Many different economic systems exist throughout the world, including traditional systems such as capital and command economies, and more exotic systems. For instance, the University of Minnesota explains a Buddhist economic system believes in consuming as few resources as possible as a way to spend more time on creative endeavors. However, most developed nations subscribe to a blend of standard economic systems.
Capitalist
A capitalist economic system relegates the markets as the arbiter of prices and availability of goods and services. Adam Smith outlined the virtues of a market economy in his landmark book, "Wealth of Nations." In it, he explains rational individuals make choices that improve society. For example, a consumer tends to buy goods from the firm that produces them at the highest quality and most affordable. A prime characteristic of this economic system is the complete absence of government policy and regulation of the markets. An example of a country that subscribes to a mostly market-based economy is the United States.
Command
A command economy tends to be the choice for fascist and communist countries. Nations that have attempted a command economy include Germany in the 1930s and 1940s, former Soviet Union countries and Cuba. In a command economy, the government has total control over how resources are produced and distributed, and at what price everything is sold. Thus, the cost of a light bulb will be the same at every store, regardless of the location or availability. A problem with this economic system is a proclivity toward black markets, shortages and inefficient labor allocation. An aspiring doctor, for instance, might be instructed to work many hours in a factory.
Barter
A barter economy works best in agrarian societies with few formal financial institutions and organized markets. Thus, a farmer may trade sheep cheese for woven textiles from the neighboring village as means of economic trade. Though barter economies tend to be outdated in developed nations, trades for goods and services are still common between individuals.
Considerations
Most countries have a mix of different economic systems. In fact, the United States has several government institutions overseeing markets and various aspects of trade. Examples include the Federal Reserve, the Securities and Exchange Commission and the Federal Trade Commission. Likewise, command economies such as Cuba still engage in international trade with other nations. Thus, no country subscribes to just one type of economic system; instead, nations borrow traits from various systems.
