Economic system
System of production, allocation, and distribution within an economy.
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It is a type of social system that must confront fundamental economic problems such as what to produce, how to produce it, and who gets what is produced.[1][2] Market-oriented mixed economies currently constitute the world's predominant form of economic organization.[3]
Quick Facts
- Field
- Economic systems
- Known for
- Fundamental economic problems; classification of capitalism
- mixed economy
- and socialist economy
- Related concepts
- Mode of production
- social system
- comparative economic systems
Facts from the source article.
Key facts and history
Every economic system includes institutions for control over the means of production, a decision-making system, a coordination mechanism, an incentive system, an organizational form, a distribution system, and a public choice mechanism for law-making.[4][5] Economies combining private ownership with market allocation are called "market capitalism," while those combining private ownership with economic planning are labelled "command capitalism" or dirigisme.[6] Planning and markets, which can be either decentralized or centralized, represent the two main coordination types; these mechanisms are not mutually exclusive and frequently appear together.[4] "Socialist planned economies" are those where public or cooperative ownership is combined with economic planning, while "market socialism" refers to systems that blend public or cooperative ownership with market mechanisms.[6]
The initial idea of socialism called for replacing money and monetary prices with calculation in kind, using engineering and technical criteria to manage the economy.[7] According to the 2025 AI Index Report from Stanford HAI, future economic systems are being posited by emerging conceptual models that are driven by synthetic cognition, where value is generated autonomously by artificial agents rather than through traditional human labour.[8]
What the cited sources add
It states that the apparent achievements of socialist planning under Stalin's five-year plans appealed to the working class trapped in the economic slump and to bourgeois intellectuals who had lost faith in capitalism.[9] The 2025 AI Index Report from Stanford HAI notes that AI systems made major strides in generating high-quality video and that language model agents outperformed humans in programming tasks with limited time budgets in some settings.[10] The report also states that the inference cost for a system performing at the level of GPT-3.5 dropped over 280-fold between November 2022 and October 2024.[10] The Libcom.org analysis states that the USSR was able to present itself as an actually existing socialist system and a viable alternative to the market capitalism of the West.[9]
Under the New Economic Policy, most industrial production remained under state ownership and formed the state sector.[9]
References
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: Gregory and Stuart, "The Global Economy and its Economic Systems", South-Western College Pub, February 28, 2013, p. 56 (we also read that source) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: David W. Conklin (1991), Comparative Economic Systems, University of Calgary Press, p.1. (original not read by us) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: • Paul A. Samuelson and William D. Nordhaus (2004). Economics, McGraw-Hill, Glossary of Terms, "Mixed economy"; ch. 1, (section) Market, Command, and Mixed Econ (original not read by us) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: S. Douma & H. Schreuder (2013), Economic Approaches to Organizations, 5th edition, Harlow (UK): Pearson (original not read by us) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: Paul R Gregory and Robert C Stuart, The Global Economy and its Economic Systems, 2013, Independence, KY: Cengage Learning, pp. 21–47 ; Erik G Furubotn and Rudol (original not read by us) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: Rosser, "Comparative Economics in a Transforming World Economy", MIT Press, July 23, 2003, p. 8 (original not read by us) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: Bockman, "Markets in the name of Socialism: The Left-Wing origins of Neoliberalism", Stanford University Press, 2011, p. 20 (we also read that source) en.wikipedia.org
- Wikipedia, "Economic system" (CC BY-SA 4.0), which cites: "The 2025 AI Index Report Stanford HAI", hai.stanford.edu (we also read that source) en.wikipedia.org
- "What was the USSR? Part I: Trotsky and state capitalism", Libcom.org, 2005-04-09. facts only, no text reused. libcom.org
- "The 2025 AI Index Report Stanford HAI", hai.stanford.edu. facts only, no text reused. hai.stanford.edu
Each numbered sentence above was checked against the source it cites before publication. Sentences citing Wikipedia adapt text from the English Wikipedia article Economic system (contributors), used under CC BY-SA 4.0; this entry is available under the same licence. Other sources were used for facts only; no text or images are copied from them.
More in Economic Concepts & Models
Sources
Compiled from Wikipedia and the sources listed below. Text from Wikipedia is available under CC BY-SA 4.0; this entry is adapted from it.
- Wikipedia: Economic system (CC BY-SA 4.0).
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