Economies Planned and Unplanned Economies

Economies

Planned and unplanned economies

Capitalism and socialism are differentiated with certain unique ingredients such as central planning, market regulations and the types of resource ownership. Pure capitalism is, therefore, characterized by market and private property, contrary to socialism that consists central planning and the public property models. In the current world of today, different countries have adopted either economic system. However, there is no single system that will strictly adhere in pure economic position, because of the fact that all economies are mixed economies confirming the blend between capitalism and socialism.

As capitalism is related to private ownership in terms of production, and reliance on the market system, socialism has features of public ownerships of property and modes of production and also relies on planning from centralized organs of state. Regardless of this reality, there is no existence of an ideal economic system. This means that the systems borrow features and ideas from each other, both theoretically and practically. There are numerous examples to support these notions. One instance is the African socialism under Julius Nyerere, the capitalist economy of Japan which is dynamic, the French socialism especially in the 1980's and many others. Despite recognizing themselves to a single economic system say the socialist one, the mentioned economies do integrate different ideologies which are in most cases borrowed.

Every country is learning from the other, adopting institutions and methods that have proven to be successful. Countries with the capitalist economic system can adopt socialism in ways such as adopting of planning strategies for their production of goods and services, allowing the government to take part in decision making and centralizing their economies to state organs. Key institutions such as industries and banks are nationalized to ensure central governance of the economy. On the other hand, socialist economies are adopting market incentives from decentralized organs of state, allowing private businesses to sprout and develop, leading to a mixture of the socialist and capitalist features. These convergences lead to mixed economies.

Globalization and the U.S. Economy

Outsourcing is a result of the current globalization rate, due to rise of internet users and communication through broadband. In actual sense, outsourcing is inevitable, and no one is going to eliminate it any time soon, including the United States. However, outsourcing will mean loss of jobs in the United States, leading to a position where these jobs need to be replaced. This is because outsourcing results into competitive businesses, leading to profit and export increase and also increases the opportunities for investments in other countries, different from the source country such as the U.S. In the last decade manufacturing jobs have been moving out of the United States, and this can hardly be prevented. In fact, outsourcing of manufacturing jobs has greatly destroyed the middle class Americans, hence undermining the performance of their economy in general. Competition is mounting on the workers especially the services sectors due to the large-scale exportation of white collar jobs to other nations at the outlaying the American worker.

The one price rule in U.S.