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What Are Comparative Economic Systems?

Comparative economic systems is a field of study in economics that focuses on analyzing economic systems by comparing them to other types of economies.
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Comparative economic systems is a field of study in economics that focuses on analyzing economic systems by comparing them to other types of economies. These comparisons may be used to examine the economic systems of real countries, or may be used to compare the principles of different economic theories. Analyzing economics through comparison is believed to be useful because no system is inherently perfect; by examining what benefits each theory or economy presents, economists can help craft and refine new theories to help improve future economic practice and thought.

Throughout human history, different economic systems have risen and fallen with the times. Feudalism reigned for centuries, relying on the work of a large peasant or slave class to support the activities of a noble and royal minority. With the adoption of new forms of government came the popularity of theories such as capitalism and socialism, which battled for predominance until the late 20th century. In the 21st century, most economies display some form of blended or mixed economy, using some principles of the mighty capitalist and socialist ideals, but also incorporating other functions that do not fit easily into any category. The study of comparative economic systems focuses on the similarity and differences of all of these systems, with an eye toward improving economic thought.

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It is not uncommon for students to learn the basics of economy through the study of comparative economic systems. Especially in regions with a view toward pluralism, understanding the pros and cons of multiple systems can help students develop their own individual concepts and theories about economics. Socialism, which developed partially as a reaction to the downsides of capitalism, is often taught by comparing and contrasting it to traditional capitalism.

The study of comparative economic systems can also be important to understanding the behavior of different cultures and societies. Learning about past economic traditions and the evolution into modern forms of economy can help shed light on national character, history, and potential future growth. Studying modern economic systems as a product of their history is sometimes known as transitional comparative economic systems.

Some economic experts suggest that the study of comparative economic systems is most useful when approached without a privileged frame of reference. This means that students and teachers cannot presume the automatic superiority of one form of economics, such as the one in their own country, over all others. Objectivity in analysis can help highlight the true benefits and drawbacks of each type of economy; whereas subjective analysis may merely serve to re-emphasize beliefs that already exist.

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serenesurface
Post 3

@discographer-- I don't think that there is a country in the world that has a perfect free economy. It's not possible and even if it was, it wouldn't be ideal. Because sometimes, government regulation actually protects the economy.

People sometimes complain about government giving subsidies to certain industries or helping out banks that are going bankrupt. But these things actually keep the economy stable and prevent negative consequences.

I do urge everyone who has the opportunity, to study comparative economic systems. And those who don't, keep in mind that when your instructor talks about a "free market economy" what they actually mean is a mixed economy that allows businesses to compete freely in the market.

discographer
Post 2

@ZipLine-- I agree with you. I actually do believe that capitalism is the best system but I think that we are given incomplete information about our economic system and other economic systems. I mean, for a long time, I thought that we had a perfect free market economy. But in reality, our economy is closer to a mixed economic system, because there is sometimes government regulation.

ZipLine
Post 1

I'm considering taking a comparative economy course next semester in college. So far, I've taken two basic economy courses. In high school, we were taught briefly about different economic systems. It was mostly a short discussion about capitalism vs. socialism. I don't think that students are given the most objective on the subject though. And even if we are, it's difficult to consider any system other than ours as being better. Past and present politics also has a lot to do with it.

For example, socialism and communism were systems of governance and economics that came from the Soviet Union. Even today, there are socialist governments like China and Cuba and we are not on good terms with them. We oppose these systems and it's not surprising that students can't objectively learn the advantages of these systems. Until college anyway, we are taught that capitalism is the best system.

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