In the quest to find which economic system is more efficient, providing the best possible results with the least possible costs, many theories have been advanced regarding capitalism, communism, socialism, fascism, and other "isms." Such arguments present advantages and disadvantages of different economic systems concerning allocation of resources, stability, productivity, and distribution. The main goals are how to satisfy human wants and improve social welfare with limited sacrifice, preserving at the same time efficiency, justice, and freedom in production or enterprising and consumption or choice.
A significant difference between the two major systems, capitalism and communism, is the consumers' sovereignty versus the planners' preference. In the first case, production takes place in order to satisfy the consumers, who know best about their interest and ophelimity or utility. The sovereignty of consumers is the basis of economic and political freedom, whereas the leader's or planner's preference is related to dictatorship and oppression. Although consumers are influenced by advertisement and may not save enough for the next generations, the alternative may be misallocation of resources, lack of freedom, bureaucracy, and inefficiency in production and distribution.
Any economic system is comprised not solely of economic relationships. Social, political, and cultural, in addition to economic, components are embedded in every economic system. Individuals pursue not only material possession, but also their political freedom and their social standing, that is, their status in society.
The process of change in economic systems has been given a number of interpretations throughout history. Ancient theologians, Greek philosophers, and
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Publication information: Book title: Contemporary Economic Systems:A Regional and Country Approach. Contributors: Nicholas V. Gianaris - Author. Publisher: Praeger Publishers. Place of publication: Westport, CT. Publication year: 1993. Page number: 1.