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Types of Economies

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PRESENTATON NAME:LIVINGSTONE MASHANGE REG NUMBERR124257Y MODULE Principles OF ECONOMICS PROGRAMMEBSC HONOURS MEDIA AND SOCIETY STUDIES LEVEL1:1 (VISITING) PRESENTATION QUESTION: Types of economies Societies have developed different broad economic approaches to manage their resources. Economists generally recognize four basic types of economic systems—traditional, command, market, and mixed. Economics is the study of the use of scarce resources to satisfy unlimited human wants” (Lipsey, Courant, Purvis and Seiner 1993:5) In the traditional System the economy is based on tradition, customs and habits where the young men and women simply follow their parents’ line of work.

For instance if the father is a blacksmith the son also becomes a blacksmith. Such tenets nowadays are observed in the rural areas where development is yet to be realised.

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Under this system, according to (Lipsey etal 1993) peasants, artisans and most others living in the village inherited specific positions in the society. In Rushinga, where this writer hails from, people still depend on the beating of the drum as a medium of communication.

There is a certain way of the drum beat that signifies the death in the village. The work that is done by the people and the goods and services they produce and provide follow long-established patterns.

This type of economic system is not very dynamic—things do not change very much. Standards of living are static and individuals do not enjoy much financial or occupational improvement. But economic behaviours and relationships are predictable. You know what you are supposed to do, who you trade with, and what to expect from others. Mohr, Fourie and Associates (2004) affirm that this system is rigid, slow to adapt to change and resist to innovation. In traditional economies, community interests take precedence over the individual.

Individuals may be expected to combine their efforts and share equally in the proceeds of their labour. In other traditional economies, some sort of private property is respected, but it is restrained by a strong set of obligations that individuals owe to their community. The main goal of the society under this system is survival-making sure people stay alive and the merit under this system is the preservation of culture. Under the command or planned economy all decisions about resource allocation are made by government.

The system which is also called collective ownership, allows government to own the resources and finished goods and directs them into the production of the goods and services. Lipsey etal(1993) observed that such system is characterised by the centralisation of decision making where elaborate and complex plans are laid down for the behaviour that they wish to impose. Command system has strong government control. So if you want to start your own business, you have to get permission from the government. Under this system, the government owns most of the industries and companies.

In Zimbabwe, the government controls The Herald and Zimbabwe Broadcasting Corporation Television. It has put in place laws that do not allow any other television channel to operate. Laws such as Access to Information and Protection of Privacy Act (AIPPA), Public Order and Security Act (POSA), Official Secret to mention but a few. This is done under the banner of saving the public interest from information that might cause disorder and despondency yet it’s there to protect those in government in particular ZANU PF.

These state controlled media were used during the colonial era to spread propaganda messages and our government inherited the same system. In this the government involve its state apparatuses such as police, courts and prisons to pin down those who would be in violation of laid down statutes. In media organisations the command system is through the gatekeeping process and the editorial policy. Some serious and news worth stories will never see light of day and the editors simply tell you that they are not stories or they do not want to see you covering or writing articles of such nature.

However, the proliferation of online papers, independent media and satellite television channels has given the public a choice of media that gratify them. This system is based on the principle of equity in terms of the distribution of the scarce resources. A command economy set what to produce and fix the quantity of each good to be produced. Government sets quotas for each factory and decides how much resources should be employed in producing the goods and whom to produce for. Prices and incomes are controlled so that each citizen has an almost equal entitlement to what has been produced.

Free-market economy is a system whereby resources are owned by private individuals. Producers are free to produce what they wish and the consumer has the freedom to decide what to buy which has a bearing on what producers have to produce. Mohr etal (2004) defined a market as any contact or communication between potential buyers and potential sellers of a good or service. Decisions are made on the basis of self-interest. Producers aim to maximise profit. Consumers aim to maximise value for money. Competition exists between producers and between consumers.

Now that government has allowed Star FM, ZiFM to operate people are free to choose a channel that the gratify them and that has created competition with the public broadcaster- ZBC radio channels which enjoyed monopoly for a long time. This has seen the consumers receiving quality media products. Resources are allocated by the price mechanism. For instance when the Newsday was introduced it was selling at $0, 50 but due to the demand, it was then hiked to $1. Products which consumers demand will rise in price thus encouraging producers to supply them.

Producers will need more resources. They will attract them by offering higher incomes to those who own them. Falling demand for products will result in lower prices and lower rewards to owners of resources so that they will then be encouraged to move their resources to where the rewards are greater. In a market economy production is determined by consumers and producers decide on how to produce using the most efficient methods of production in order to keep down cost so that they can compete and maximise profit.

Mixed economic system tends to mix the afore- mentioned systems- mainly the free market and Command economic system. Mulhearn and Vane (1999:19) states that “this system is one that contains a combination of private (or market) and public (or state) resource allocation” In Zimbabwe in terms of media, the mixed system is evident in that there is state control in the registration of the organisation and free market in packaging the media products. To establish a media organisation one has to register under the companies Act and register ith Zimbabwe Media Commission (ZMC) after meeting and declaring to adhere to the Access to Information and Protection of Privacy Act (AIPPA) This therefore seems to be the most ideal as there are checks and balances to keep and maintain standards unlike a situation where people without guidelines. From the above discussion, the writer believes that in the world there is no economic system that is entirely or purely traditional, command or free market.

All economic systems have a mixture of government control, traditional tenets and market influence. References Lipsey,R. Courant,P. ,Purvis, D & Steiner,P. (1995), Macro economics:10th Edition, New York : Harper Collins College Publishers Mohr, P. , Fourie,L & Associates (2004) Economics for South Africa: 3rd Edition, Pretoria: Van Schaik Mulhrearn, C & Howard, R. V. (1999) Economics, New York:PALGRAVE MACMILLAN

Cite this Types of Economies

Types of Economies. (2016, Oct 13). Retrieved from https://graduateway.com/types-of-economies/

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