Comparative economic systems

Summary

Comparative Economic Systems is the sub-classification of economics dealing with the comparative study of different systems of economic organization, such as capitalism, socialism, feudalism and the mixed economy. It is widely held to have been founded by the economist Calvin Bryce Hoover. Comparative economics therefore consisted mainly of comparative economic systems analysis before 1989 but substantially switched its efforts to comparison of the economic effects of the transition experience from socialism to capitalism. It is a part of economics which is the study of gaining knowledge concerned with the production, consumption and transfer of wealth. It is based on the collective wants of the population and the resources available that initially create an economic system. The performance of the economic system can be measured through gross domestic product (GDP); that is, it will indicate the growth rate of country. Normative judgments can be made as well by asking questions like whether the gap of the distribution of wealth and income and social justice. Theoreticians regularly try to evaluate both the positive and normative aspects of the economic system in general and they do so by making assumptions about the rules of the game governing utility-seeking. It is comparatively easy to predict the economic outcomes when the economic system of the country has either a perfect competition or has a perfect planning economic system. With those types of the economic systems, it is easy to offer policy guidance. Ethics, politics and culture play important roles in determining the performance of systems. Common cultures may prohibit or restrict individual's satisfaction, ultimately changing the rule of the economic game while on the other hand, competitive societies may abuse of the economic system and over-stimulate self-seeking. Marxist culture of the 1930s, which associated markets with labor exploitation, obligated Stalin to adopt administrative command planning, and inhibited reform until attitudes softened under Khrushchev a quarter century later.