The concept of the economic system covers the whole range of methods by which the economic and economic processes of a particular society are organized: the creation of material wealth, the use of the country's useful natural resources, the distribution and consumption of the final product, and so on. The most ancient The type of management in human history is the so-called traditional system. It arose from the Neolithic revolution, when the first cattle-breeding and agricultural civilizations arose, and had no alternative until the emergence and development of capitalism in Europe, from the XV-XVI centuries. A characteristic feature of the traditional economic system is the high taboo of the society, its adherence to traditions. It is the considerations of tradition that determine the main questions: what, what to produce and how to distribute later. Such management is accompanied by the archaic technologies, the use of manual labor, the weak development of commodity-money relations (or none at all). Today, such examples can be observed in the underdeveloped states of the planet.
Characteristics of a market economy
As already mentioned, this type of management arose in modern Europe. It was the result of the evolution of feudalism, of great geographical discoveries, of the so-called initial accumulation of capital (the appearance in Europe of a large quantity of silver and gold plundered in the colonies) and, of course, the scientific and technological revolution. In fact, the most important characteristics of a market economy are the result of its decentralization. For a long time, a competing alternative to the free market of the West was a command-planned economy (implemented in fascist states, later - in socialist countries). Its distinctive feature was that all economic issues were decided by the central government and were strictly subordinated to state needs. All elements of the financial system and production (banks, factories, plants) were subject to nationalization. In contrast to this scenario, a characteristic feature of the market economy is the multistructure of forms of ownership (private, collective, public and, of course, the public sector is also present). The government in such conditions acts as a guarantor of constitutional norms and equal opportunities, but does not directly interfere in the economic life of the country and has no direct influence on a number of processes.
Negative moments of the system
It should be noted that there are also negative characteristics Market economy. These include weak social protection, deplorable position of the categories of the population, which are not market-oriented (scientists, teachers). The consequence of free competition, in addition to reviving the economic life of society and improving the quality of life, is that over time the winners of this competition become powerful enough to interfere in the political and social life of the country. The large-scale crises and depressions of the Western world in the 20th century fully revealed also the negative characteristics of a market economy. For this reason, all progressive modern states have today a so-called mixed type of management, in which governments even encourage the life of the free market, but still retain significant levers of influence on the economy, and also take care of social guarantees in the country.