A Comparison of Economic Systems

FIGURE 1.1 A Comparison of Economic Systems MORE LESS GOVERNMENT GOVERNMENT CONTROL CONTROL Substantive Procedural Guarantees Guarantees Socialism Social democracy Regulated capitalism Laissez-faire capitalism Complete government Mostly private ownership Private ownership and some Private ownership and no ownership and control but extensive government government control government control (substantive guarantees) control (substantive and (procedural guarantees) There are '70 real-World examples. Examp/es.‘ North Korea, procedural guarantees) Examp/es: Great Britain, Cuba, former Soviet Examples: Sweden, United States UNION Norway Economic systems are defined largely by the degree to which government owns the means by which material resources are produced (for example, factories and industry) and controls economic decision making. On a scale ranging from socialism—complete government ownership and control of the economy (on the left)—to laissez-faire capitalism—complete individual ownership and control of the economy (on the right)—social democracies would be located in the center. These hybrid systems are characterized by mostly private ownership of the means of production but considerable government control over economic decisions.