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Q: "economic systems" ( Answered,   0 Comments )
Subject: "economic systems"
Category: Business and Money > Economics
Asked by: ilaga100-ga
List Price: $10.00
Posted: 22 Oct 2002 18:11 PDT
Expires: 21 Nov 2002 17:11 PST
Question ID: 88337
what kind of ecomic system does the united states operate under?  how
is it different from capitalism and marxism, or is it the same in some

Request for Question Clarification by snapanswer-ga on 22 Oct 2002 18:35 PDT
Can you provide more details about the type of answer you are looking
for?  A question this broad lends itself to multiple subjective
opinions on the topic.  You may find that an answer provided is a
collection of opinions, rather than a definitive answer.  Is that

Clarification of Question by ilaga100-ga on 22 Oct 2002 22:50 PDT
i deffinitely do not want the answer to be to opinionated or broad.  i
am a business major at a prominent business school and am taking a
course on business ethics.  i am pretty sure that the US operates
under a free market economic system.  if i am wrong that is the first
thing i want to know.  secondly, i am not very familiar with
socialism, marxism, or capitalism, however i do think based on reading
a little about each one that capitalism and marxism seem to fit the
description of our economic system.  am i wrong, and what
characteristics do they differ in from ours and which characteristics
are they the same?
Subject: Re: "economic systems"
Answered By: rippo-ga on 23 Oct 2002 01:29 PDT
I received my B.A. in Economics at a prominent west coast university,
and am happy to answer your question. First, and most importantly, the
United States' economic system is best defined as a "mixed economy" -
it is neither a purely capitalistic society, nor is it a purely
socialist society, however its core tenets are more aligned with
capitalism than socialism.

Your statement that the United States economic system is a free market
system is factually correct but not entirely accurate - capitalism
thrives based on a free market economy where the supply and demand of
goods is regulated via the sale of goods between opportunistic
individuals. To understand these clarifications ("mixed economy", and
the role of a free market in the United States economy), a brief
description of capitalism is below, followed by comparative
descriptions of socialism, communism and marxism.

The major economic systems you are concerned with can be quickly
understood by focusing on six major questions about such economic
systems' core characteristics:


1) Who owns property & the means of production?
2) Who owns the services?
3) Who sets the prices of goods and services?
4) How are members of government elected?
5) How are taxes levied?
6) How does the individual good fare versus the societal good?


1) All property & means of production are privately owned 
2) All services privately owned 
3) Prices are set by supply and demand in a free marketplace
4) Government members are elected via public choice and competition
5) No taxes in a pure capitalistic society
6) Individual good always trumps societal good


1) Most property & means of production are privately owned 
2) Most services privately owned 
3) Prices are set mainly by supply and demand in a free marketplace,
with some government regulation
4) Government members are elected via public choice and competition
5) Taxes are low and progressive
6) Individual good usually trumps societal good


1) Most property & means of production are owned by the state
2) Most services owned by the state offered at subsidized prices
3) Prices set with heavy government intervention
4) Government members are elected via public choice and competition
5) Taxes are high and progressive
6) Societal good trumps individual good 


1) All property & means of production are communally owned
2) All services are communally owned and operated
3) No prices
4) Communal government 
5) No taxes
6) Societal good trumps individual good

MARXISM, on the other hand, is essentially a viewpoint of an economy
or society based on the ideologies of Karl Marx. His ideal economic
system was a classless society via common ownership of the means of
production, distribution and exchange. In his 1848 Communist
Manifesto, Marx described how the most important features of a society
are its economic classes and their relations to each other.
Ultimately, there would be class struggles and each tier of class
(e.g., the proletariat working class, the bourgeoise, the progressive
minded workers, the feudal class, etc) would fight for their own best
interests, resulting in revolutions.

Lenin ultimately shaped Communism out of Marxist principles however
Marxist viewpoints can be applied to Capitalism, Socialism, Communism
or any other economic system by analyzing which classes are struggling
vis a vis the means of production (hence the terms Marxist-Socialism
or Marxist-Communism.)  For example, capitalism normally is replaced
by socialism as a consequence of a proletarian revolution. Or in the
first stages of socialism the state is a dictatorship of the
proletariat. (i.e., the proletariat rules the other classes by force.)
Communism, which evolves peacefully from socialism, is a classless
society under which the state will wither away. Such transformations -
based on class struggle - are examples of Marxist ideology in
explaining an understanding the development of other economic systems.

With all of the above in mind, the United States' economic system is
somewhat of a mixed economy, because it heavily embraces the aspects
of capitalism that stress individual economic freedoms (e.g., private
ownership of means of production/services, free market determined
prices, open elections and heavy emphasis on the individual good) BUT
it also embraces some socialist aspects (e.g., tolerance of government
intervention/regulation when necessary to benefit society at large.) 
According to Marxist philosophy, such mixed Capitalism is viewed as
the exploitation of one social class by another usually for the good
of the individual rather than society at large.

So why isn't the U.S. simply a capitalistic system? Capitalism
requires complete separation of economy and state, which the U.S.
simply does not
have. The United States is best described as a "mixed economy" with a
mixture of freedom and controls, or free market and socialist
policies. When government intervention is necessary for the good of
society, it intervenes, but always with the individual's long-term
best interests, freedoms and opportunities in mind.

Additional Links:

Frequently Asked Questions About Capitalism:

Links to capitalist economic system information:

Links to non-capitalistic economic systems from DMOZ:

Marxist Tenets and Impact on Capitalism/Communism/Socialism:

Links About Marxism:

Search Strategies:

compare capitalism socialism communism
capitalism marxism socialism communism
history capitalism socialism communism
definition marxism
marxist socialism
marxist communism

I hope this answer cleared things up for you!
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