Lesson topic “Types of economic systems” Educational goal: students must understand what an economic system is and what problems it should solve, generalize and systematize students’ knowledge about economic systems, prove the advantages and disadvantages of each system. Developmental goal: to develop analytical thinking, logic, memory, stability of attention, to develop the ability to make non-standard decisions, to develop creative abilities, to form cognitive interest. Educational goal: the ability to cooperate, develop a sense of teamwork, hard work, and a culture of behavior.
Three basic questions in any economic system 1. What to produce? (what goods and services, in what quantities) 2. How to produce? (using what technologies and what resources) 3. For whom to produce? (how these goods and services will be distributed)
The traditional system is a way of organizing economic life in which land and capital are held in common and scarce resources are distributed in accordance with long-standing traditions and customs. Traditional economic systems are characteristic of a number of underdeveloped countries of the so-called third world, which include countries in Africa and Latin America.
Advantages and disadvantages Traditional economy Stability of society Inability to develop and improve, lack of technical progress Poor adaptability to changes in external conditions Limited number of goods produced Caste, patriarchy The principle of heredity Raw materials orientation of the economy In the spiritual and cultural areas, conservatism
A command (planned) system is a way of organizing economic life in which capital and land are owned by the state, and the distribution of limited resources is carried out according to the instructions of the central government and in accordance with the plan. Such economies currently exist in Cuba and North Korea.
Advantages and disadvantages Advantages and disadvantages Command economy Satisfactory standard of living for all Price stability Timely payment of wages Confidence in the future No gap in citizens' incomes No unemployment Social security Free basic services Lack of the ability for enterprises to make independent decisions. Shortage of goods Poor quality of goods Weak implementation of advanced technologies due to its focus on the plan rather than profit. Low level of agricultural development. Food problem.
Advantages and disadvantages Advantages and disadvantages Market economy Greater freedom of choice for producers and consumers. Wide selection of goods and services. Introduction of advanced technologies. High quality products. The impact of competition on efficiency, improving quality No shortages High productivity of farms Significant difference in the incomes of citizens and in the standard of living. Problems of social justice Economic instability: it is characterized by booms and busts. Unemployment Uncertainty about the future. Payment for most services.
Mixed system A mixed system is a way of organizing economic life in which land and capital are privately owned, and the distribution of limited resources is carried out both by markets and with significant government participation. Almost all existing economies in the modern world should be classified as mixed. In the real life of any country, not a single economic system is present in its pure form. In England, for example, about 30% of the workforce is employed in the public sector, the remaining 70% is employed in the private sector.
Table. “How do traditional, command (planned) and market economies answer the main questions of economics?” Economic system Method of decision making What to produce? How to produce? For whom to produce? Traditional Command (planned) Market
Table. “How do traditional, command (planned) and market economies answer the main questions of economics?” Economic system Method of decision making What to produce? How to produce? For whom to produce? Traditional Those goods that were produced by ancestors According to tradition, equally According to customs. Command (planned) Market
Table. “How do traditional, command (planned) and market economies answer the main questions of economics?” Economic system Method of decision making What to produce? How to produce? For whom to produce? Traditional Those goods that were produced by ancestors According to tradition, equally According to customs. Command (planned) Goods according to the state plan The issue is resolved by the state, enterprises have little interest in upgrading equipment All produced goods are distributed by the government on the principles of equality. Prices for goods are set by the state. Market
Table. “How do traditional, command (planned) and market economies answer the main questions of economics?” Economic system Method of decision making What to produce? How to produce? For whom to produce? Traditional Those goods that were produced by ancestors According to tradition, equally According to customs. Command (planned) Goods according to the state plan The issue is resolved by the state, enterprises have little interest in upgrading equipment All produced goods are distributed by the government on the principles of equality. Prices for goods are set by the state. Market Those goods that people need, otherwise they will not be able to be sold. The issue is decided by private firms, the most advanced technology is selected. Competition between firms. For those who have the money to buy them. There is inequality because people have different incomes. Free prices apply.
Tasks
At Mister's X There was an urgent need for surgery to remove the appendix. And he has enough money to do this operation. Having finished with his appendix, Mr. X states: “Economists are wrong when they say that needs cannot be satisfied. Personally, I completely satisfied my need.” Do you agree with Mr. X or not?
Tasks
After graduating from high school, Nadya Ivanova could work as a cutter at the Krasny Bogatyr factory, receiving a salary of 300,000 rubles per month, as a secretary-typist with a salary of 400,000 rubles per month, or as a salesperson, with an income of 500,000 per month. However, Nadya decided to become a student and entered the Higher School of Economics, rightly assessing the prospects for her future profession. What is the opportunity cost of her choice?
Tasks
Petya Sidorov decided to play tennis. Going to the court is expensive. With limited funds, Petya will obviously have to forgo expenses to satisfy other needs. What in this case can act as an alternative cost:
- - costs of visiting theaters;
- - costs of learning Japanese;
- - costs of food and clothing;
- - costs for horse riding lessons?
Traditional and market economic systems § 3.4
Types of economic systems
Traditional
Team
Market
Mixed
Traditional system
- The dominance of subsistence farming.
- There is no commodity-money exchange.
- Commitment to tradition.
- Lack of technical progress.
- Land and capital are jointly owned.
Market system
- The manufacturer himself decides what, how and for whom to produce.
- Land and capital are in private hands.
- The state ensures order in society within the framework of the law.
What type of system characterizes the text?
“...In October 1922, our country adopted a new Land Code, according to which peasants received the right... to choose forms of land use. Strict centralization... was abolished. The factories independently resolved issues of procuring raw materials and selling finished products.”
- The Indian economy has elements of a traditional economic system.
- The economy of the country of Orange is a market economy because its ruler, Duke Orange, owns and manages all the enterprises of this country.
- Freedom of enterprise and choice is an important characteristic of a traditional economy
Think about it.
In a market economy there is freedom of enterprise. Can we say that an entrepreneur in a market economy is free to produce absolutely whatever he wants?
Command and mixed economic systems
Command system
- The state strictly regulates production, exchange and distribution.
- Planning.
- Land and capital are predominantly owned by the state.
Mixed economy
I – scope of market mechanisms
II – the scope of action of command mechanisms, i.e. control by the state.
1. What most accurately reflects the economic system of Russia?
a) command economy;
b) market economy;
c) transition economy;
d) traditional economy.
2. In the country of Limonia, private firms can produce goods and services in any legal way. In this country:
a) market economy;
b) traditional economy;
c) command economy;
d) none of the above applies.
3. Private ownership, free pricing and competition are the basis:
a) any economic system;
b) traditional economy;
c) command economy;
d) market economy.
4. The special role of the profitability motive in a market economy is that it:
a) forces producers to produce what customers need;
b) forces buyers to buy what producers produce;
c) keeps people from taking risks;
d) undermines consumer sovereignty.
Three fundamental questions in any economic system
- What to produce ? (what goods and services, in what quantity)
- How to produce? (using what technologies and what resources)
- For whom to produce? (how these goods and services will be distributed)
Three ways to solve basic economic issues:
- Traditionally
2) Team methods
3) Using the market
Economic system - a certain way of organizing the economic life of society.
Signs for determining an economic system
- Type of ownership for means of production ( who owns the capital);
- Way coordination And management economic activity ( who decides on the allocation of limited resources).
Traditional system – a way of organizing economic life in which land and capital are in in general ownership, and limited resources are distributed in accordance with long-term existing traditions and customs.
Signs of a traditional economy:
- Backward technology
- Manual labor
- Agricultural production
- Craftsmanship is passed on from generation to generation
- Stability and predictability of society
- Quality and product quality
- Vulnerability to external influences
Command (planning) system – a way of organizing economic life in which capital and land are owned states , and the distribution of limited resources is carried out according to instructions central authorities management and in accordance with plan .
Market system – a way of organizing economic life in which capital and land are in private property, and limited resources are distributed through market .
Mixed system – a way of organizing economic life in which land and capital are in private property, and the distribution of limited resources is carried out as markets , and with significant participation states .
Table. “How do traditional, command (planned) and market economies respond to the main questions of economics ?»
Economic system
Decision making method
What to produce ?
Traditional
How to produce ?
Those goods that were produced by ancestors
Command (planned)
Market
For whom to produce ?
By tradition, the same
Goods according to the state plan
Those goods that people need, otherwise they cannot be sold
According to customs.
The issue is being resolved by the state; enterprises have little interest in upgrading equipment
All goods produced are distributed by the government on the principles of equality. Prices for goods are set by the state.
The issue is resolved by private firms, the most advanced technology is selected.
Competition between firms.
For those who have the money to buy them. There is inequality because people have different incomes. Free prices apply.
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Slide captions:
Command and mixed economic systems
Plan: Command economic system. Mixed economic system. Socially regulated market. Economic system in modern Russia.
Command economic system This is a way of organizing economic life in which capital and land are owned by the state, and the distribution of limited resources is carried out according to the instructions of the central government and in accordance with plans.
The command economy flourished after the First World War. An example of a country in the 20th century with a command economic system was Soviet Russia.
The activities of the command economic system were as follows: What to produce was determined by the State Planning Department; How to produce was determined by the industry ministry; Whom to sell to was determined by the State Supply Committee; At what price to sell was determined by the State Pricing Committee; How much to pay workers was determined by the State Committee on Labor and Wages; How to use the income was determined by the Ministry of Finance; What to build for production was determined by the State Construction Committee; What to sell and buy abroad was determined by the Ministry of Foreign Trade.
Planning in a command economic system is very smart. The plan must: Be drawn up on the instructions of a private owner who bears full financial responsibility; Implemented on the basis of free choice of transaction partners; Be tested for reasonableness by customer demand; Rely on existing economic information.
Mixed economic system This is a way of organizing economic life, based on the use of various forms of ownership, in which the distribution of limited resources is carried out by markets, and with significant participation of the state.
The mixed economic system prevailed for the civilizations of the late twentieth century. The basis of a mixed economic system is private ownership of economic resources.
Some countries have a public sector. It includes enterprises whose capital is wholly or partly owned by the state, but which: Do not receive plans from the state; I work according to market laws; Forced to compete on equal terms with private firms.
The main elements of a mixed economic system:
Socially regulated market This is a type of mixed economic system in which society and the state clearly strive not only to ensure economic growth, but also to implement as fully as possible the principles of combining economic freedom, reasonable distribution of responsibility for the life of society between citizens and the state, and civic solidarity.
The basis of a mixed economic system is the conscious life position of every able-bodied citizen - “I am responsible for my own well-being!”
In modern Russia: The foundations of the command system have been destroyed; The mechanism of the market system is still being formed; Factors of production have not yet completely become private property. In the near future, Russia will inevitably have to recreate market mechanisms and build a mixed economic system on their basis.
Thank you for your attention. The presentation was prepared by Anzhelika Aleksandrovna, an economics teacher at MBOU Secondary School No. 5 in Kashin.
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Slide 2
Tasks of economic activity
What to produce? (what goods and services, in what quantities.) How to produce? (using what technologies and what resources.) For whom to produce? (how these goods and services will be distributed.) The main task of the economy is to select the best solution among alternative options, which achieves maximum satisfaction of needs.
Slide 3
Functions of the economic system.
Humanity constantly has to reconcile its limitless desires and limited capabilities. The more developed the division of labor, the greater the dependence between producers and the greater the need to coordinate their activities. Such coordination must be carried out by the economic system - a certain way of organizing economic life.
Slide 4
Economic systems are forms of organizing the economic life of society, differing in: Method of coordinating the economic activities of people, firms and the state Type of ownership of economic resources
Slide 5
Types of economic systems
The command system (socialism) is a way of organizing economic life in which capital and land are owned by the state, and the distribution of limited resources is carried out according to the instructions of the central government and in accordance with the plan. The market system (capitalism) is a way of organizing economic life in which capital and land are privately owned, and limited resources are distributed through the market. A mixed system is a way of organizing economic life in which land and capital are privately owned, and the distribution of limited resources is carried out both by markets and with significant government participation. The traditional system is a way of organizing economic life in which land and capital are held in common by the tribe, and limited resources are distributed in accordance with long-standing traditions.
Slide 6
The real economy of any country is not purely market, purely centralized or purely traditional. Elements of different economic systems are combined in a special way in each country. It is necessary to avoid the emergence of a command system and allow state intervention in the economic life of the country only to solve those economic problems that markets cannot cope with or cope unsuccessfully.
Slide 7
Share of the public sector in the economic systems of some countries
Slide 8
Thank you for your attention! Think about whether you filled out the table correctly.
Slide 9
Traditional economics
Throughout most of human history, questions of WHAT, HOW and FOR WHOM to produce were resolved in accordance with traditions and customs (“the way they used to be”). Currently, such an economic system has been preserved in its pure form among some tribes of Central Africa, South and Southeast Asia, and the Amazon Valley. In India, for example, people were divided into castes of priests, warriors, artisans and servants. No one could choose a profession according to their wishes; a person necessarily inherited his father’s craft. Thus, the distribution of the most important resources at that time - labor - was dictated by unbreakable centuries-old traditions.
Slide 10
The same can be said about the choice of goods and technologies produced. The same products were produced from generation to generation, and the production methods remained the same as they were hundreds of years ago. On the one hand, this allowed hereditary artisans to achieve the highest level of skill, on the other hand, nothing new was invented or produced. Technical progress and increased production efficiency were impossible because each artisan copied the work techniques of his teachers. The distribution and exchange of products was also decided according to customs.
Slide 11
Command economy
In this economic system, decisions about WHAT, HOW and FOR WHOM to produce are made from a single center, which is usually the head of state. A command economy in a relatively pure form existed, for example, in the state of the ancient Incas. Many centuries later, a similar economic system developed in the USSR and other socialist countries. Currently, such an economy can only be found in Cuba and North Korea. In a centralized economy, all material resources and products of production usually belong to the state. Economic activity is coordinated through plans (planned economy). The calculation of the plan in real life goes like this: all industrial and agricultural enterprises existing in the country report to the top how much they could produce next year. These figures are summed up and, with minor amendments, a plan is drawn up, which is then returned to the same enterprises.
Slide 12
All workers are subordinate to a government official, who is subordinate to a more important official, and so on up the administrative ladder up to the supreme ruler, no matter what he is called: pharaoh, emperor or general secretary of the ruling party. Production technology is determined by the state, because it owns all buildings, structures, machines, resources, etc. The complex mechanism of a centralized economy requires a huge number of managers, planning, calculating and checking officials to operate.
Slide 13
Mixed economy
The mixed economy is designed to use the strengths and overcome the disadvantages of market and centralized economies. Major economic issues are largely decided by the market, but national and regional economic problems are decided by the state. The basis is private ownership of economic resources, although in some countries there is a fairly large public sector. Some resources are centralized and distributed by the state through command mechanisms in order to compensate for some of the weaknesses of market mechanisms.
Slide 14
I – the scope of action of market mechanisms II – the scope of action of command mechanisms, i.e. control by the state. Redistribution of income and resources Creation of public goods Weakening external effects Private property rights Markets for resources and goods Private economic initiative Mixed economic system
Slide 15
Market economy
In a market economic system, people operate who are free from the power of tradition and are not subordinate to a single center. Factors of production and its result - the product - belong not to the community or the state, but to private individuals. Therefore, the problem of incentives for production in a market economy does not arise. Each of them decides for himself what to produce, how and in what quantities, based on one single goal - personal interest, increasing their own wealth and well-being. Under conditions of division of labor and personal freedom, producers are connected with each other through the exchange of goods. This system does not guarantee everyone that he will always be able to exchange his product for others. The downside of freedom of choice is risk and complete personal responsibility. Only by exchanging goods can the manufacturer receive everything necessary to satisfy his needs.
Slide 16
Markets for resources and goods Fundamentals of the capitalist economic system.
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