Question

Answer coherently about these topics and use keywords, information, dates, and concepts.

identify and explain the differences between the three main economic forms: Mercantilism, Capitalism, and Socialism. What eras are they related to in regards to colonialism, industrialization, and the modern world? Name some individuals associated with these different "isms". How have they evolved and changed with time. How do these economic models treat the main economic factors like free trade, and ownership of capital? How are these economic models used in the modern sense. Finally, what are some pros and cons of each model? Be specific and use examples.

Answer 1

Answer:

Mercantilism

The concept of Mercantilism can be defined as the economic nationalism with the objective of building a powerful and wealthy state. The term was coined by Adam Smith that explains the system of political economy sought to enrich the country by limiting imports and encouraging exports. This trend of mercantilism dominated Western European economic thought and policies from the sixteenth to the late eighteenth centuries. The objective of these policies was to achieve a “favorable” balance of trade that would bring gold and silver into the country along with maintaining domestic employment. In contrast to the capitalism of the nineteenth and early twentieth centuries, the mercantile system served the interests of merchants and producers such as the British East India Company. The activities of British East India Company were protected or encouraged by the state.

Capitalism

Capitalism is an economic system based on the premise of private ownership of the means of production with the ultimate objective of earning profit. The basic traits of capitalism include capital accumulation, competitive markets, a price system, private property voluntary exchange and wage labor. In a capitalist market economy, prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

Economists, political, historians, economists and sociologists have adopted different perspectives in their analyses of capitalism . This includesr free-market capitalism , state capitalism and welfare capitalism. The various forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition and state-sanctioned social policies. The intensity/degree of competition in markets and the role of intervention and regulation in addition to the scope of state ownership vary across different models of capitalism. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning.

Market economies have been existing under many forms of government and in many different times, places and cultures. Modern capitalist societies were developed in Western Europe in a process that led to the Industrial Revolution. Thereafter Capitalist systems with varying intensity/degrees of direct government intervention have since become dominant in the Western world.

Critics of capitalism put forth their ideas that it establishes power in the hands of a minority capitalist class that exploites majority working class and their labor, gives priority to profit over social good, natural resources and the environment. It is also considered an engine of inequality, corruption and economic instabilities. While supporters of capitalism argue that it provides better products and innovation through competition. Further, it promotes pluralism and decentralization of power, disperses wealth to people who deserves it.

Socialism

The concept of socialism is characterized by social ownership and operation of the means of production for the purpose of social good rather than profit and that may take the form of autonomous cooperatives or direct public ownership. When planning is utilized, the economic system is designated as a socialist planned economy.

Socialist economics is related with different schools of economic thought. Marxian economics provided a foundation for socialism whereas neoclassical economics and evolutionary economics provided comprehensive models of socialism.

Nineteenth century American anarchist Benjamin Tucker connected the classical economics of Adam Smith and the Ricardian socialists as well as that of Pierre-Joseph Proudhon, Karl Marx and Josiah Warren to socialism. It is believed that there are two schools of socialist thought, namely anarchist socialism and state socialism.