Question

you're hired to bring a fresh perspective into the current structure and outcomes of the economic system. The project requires you all to agree on:

a) Which should be the Mission of the economic system, what should be the Values that guide the economic system, and which should be the Vision of the economic system. Explain the reason WHY behind each point.

b) Which should be the Role of companies, government, organizations, social movements and citizens in the economic system. Explain the reason WHY behind each point.

c) How institutions (legal norms and social norms) can allow the materialization and right functioning of this economic system. The legal system and the social norms are like the glue that makes sure that the behavior of the economic agents stays on track.

Identify, which are the main laws and social norms that would ensure that the mission, vision, values of your economy are met and that the role of each of the economic agents identified can be properly achieved as well. Explain the reason WHY behind each point.

For instance, which are the first points of the Constitution of your economy that ensure that the behavior of the economic agents is the expected one?. Regarding the social norms it means which are the two or three most important unwritten rules of behavior that are considered accepted and right in your economy that everybody respects?.

Answer 1

The mission of any of the economic system should be the welfare of the humanity. every econo mic activity should focus on satisfaction of human needs The limited resources should be uti lised for the maxi mum satisfaction of the entire humanity. Because if we take capitalism or socialism there are various factors whichcan be miscalculated or misused. For example in a capitalist economy if the capitalists focus only to maxi mise their profit then there willbe public unrest everywhere which will lead to total destruction of the economy.

The values that guide the economic system should be just distribution of the economic resources among all. There should not be poverty in any part of the world. People should be free to use their talents for the welfare of all. There should be acceptance of common brotherhood without any discrimination on the basis of colour, race or region. It is the just distribution which will satisfy everyone. It will encourage total utilisation of entrepreneurial talent. The freedom to exercise talents will bring out more innovations and inventions. Lack of discrimination will help mobilisation of labour.

Vision of the economic system should be to give pro per answer to the basic economic questions; what to produce ? how to produce? and whom to produce?Since resouces are scarce optimum allocaton is essential. These economic questions are the 'backbone' of the economy and so all the economic activities should keep this vision.

b) The role of compa nes in any economic system should be to produce maximum utilising available resources satisying the consumers. Because only then economy will move forward. Without it economic development can"t attain.The role of government is to use various measures like monetory policies fiscal policies etc to fulfil the above mission with the vision. Because without the government intervention our vision will not be achieved. The role of organistion is to invent and innovate new techniques to maximse the production. Since capital is very important the organisation should try their best to find new techniques .The social movements also can play an important role to attend the vision of economic development because this movements can contribute to foster the production or to regularise government intervention.Every citizen has a role to stand for the common welfare of attaining maximum satisfaction with the limited resources since each citizen decides what to consume they have an important role to consume those products which will foster the development of economy

c)c)The legal and social institution can materialise the mission and vision of the economic system through various programes of public importance .Government controls directly the economic variables in various economic systems according totheir loss and norms.Government decisions according to the state of the economy is very important during the time of inflation and recession.Discretionary physical policy and the monitoring policy should be used.The norms of behaviour are used in such a way that the basic economic questions will be answered for the common well being of economy