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Economics essay 1

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Introduction

Economics essay 1 Two main economic systems have been developed since the Industrial Revolution, these are Capitalism and Socialism. Both systems have advantages and disadvantages, this essay will explain these, and also give my proposals for a mixed system for the whole society of the United Kingdom. Capitalism Capitalism generally started as an economic system in the United Kingdom at the time of the Industrial Revolution. The basic explanation of Capitalism would be to say that 'the economy is left to its own devices with no Government intervention'. A Capitalist economy is a market economy where all economic decision making is decentralised, and the Government will only supply national defence, administer justice and provide certain public works. The goods that are provided in a Capitalist economy are decided by individuals who choose how to use their labour and spend their income. All resources are privately owned and will only be used for obtaining the highest profit. Advantages of Capitalism There are many advantages to a Capitalist economic system which could make it very appealing to society. The system allows the powers of market forces to operate which in turn gives the consumer a wider range of goods and services. ...read more.

Middle

The state will plan what is needed to be produced to cope with the societies demands, and how to distribute goods. Socialism emerged in response to the great inequality produced through Capitalism during the 1800s, and there were three main theories which people believed would solve the Capitalist society's problems, they were: Democratic Socialism - Socialism through peaceful reform. Revolutionary Socialism - Revolting against the existing system to achieve Socialism. This theory was put forward by Karl Marx who said that the proletariat will take control of the factories. This means the down trodden working class in the Capitalist society will revolt against their employers and form a Communist state, where people will work for each other to provide equality. Anarchists - This theory involves rejecting Government authority and living in small groups or communes with no Government influence. In 1917 the first major Socialist revolution occurred, this was in Russia and led to the birth of the Soviet Union. Since then Socialism has spread to other countries, such as China and Cuba and in 1988 included about one third of the worlds population. However the Soviet Union has collapsed and split into independent states, which are all trying to move to a more Capitalist society, but other countries are still Socialist. ...read more.

Conclusion

Since the war the Government has still kept a lot of control but the opportunity for entrepreneurship is available. The economy in the United Kingdom is, as far as I can see, the only way a society can flourish. The Government tax people but provide, health care, infrastructure, education and welfare as well as owning certain industries to keep some form of economic planning available to them. However recently the Government has sold off a lot of nationalised industries and this has allowed for more competition and moves the economy in to a more Capitalist state. Conclusion In a Capitalist society there is great suffering because of the great inequality but in a Socialist society it seems that, even though the idea of everyone living equally in harmony is appealing, the fact of the matter is that the only equality that people will share is the equality of no choice and oppression. True Socialism can never work in any society because it is human nature to want mare than you have and to strive to achieve this. Countries that say they are socialist seem to me to be more of a dictatorship. A true mix between the two must be achieved to sustain a healthy economy and a happy society. (word count1253) Razi Khan ...read more.

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