Economic Model

ECONOMIC MODEL

Student’s Name

Institution of Affiliation

Date of Submission

Several countries around the world, including Canada, depend on a mixed market economy system where the distribution of most resources, goods and services is determined by supply and demand through markets and prices. This system has numerous faults, including environmental damage, high income disparity both within and between countries, resource exhaustion and so on.

When I think of alternative economic system, I have to go back to the basics of mixed economic system, what actually is and what it does. In every kind of society we have to consider two things; how it produces goods and services and how these goods and services are distributed.one of the flaws of is that it tends to learn more on the governmental control than the freedom of individuals. Sometimes, government regulations may affect companies greatly that it pushes them off the market hence paralyzing production features. This encourages social democratic programs which retain capitalist’s mode of production. The program also retain matters of capitalism such as dubious fluctuations, manipulation and alienation.

Another government shortcoming is that it chooses the sum of tax to be paid products which may lead to hike of the prices of such products hence people unwillingness to buy. Lack of price mechanism control can lead to deficiencies in goods hence bringing market imbalance.

Social democracy is mostly blemished for upholding a property-owning capitalist class which actively reverse social democratic policies and misappropriate amount of power of society to influence government. Most critics argues that social democracy didn’t apply Marxism and restrained socialism in economy thus encouraging capitalism instead. Social programs were meant to upgrade capitalism concerns for example unemployment welfares, profits taxation and limiting efficiency of capitalists by plummeting inducements for capitalists to participate in the production. However, eradicating capitalism in the economy, would sabotage it more. For example, by reducing unemployment would result into inflation in the market and also offering job security would disintegrate labor discipline.

Social democracy is different to market socialism in the sense that, social democracy tries to achieve social and economic impartiality by government-levied taxes and the subsidies they give to privately owned premises hence promoting a property-owned capitalists who disproportionate the power in the society in influence of the government. Market socialism can do that by changing the ownership of the enterprise and its organization (Aversa, 2013).

A perfect economic system involves all factors existing in any market system for production and marketing of goods or services (Belolipetskii, 1992). According to aforementioned information of economic system, the factors which have the extreme effect on the economic development include workers, maximum productions, labor time, and flexible costs. In a bid to eradicate this social and economic imbalances, I came up with a theoretical economic model which solves the shortcomings of free-market and capitalism in the society. A perfect economic environment focuses on the following; employment and social integration support, development of human resources, adaptation of potential enterprises and healthcare of workers, the quality of education, opening labor market for everyone.