The Three Major Economic Systems

Free Market Capitalism

Free market capitalism is an economic system in which the production and distribution of goods and services is largely determined by the interaction of private individuals and businesses, with minimal government intervention. The key features of free market capitalism include private property rights, freedom of contract, and freedom of competition.

Command (State-Controlled) Economy

In a command economy, the government centrally plans and controls the production and distribution of goods and services. The government owns and operates most of the businesses, and it sets prices, wages, and production quotas. Individuals and businesses have little economic freedom in a command economy.

Mixed Economy

A mixed economy is an economic system that combines elements of both free market capitalism and command economy. The government plays a significant role in the economy, but it does not own and operate all of the businesses. Individuals and businesses have more economic freedom than in a command economy, but the government still has a significant degree of control over the economy.