Four Different Economic Systems and Which One I Think Best...

The different emphasis placed by different societies about several goals and priorities to answer the three key economic questions has lead to the evolvement of four different economics systems which i will critically analyse in this assignment. Furthermore, i will be critically discussing South Africa as a mixed economy as to why it is characterized as a mixed economy and the suitability of the economic system for the current economic conditions. â€Å"A government is not need to ensure the whole society’s welll-being† Adman Smith. 2.LITERARY REVIEW OF THE FOUR ECONOMIC SYSTEMS 2.1. Traditional Economic System: The traditional economy is a system whereby the goods and and products created by the society are shaped by the customs,†¦show more content†¦Decisions on investment and the allocation of producer goods through markets is a significant defining element of a market economy. In comparision to the mixed economy, a market economy may have more income inequality due to the role palyed by the state. 2.4. Mixed Economic System: The mixed economy is an economic system which is characterized by the co-existence of both the private and public sector, incorporating aspects of both market economies as well as planned economies.Plenty of the economic decisions are made by individuals in the market but the state does close supervision in existence of monopolies and plays a role in the allocation and distribution of resources. Harris, L.. (1990/91:33) stated †The idea of a mixed economy also has a political role which is more substantial than its role as a label in a world where ideologies and perceptions are changing†. Private participation in production is permitted which regulates healthy competition leading to profitability, in contrast it plays a role of contribution to public ownership in manufacturing to address social welfare needs. 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