Study for econ Essay Example | Topics and Well Written Essays - 1000 words

Study for econ - Essay Example The economic systems are classified on the basis of the ownership of the factor of production, the legal framework, level of competition, distribution of income, and the organization of decision making. The economic systems are evaluated on the basis of the abovementioned factors or criteria and are normally categorized into three main categories which are as follow: Capitalism is basically derived from the right to life, right to liberty, and right to property. This means that capitalism supports the private ownership of the property in order to control the means of production. Other important characteristics include exchange, capital, efficiency, use of markets, etc. In capitalism the market is controlled by the market forces and there is decentralized decision making and economic system. At the same time there are no legal or political institutions or framework to control the market. Five basic characteristics of capitalism economic system are as follow: Marx implemented the theory of history on the sociological and economic impacts of the capitalism economic system. He was of the idea that the capitalism can only occur in short run due to its negative impacts in long run and thus viewed the capitalism economic system at historical stage. According to him the capitalism economics system can only be progressive in short run and eventually will be useless and will be overtaken by socialism. Marx criticized the approach of capitalism as a social economic relation only between the people as opposite to the relation between the people and resources or things. The concept of the private ownership of capital tends to benefit the owners and ignore the labors and workers. The owners earn profits and income on the expense of the labors and workers. He claimed that the capitalism will results in accumulation of more and more capital by the owner and thus diminishing the labors or working class and thus will create the need of social reforms. H ence, the