Property Rights, Competition, and Profit in Different Econom

Roles of Property Rights, Competition, and Profit in Different Economic Systems

Competition

Profit

Property Rights

Market Economies

Traditional Economies

• Competition is a very important characteristic.
• Competition pushes innovation forward and causes different companies to want to be more efficient (Amadeo, Market Economy…).

• Competition does not play much of a role.
• In traditional economies, groups often provide for themselves, so there is not much trade.
• Trade is a source of competition, so without trade, there is not a lot of competition (Amadeo, 5 Traits…).

Market Economies

Traditional Economies

• Profits plays an important role.
• Profits are kept by businesses, so desire for more profits helps to drive the economy forward (Amadeo, Mixed Economy…).

• Property rights are protected by the government in this economy.
• Desire for more property helps to drive the economy forward (Amadeo, Mixed Economy...).

Mixed Economies

• Profits also do not play as large a role in traditional economies.
• Choices are made in ways that follow tradition instead of desire for more profits (Amadeo, 5 Traits…).

Command Economies

• Whether or not there are property rights depends on the traditions of the economy.
• In some groups property is communal, so there are no strong property rights.
• In other groups, property can be owned by individuals, so there are property rights (Amadea, 5 Traits...).

• Competition does not play an important role.
• The government dictates what will be produced and is the only supplier of products, so there is no competition (Command).

• Competition is also very critical to mixed economies, but it can be restricted by the government to prevent things like monopolies from forming.
• Competition helps to drive innovation and efficiency (Amadeo, Mixed Economy…).

Mixed Economies

Command Economies

• There are no property rights.
• Everything belongs to the government (Command).

• Profits are also very important to a market economy.
• Businesses also get to keep profits in these economies, so the desire for more profit helps to drive the businesses in this economy too (Amadeo, Mixed Economy…).

• Profits do not play as important a part in command economies.
• The government gets to keep all the profits, so individuals are not driven forward with the incentive of profit, which would otherwise have a large effect on the economy (Command).

• Property rights are also protected by the government in mixed economies.
• Desire for more property protected under property rights also helps to drive the economy forward (Amadeo, Mixed Economy...).

Works Cited

Agarwal, Prateek. “The Four Types of Economies.” Intelligent Economist, Intelligent Economist, 20 Oct. 2017, www.intelligenteconomist.com/types-of-economies/. Accessed 27 Oct. 2017.

Amadeo, Kimberly. “Market Economy: Characteristics Examples, Pros, Cons.” The Balance, The Balance, 12 Sept. 2017, www.thebalance.com/market-economy-characteristics-examples-pros-cons-3305586. Accessed 27 Oct. 2017.

Amadeo, Kimberly. “5 Traits of a Traditional Economy.” The Balance, The Balance, 12 July 2017, www.thebalance.com/traditional-economy-definition-examples-pros-cons-3305587. Accessed 27 Oct. 2017.

Amadeo, Kimberly. “Mixed Economy: Definition, Pros, Cons, Examples” The Balance, The Balance, 11 Sept. 2017, www.thebalance.com/mixed-economy-definition-pros-cons-examples-3305594. Accessed 27 Oct. 2017.

Arm Wrestling Competition. Digital image. N.p., n.d. Web. 12 Jan. 2018. <https://pixabay.com/p-1020222/?no_redirect>.

“Command Economy.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., 10 Feb. 2017, www.britannica.com/topic/command-economy. Accessed 27 Oct. 2017.

Property. Digital image. N.p., n.d. Web. 12 Jan. 2018. <http://www.thebluediamondgallery.com/dictionary/property.jpg>.

Stack of money. Digital image. N.p., n.d. Web. 12 Jan. 2018. <https://c1.staticflickr.com/9/8821/17121925920_f09ccf01fc_b.jpg>.

“What Is a Market Economy? Definition and Meaning.” BusinessDictionary.com, www.businessdictionary.com/definition/market-economy.html. Accessed 27 Oct. 2017.