Economic models in general terms represent stable socio-economic relations and relations between economic entities that have developed on the basis of prevailing forms of ownership and methods of regulating macroeconomic activity. Economic entities may include households, firms, and the state.
Over the past two hundred years, four global economic models have predominantly operated in the world. These are two systems with a dominant market economy - pure capitalism and modern capitalism, and two systems of the non-market type - administrative-command and traditional. And already within the framework of one or another general economic model, various models of economic development of individual regions and countries are distinguished. The following are general descriptions of global economies.
Traditional system
This type of management prevails in underdeveloped countries and implies a low level of technological development, the widespread prevalence of manual labor and a multi-warehouse economy, which manifests itself in the coexistence of various economic forms. Naturally-communal forms of production and distribution of products are often preserved. In the economy, a significant role is given to small-scale production, represented by numerous handicraft and peasant farms.
In the national economy, functioning according to the traditional system, foreign capital plays a decisive role. The social structure of society in this case depends entirely on centuries-old foundations and traditions, caste, estate - which significantly inhibits socio-economic development.
Administrative command system
Economic models of the type of administrative command were adopted in all countries of the socialist camp (primarily in the USSR) and in some countries of Asia.
Distinctive features of this type of management can be called the following:
- ownership of economic resources - state,
- bureaucratization and state monopolization of the economy,
- the basis of economic activity is centralized economic planning;
- needs, supply and demand were determined by centralized planning departments, without the participation of direct consumers and producers, based on a common political ideology.
Pure capitalism
This model operated in the 18-19 centuries and was a system of market economy with pure competition. Economic activity was carried out by sole proprietor capitalists and, accordingly, they owned property rights. Self-regulation of private capital on the basis of free markets took place, and the state minimally intervened in this process. Wage workers actually lacked social protection in the event of unemployment, old age, or illness.
Modern capitalism
By the middle of the 20th century, with the advent of the scientific and technological revolution, the rapid development of social, technical and industrial infrastructures, state structures began to participate much more actively in the development of the national economy. Pure capitalism is gradually being transformed into a system of developed modern capitalism. Within the framework of this system, national economic models arose that received their specific features based on the characteristics of social, national, geographical and historical conditions. We will analyze some of them.
American model
- active promotion of small business (about 80% of all new jobs are created by small businesses);
- the state minimally intervenes in the regulation of the economy;
- state ownership is represented very little in the total volume of ownership forms;
- pronounced stratification of society into classes of rich and poor;
- satisfactory standard of living and social security of poor citizens.
Japanese economic model
- the active influence of the state on the development of the economy with mandatory planning for this development (five-year plans are drawn up for individual areas of the economy);
- the size of wages for ordinary employees and company managers differs very slightly, so the income level of the population is quite uniform;
- the economy has a pronounced social orientation (the practice of lifelong hiring, social partnership, etc.).
South Korean model
- state planning, development of five-year plans;
- tight regulation of foreign economic activity in order to develop exports and minimize imports;
- state control in the banking sector.
Chinese model
- the coexistence of a market and administrative economy ;
- maintaining free economic zones;
- equal income level of the population;
- the importance of households;
- Chinese emigrants are actively helping the development of the national economy.