Question

Discuss in detail the features of Capitalism, Socialism and Mixed economy

Answer 1

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CAPITALISM:-

Features of a Capitalist 

Right to Private Property: This is the essence of capitalism. This right means that private property such as property, factories, machines, plants etc. can be owned under private individuals and companies. The three things covered under this right are: Every individual can acquire any amount of property, He can use these properties as he wishes, He also has the right of inheritance. So he can inherit the property from his forefathers. And he can also pass it on to his successors on his death.

Price Mechanism: Price mechanism is like an invisible hand that controls the workings of a capitalist economy. The forces of supply and demand will determine the prices and the level of productions in the economy. The government will not have any interference in this matter.

Freedom of Enterprise: In capitalism, every individual is free to make his own economic choices without any intervention. This includes both the consumer and the producers. So a producer is free to produce any goods or services. And the consumer is free to buy whatever he desires and from whomever, he wants without restrictions.

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SOCIALISM:-

Main Features of Socialist 

(i) Collective Ownership:

In socialism, all means of production are owned by the community, i.e., Government, and no individual can hold private property beyond certain limit. Therefore, it is government who utilises these resources in the interest of social welfare.

(ii) Economic, Social and Political Equality:

Under socialism, there is almost equality between rich and poor. There is no problem of class struggle.

(iii) Economic Planning:

Under socialism, government fixes certain objectives. In order to achieve these objectives, government adopts economic planning. All types of decisions regarding the central problems of an economy are taken in the economic plans. There is a Central Planning Authority, who plans for the economy.

(iv) No Competition:

Unlike capitalistic economy, there is no cut throat competition. It means lack of competition as state is the sole entrepreneur.
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MIXED ECONOMY:-

Main Features of Mixed 

(i) Co-existence of Private and Public Sector:

Under this system there is co-existence of public and private sectors. In public sector, industries like defence, power, energy, basic industries etc., are set up. On the other hand, in private sector all the consumer goods industries, agriculture, small-scale industries are developed. The government encourages both the sectors to develop simultaneously.

(vii) Check on Economic Inequalities:

In this system, government takes several measures to reduce the gap between rich and poor through progressive taxation on income and wealth. The subsidies are given to the poor people and also job opportunities are provided to them. Other steps like concessions, old age pension, free medical facilities and free education are also taken to improve the standard of poor people. Hence, all these help to reduce economic inequalities.

(viii) Control of Monopoly Power:

Under this system, government takes huge initiatives to control monopoly practices among the private entrepreneurs through effective legislative measures. Besides, government can also fake over these services in the public interest.
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