In: Finance
there are essentially three types of economies, state capitalism, social capitalism and private capitalism. In the United States we use a form of private capitalism, but can you explain the difference between the three forms of capitalism? Which form do you think is best and why?
Answer-
Social capitalism is a system in where the private owners are induced to act in a manner not to accumulate wealth but to make social improvements.
In state capitalism organizations are devoid of their rights to the representation of their interests and are forced to be incorporated into the planned system. The heads of the bigger organizations becomes subordinate government agencies.
The private capitalism where the ownership of capital goods and the investments are determined by private organizations heads or managwement and the prices, production targets, and the distribution of goods is mainly driven by competition in a free market.
The private capitalism is the best way of ownership as
the organizations are given free hand to decision making and growth
is higher as most of the regulations are not stringent unlike the
other two. The policies dictated by governements are comparatively
less and this helps the companies to grow and generate more
employement.
This lenient regulations helps the organizations to grow which can
contribute to goverment by paying more taxes that helps the
countries to prosper. These organizations provide huge employement
and raises the GDP of the economy.