The economy is a broad term used to refer to the production, manufacture, distribution plus sales and consumption of goods or services in a given area. Human life survival is predicated on these fundamentals that have to be balanced cohesively for people to co-exist. Financial systems have evolved with generations and different civilizations that have lived on earth. An economic system simply denotes the method through which the above activities are carried out to arrive at a common purpose. Good instances of these systems include communism, socialist beliefs plus capitalist beliefs or hybrids of all these. They have all been applied with changes being adopted as time has continued to move. Earlier civilizations believed in communism plus socialism which have remained predominant until the inception of the capitalist concept in modern days.
Human beings had never believed that there would be a time when people could have the freedom to have wealth at the expense of others who are still poor. Goods and services were produced communally in communist economies with sharing done equally. No individual has the full right to any factor in production, meaning that every citizen is treated equally. Socialist beliefs defer from the communists in that here resources are owned socially, though there is a freedom to grow wealth which is heavily controlled by authorities. The focus of such a system is to ensure people are given equal social amenities to every citizen despite their social standing. Rich people are heavily taxed to build good schools for all plus quality health care systems and general infrastructure.
Capitalism is new, which came to replace the above systems that were seen to be choking especially for personal growth. The first principle in this concept is that human beings should have the freedom to get wealthy without limits by competing through using factors of production. It defers from other beliefs since it does not care about equality or offers essential needs. Capitalists are only focused on the profits that they stand to make, and not their love for humanity. Don’t confuse mass production of food as a concern to provide for the needs of people. Capitalist societies are okay with a few individuals getting excessive wealth at the expense of millions of poor citizens who lack basic things like food or water or access to education.
This system is seen as punitive since it does not offer human dignity and has led to growth of huge financial gaps in societies. While it’s okay to allow investors who work hard to get wealthy, the poor should also be factored in through allocation of resources. An attempt to move away from capitalism means that leaders should start taking a different step in their policies to include every citizen. A good approach would be to adopt democratic socialism which is a critical balance between capitalism and socialism. Basics of capitalism should be maintained like freedom to work and get wealthy without unfair taxes. States should ensure equality by providing equal services plus environments for financial growth. A thriving high class must support the middle class that in turn has to help the lower class to thrive.