referred to as capitalism. Up until the end of the Cold War, capitalism was a term of opprobrium to the East where communism ( a term of opprobrium to the West) was the term used for a command economy where all economic activity of the nation was controlled centrally by the government (mediated by the Communist Party). No private individuals were allowed to own and operate the means of production of goods and services. Public ownership, except in very small scale, local economic activity, was the norm. As everyone knows, USA exemplifies the paradigmatic capitalist state while Soviet Russia and China used to exemplify communism. Things have changed for Russia and China since the 1980s (although the latter still holds onto the communist label) and what these changes are, how they have been adopted and the progress achieved are the concern of this paper. A third kind of economic system called socialism is adopted by some countries with most of the major industries,