ECONOMICS ON THE SPECTRUM
Economics is the study of how societies handle the distribution of money (wealth) and the production of goods and services. There are several different types of economic systems that historians and economists have identified throughout history, but the study of economics is usually centered around two main concepts, which include microeconomics and macroeconomics. Some key elements of any economic system which are important to understand are supply and demand, the boom and bust cycle, employment and government intervention.
In general, most economic theories are based on the degree of control the government should have in the economy. Some left-wing economic ideologies such as socialism, communism and Marxism favor a high level of government intervention in the economy. Whereas, right-wing economic ideologies such as Laissez-faire capitalism and free market capitalism favor a low level of government intervention in the economy. Finally, more modern liberal ideologies (which are positioned in the center of the economic spectrum) favor a mixed approach and include elements from both the right and left sides of the spectrum. As such, economists have identified three basic economic systems on the spectrum, which are command economy, mixed economy and free market economy.
Economists are people that research and study different aspects of a country’s economy and sometimes make recommendations on how to change the economy to meet new conditions. Some famous people who developed economic theories throughout history include: Adam Smith, Karl Marx, Friedrich Engels, Friedrich Hayek, John Maynard Keynes, and Milton Friedman. Understanding where each of these people falls on the economic spectrum shows their differences in opinion as it relates to economic systems.