Economic Systems: Capitalism, Socialism, Globalization & Labor
Economic Systems and Global Markets
The state is a key public agent in the economy, aiming to benefit the largest number of people.
Economic Systems
Economic systems are methods of organizing and conducting economic activity. The main systems include:
Socialist Systems
Also known as communist or centrally planned economies, these systems are organized by the state. The state determines production, distribution, prices, and worker compensation.
Capitalist Systems
In capitalism, economic activity is regulated by the market, not the state. Prices are determined by supply and demand in a competitive environment. Companies aim to maximize profit, leading to competition. However, monopolies, oligopolies, and insufficient investments can cause issues.
Globalization
Since 1990, new liberal policies and the pursuit of maximum profit have driven globalization. This process integrates national economies into a more favorable global market.
Factors Enabling Globalization:
- Telecommunications: Real-time information and global communication.
- Transportation: Improved movement of goods and people, expanding company influence.
Institutions also promote the global economy.
Impact of Globalization on Economic Activity:
Production is planned globally, and consumption patterns are becoming more uniform.
Geo-Economic Regions
1. The Triad Countries
Features: Highly mechanized agriculture, high consumption due to high living standards, leaders in manufacturing, services, technology, and capital exchanges.
2. Emerging Countries
Features: Rapid economic growth, significant role in global trade, export of traditional and high-tech goods, agriculture is still important.
3. Regional Economic Activity Centers
Features: Developed countries with concentrated economic activity, rich in natural resources or developed industries, export agricultural products.
4. Underdeveloped Regions
Features: Traditional agricultural production, less advanced industry, low consumption due to low living standards (e.g., South America, Asia, Sub-Saharan Africa).
Labor Market
Work is the effort people make to produce wealth. It is essential for companies to produce goods and services and for workers to earn a salary.
Population Groups:
- Active Population: Employed individuals providing labor and services, or those available for work.
- Inactive Population: Individuals not employed and not available for work.
- Activity Rate: Percentage of the active population compared to the total working-age population.
- Unemployment Rate: Percentage of the active population without a job.
The labor market involves the supply and demand for work (companies and people).
Types of Workers:
- Qualified Workers: Require training, have more stable jobs, and opportunities for promotion.
- Non-Qualified Workers: More abundant, lower wages, require no training.
Globalization affects labor markets by increasing temporary contracts and remote work.
Current Labor Market Problems:
Unemployment, discrimination, and child labor.