Economic Systems

Economic systems are differentiated by how a society decides to move around limited resources among a sea of unlimited wants. We don’t exactly have clean-cut definitions though for “pure” economic systems, since the type of government factors into the systems we know--like capitalism and socialism.

In general, we have economies that are either “market economies,” “planned economies,” or some mix of both. Market economies are guided by the “invisible hand” of supply and demand, while planned economies are...well...planned...either by some form of government, or by the public.

While our modern-day global system is a market economy, the US on its own is a “mixed economy,” which has aspects of both market and planned economies. The market economy is most of it, but the US has also got firefighters, public schools, social programs, libraries...you know, things we planned.

Remember: not everything that sounds like an economic system is one. For instance, fascism is really more of a nationalistic governmental system than it is an economic system. A fascist government could choose to adopt a market economy, a planned economy, or a mixed economy.