WORLD ECONOMIC SYSTEMS: Reshad Hakim
The Second Session of
An Academic Get together between a group of foreign students
In the department of Politics & Public Administration, University of Pune, India
WORLD ECONOMIC SYSTEMS
Presented by Reshad Hakim, from Afghanistan,
Symbiosis College
Briefly speaking, economic system is the way in which a country manages the production and distribution of goods and services. Each nation and society must make choices and decisions based upon their own values.
Business economic cycle: The business cycle or economic cycle refers to the recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery. Economic systems are divided up into three basic types. These types are:
A "Mixed" Economy: A "mixed" economy is a mix between socialism and capitalism. It is a hodgepodge of freedoms and regulations, constantly changing because of the lack of principles involved. A mixed-economy is a sign of intellectual chaos. It is the attempt to gain the advantages of freedom without government having to give up its power.
A mixed-economy is always in flux. The regulations never produce positive results, because they always force people to act against their own interests. When a particular policy fails, it is propped up by other regulations in the hopes that more control will produce better results. Sometimes the results are so destructive they must either be removed, or the people must be violently oppressed to make them accept it. India is ruled by a mixed economic system, which has fetched this country a number of economic growths.
Socialism: Socialism is a political system that denies the validity of property rights. Instead, it claims that all property is communally owned. Instead of being a variant of property rights, this is an invalidation of those rights. It destroys the concept of rights by invalidating their base in human life.
Under socialism, control of property is put into the hands of society as a whole. The first effect of this is that people cannot be independent. They cannot live on their own efforts, because there goods will be stolen. This means that to live, they must act in accordance with the wishes of society. They are enslaved.The destruction of property rights has an additional effect, though. It destroys the efficacy of one's mind. Without the freedom to act in accordance with one's rational judgments, their minds are invalidated. There is no point to thinking if one cannot act on those thoughts. Since one thinks in order to promote one's life, socialism necessarily leads to an inability to promote one's life. You are required to act against your best judgment and against your best interest.
Socialism is an evil political system. All political systems, though, rest on an ethical system. Socialism is not an exception. It rests on the moral system of collectivism. It is when collectivism is accepted as valid that socialism is possible. It is through collectivism that the crimes of World War 2 brought a communist regime in Yugoslavia and it is the first socialist economy country.
Laissez Faire Capitalism: Laissez Faire is French for "leave alone" which means that the government leaves the people alone regarding all economic activities. It is the separation of economy and state. It is a system in which productive assets are predominantly privately owned and production is primarily for sale. Advanced western economies also contain smaller or larger publicly owned sectors, they are mixed economies. the private owner`s object is to earn a handsome profit from the use of his/her productive assets .this is the main engine of capitalism. It is thought the ideology of early capitalism was typically that laissez faire-no government interference in economic activities, but the government to be only a night watchman and provide them security. This is not correct now, even in Britain, the most advanced capitalist country for several centuries, and there are some points of time in which government interferes. Capitalism in the poor countries is not counseled by most economists because here the riches get richer and poor remains poor as they have no money power, no purchasing power to enter the market, therefore for such countries socialism is required, the government is to provide subsidiaries, distribute the national income equally, till the poor layer gets the scope of market entrance. Afghanistan is experiencing this free market system which has faced so many people unable of earning their bread.
There are two ways that a government typically is tempted to interfere with the economy. The first is through the initiation of force, and the second is through socialized industries. Neither of these activities is aligned with the proper role of government, and is both unacceptable.
"Laissez Faire Capitalism" is actually redundant, due to the nature of Capitalism. Therefore, simply "Capitalism" is sufficient to get the point across although historically it has been misrepresented as compatible with government economic interference.
NOWADAYS THERE IS NEITHER PURE CAPITALISM NOR PURE SOCIALISM. THESE ARE STILL THE DOMINANT WORLD ECONOMIC SYSTEM BUT EVERY OF THESE HAS FACED SOME CHANGES,CHINA IS NOT FUCTIONING BASED ON THE PRINCIPLES NOW THAT IT WAS BEFORE, BUT STILL IT IS A SOCIALIST COUNTRY.
THE SUBSIDIARIES GIVEN TO IRANIAN CITIZENS BY ITS GOVERNMENT IS A SOCIALIST SYMBOL , HOWEVER IT MAY NOT BE HAVING A SOCIALIST COUNTRY. FREE MARKET SYSTEM IS GOING ON IN AFGHANISTAN. SOME EUROPEAN COUNTRIES PROVIDE SUBSIDIARIES TO THE WHEAT FARMERS WHICH DOES NOT MATCH CAPITALISM ROLES AND IS CONTIONOUSLY CRITICISED BY SOME COUNTRIES.
In the present world of ISMS, capitalism, socialism, fascism, Leninism, Communism, Marxism, African socialism, revisionism, these are all political
Movements and ideologies, out of which lets shortly discuss the following systems: Marxism & Leninism.
All these movements are based on a social welfare and socialism but with a tiny difference. The Marxian theory of history belongs to the family of economic interpretations (Materialism). According to Marx all mankind sooner or later must pass through the same succession of major six historical stages: primitive (tribal) communism, slavery, feudalism, capitalism, socialism and communism. Under communism and socialism, it means that production is owned in common, and in all these stages there is no division into classes and exploitation. The famous Marxian formula expresses the principles of income distribution in two cases, under socialism: From each according to His ability. To each according to His labor. Under full communism: From each according To His ability. To each according to His needs. These are the difference between socialism and communism. Now the USSR has not reached at full communism, it claims that it has arrived at socialism and building the basis for full communism. It is easy to find a fault with Marx, most western have complained about his theory`s influentiality. But he is given credit for being a pioneer as a modern sociologist economist.
Leninism:Vladimir Lenin(1870-1924),founder of the Bolshevik(communist) party of Russia and of the communist international, leader of the successful Bolshevik revolution in 1917 and the founder of the soviet state . He was much more than a follower of Marx. He was adapting Marxism to new conditions and pushing its theory and practice in new directions. The Leninist way, rather than the Marxist way of revolution by working class is the only way which the communists reached power.
Islamic economic system: Islamic economic system refers to the principles and regulations set up by Quran and rules used during Prophet Mohammad. Any special clarifications regarding economic system of Islamic societies are brought to minds and the few rules regarding it during prophet are:
· Interest not more than 25% to be taken in business deals.
· Incomes from war and battles to be equally distributed among the participants.
· Charity to be given by every gentlemen or a lady who completes the Zakat measure.
· Percentage in yields from harvests to be collected by local government and used national purposes
These were the primary rules of business during the Islam appearance and later on it continued. Now a days even Islamic governments are following one of the major economic systems of the world, such as Afghanistan, Iran, etc.
ALL THESE SYSTEMS ARE USUALLY NOT OUT OF THESE TWO MARKET TYPES
• PROTECTION POLICY
• FREE MARKET
IN THE FIRST MARKET GOVERNMENT SUPPORTS THE INTERNAL INDUSTRIES IN DIFFERENT WAYS AND PROVIDE THEM POWER TO COMPETE WITH OUTSIDE INDUSTRIES, PUTS UP HIGH RATE TAXES, TARRIFS AND OTHER RESTRICTIONS ON OUTSIDE COMPANIES ENTERING THE COUNTRY, BUT IN THE LATTER TYPE GOVERNMENT LEAVES FREE ALL THE INSIDE INDUSTRIES AS WELL THE OUTSIDERS TO COMPETE ACCORDING TO THEIR OWN ABILITIES AND STRENGHTS.
Conclusion: As a conclusion we can say that capitalism as a giant today’s system is harmful for undeveloped countries. I wish there was an Islamic economic system which could replace both of these systems and fetch more success as the society gives up with poor and everybody can earn their bread in its most humanitarian way.
Thanking You
Reshad Hakim from Afghanistan
Symbiosis College
Dear visitor, you can also participate in our group discussion just by adding your views or comments in YOUR IDEA section.
This presentation is presented and edited by Reshad Hakim, a student of Symbiosis College. References for this presentation needs to be noted.
Note: Academic get-together is an informal voluntary meeting which takes place in Pune University between a number of foreign students.
Baloch Academy Of Humanities www.balochacademy.org
