Economy Systems

III.

ECONOMIC SYSTEMS

All organized communities mix, in various proportions, market activity and government intervention. Private markets themselves differ widely in the degree of competition under which they operate, all the way from single-firm monopolies to the fierce rivalry among hundreds of retailers. Much the same point applies to government intervention, which ranges from mild and comparatively uncoercive manipulation of tax, credit, contract, and subsidy policies through mandatory controls over wages and prices to the detailed central planning of Communist countries.

Even those societies most completely committed to central planning, however, grudgingly modify official ideology by some concessions to private enterprise. For example, the USSR allowed its farmers, although organized in collective enterprises, to market crops grown on their own small plots. During the Communist period in Poland, most farming was in the hands of individual owners. The former Yugoslavia experimented in worker management of factories during its Communist period.

Similar variation exists among capitalist economies. In most of them, the government owns and operates railroads and airlines. Even where outright government ownership or operation is exceptional, as in Japan, the central government exerts tremendous influence over economic activity. The United States, the most devoted of major capitalist economies to free enterprise, has nevertheless rescued faltering corporations such as Lockheed and Chrysler and has, for all practical purposes, converted a number of major defense contractors into federal subsidiaries. Many American economists have come to accept the concept of a “mixed economy,”