Question

How is the market form of economic organization known as capitalism able to adjust to a changing landscape? In other words, what mechanisms are at work in the market system which enable it to adjust to change?  

Describe how each mechanism works.

How does the Socialist Commonwealth adjust to change?

Answer 1

World is changing economically, socially, politically and many other ways. Most of the developed countries follow capitalism as their market structure. Profit maximisation without state intervention was the most important aim of the state. So most of the developing countries will easily cop up with the changes. For example, the intervention of computers was very spontaneously accepted by these countries. People in these countries were learned to make things very quickly and cheaply. Material comforts increased dramatically among the middle class people which lead to rapid growth. A large number of people come out from poverty in these capitalist countries and make them possible to engage in works that create macroeconomic values even small farmers also.
In case of socialist states, government played an important role in every economic, social, political and cultural activity. Most of the socialist changes are slow and gradual. It took long time to accept the change. The government enterprises give more preference for all activities which is directly or indirectly affect the living conditions of the people. The policies formulated under this system were welfare maximisation not the profit. So government or the authority took long time to evaluate the policy before its implementation. This make the procedure took long time and the change become gradual.