Question

Is it generally true that economic systems reflect the laws and values of government, the interest of businesses or citizens ?

Explain why private firms can't produce a public good (in less than 25 words)

Name at least two flaws in democracies

Answer 1

A).True.An economic system is a process of organising a country's utilisation of resources, distribution of wealth and income ,imparting goods and services to public .There are different economic systems that are now operating around the world. Capitalist economic system,mixed ecosystem, socialist economic system,command economic system etc.

In a capitalist economy we see 'ends justifying means' it means the private people have only one motto that is to acquire maximum profits and they least bother about social welfare ,so it clearly reflects the interest of business here.

In a mixed economy we see the participation of both government and private individuals where we can clearly observe that the government wants social security on par with the country's development. It reflects the values and laws of the government .

In North Korea where command economy is existing we see closure of all economic ties with the outside world ,it's only based on production but not on free market . It clearly reflects the state of its citizens.

In a socialist which produces goods and services for their own utilisation we can see the reflection of economic policy mixed with the rights of citizens .

This how the economic systems define the laws and values of government,interest of business, citizens' rights etc.

B) A private firm's motive is to earn profits but not serving public . Hence they don't invest on anything that doesn't fetch them income. There will be no returns once you spend on a public good which is against to the the very foundation of a private firm.

C) Unlike direct democracies ,in a representative democracy people bestow power to elected representatives to formulate laws who in turn may not fulfill their promises after election that eventually affects every individual, people have to urge many bureaucrats and administrators in order to avail their benefits for example ,in India if a particular old person is not granted a pension for various reasons she has to approach at village level first ,if it's not solved then at intermediary level and so on. Sometimes freedom of voice can be curtailed that is Media can be controlled by banning particular news channel to the benefit of government. etc are some of democarcies' flaws.

Thank you.