Question

Question 1 A: Suppose that there is a small new forming nation. Their government is trying to decide what type of economic system would be best to follow. Should they follow democracy or capitalism? Explain which one they should follow and why. Also don't forget to not only answer the question but to also respond to two of your classmates as well as me.v

Answer 1

Question 1) Capitalism is that type of economic system where people are free to make economic decisions such as freedom to own, buy and sell private property, trade with the objective of maximising profits without any intervention by the government rather than maximise social welfare. So, when there is less government intervention, people would get more incentive to work hard and earn profits and be more productive. Democracy is such a political system where there is political freedom in the economy, i.e people would have the right to vote and choose their own government, they would also have freedom to speech to express their opinions of the government. Now, if there is a new forming nation, I believe that the government should inculcate both democracy and capitalism in their economic system as both democracy and capitalism are interrelated to one another. If there is democracy in a society, there should be capitalism too since if one has political freedom in the economy, they should have economic freedom to make decisions too. If for example say in a socialist economy, people depend on the government for their needs, they can't own any private property. So, if they depend on the government so much, they can't oppose the government when they would feel that the government is not doing something right, so an economy needs to be a capitalistic economy for the people can then make decisions on their own and would have the courage to speak up when they would feel that the government is not doing something right for the people of the nation.