You might have heard the terms “capitalism” and “socialism”, when you are studying economics. But, did you know that there are different models within capitalism and socialism? Yes, there are certain models based on whether the country’s economy is market oriented or socialist in nature. In the present times of recession and fiercely competitive market environment, it is very interesting to know the nature of different economies in the contemporary global economy.
Before we learn about the different models of capitalism, let us acquaint ourselves with some basic terms pertaining to different types of economies that were prevalent in the past, and that are seen in the contemporary global economy. The national economies can be organized based on the ownership of capital. In capitalism system of economy, the capital is owned by private individuals or companies. Whereas, in a socialism system, the capital is owned by the government or society. In a democratic socialism, the government is accountable to the people. Whereas, in totalitarian socialism, also called communism or bureaucratic collectivism, the government is not accountable to the people. If the government is a dictatorship, the system is called communism. In a mixed economy, some part of the capital is owned private individuals and some part by the government.
However, the
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The German economy has some characteristics similar to those of America and Japan. Germany mainly focuses on exports, national savings and investments more than consumption. The country permits the market to function with considerable freedom. The German economy is mainly dominated by alliances between large corporations and major private banks. The national system of political economy attempts to balance social concerns and market efficiency. The private sector provides an orderly developed system of social welfare