Describe your vision of a model economic system – is it capitalist, socialist, or somewhere in between?In your answer be sure to compare and...

Capitalism and socialism are two different models of organising the economic activities which may be considered as two directly opposing extreme models on a continuum of economic systems that combine the feature of these two systems in different proportions.

Capitalistic system is characterized by a means of production being owned and controlled privately and the economic decisions what is to be produced, how much, and how the the output of the economy is to be shared among different sections of society are the result of working of the market mechanism.

The other end of the continuum is socialistic system in which the means of production are owned and controlled jointly by the society, or rather by the government representing the people. Also the decision and what and how of production and of distribution of the products is decides by government policies and systems. This type of economies are also called command economies.

In real world neither of these two extreme or pure types of economies. It is not practically possible to have these pure type of economic systems. What does exist in reality are economise that are either predominantly capitalistic or predominantly socialistic. This indicates that the best system to have is a combination of capitalistic and socialist system.

Having agreed that a combination of capitalist and socialist system is the best, we are still left with the tricky question of how much of what system. The system that is appropriate for different countries may vary depending upon situation faced as well as effectiveness of implementation. For example, the experience of China with socialist economic system has been much more effective than many other countries.

Also a country may find it best to have one system to begin with and then to shift towards other system over a period. For example, India relied heavily on public sector for rapid development of heavy industries in India following its independence in 1947, but having achieved certain level of economic strength, it is now moving towards increasing reliance on private ownership. Another example is of countries like UK and USA. These countries are seen as hard core capitalist countries since beginning of industrial revolution. However over the years these countries are also gradually moving towards increasing government control of economic activities.