Social Economic System / System Centralized Economic / Social Economic Systems

Social Economic System / System Centralized Economic / Social Economic Systems

 Socialist economic system called the centralized economic system. Why is it called centralized? Because everything has to be regulated by the state, and was commanded from the center. The government-controlled all economic activity. Socialist economic system is an economic system that requires the prosperity of society equally and economic oppression. To achieve equitable prosperity that government should intervene in the economy. Therefore, these results and the potential for creativity people will die and the absence of individual freedom in economic activity.
The basis of the economic system is socialist teachings of Karl Marx, in which he argued that when private property was abolished it would not bring a class-class communities that will benefit all parties. Countries that adopt this system such as Russia, Cuba, North Korea and other communist states. Socialist economic system has the following characteristics.1) All economic resources owned and controlled by the state.2) All economic activities have grown together. All state-owned enterprises so that no private company.3) All decisions regarding the amount and type of goods is determined by the government.4) The prices and distribution of goods are controlled by the state.5) All of the residents are employees of the state.
 Just as the capitalist economic system, socialist economic system also has advantages and disadvantages. Excess socialist economic system:1) All the activities and problems of the state-controlled economy that the government is easy to supervise the course of the economy.2) There is no economic gap between the rich and the poor, because the distribution of government can be done evenly.3) The government could more easily make arrangements for goods and services to be produced in accordance with the needs of the community.4) The government is easier to intervene in price formation.
 Disadvantages socialist economic system:1) Turn off the creativity and innovation of individuals.2) There is no freedom to have the resources.3) Lack of variation in the production of goods, because it is limited to government regulations.
 Countries that adopted socialist economic system no longer exists. Soviet Union (now Russia) and his followers countries have failed in implementing the principles of socialism as a way of life both economically, morally, and socially and politically. This is caused by the absence of central government's ability to handle all the problems that arise, both at the central and local level. Moreover, the fact that there have been many abuses committed by the government.