Essay On Political Economic System

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Political-economic systems are divided for four types: liberalism, social democracy, communism, and mercantilism. Most industrialized countries vary between political-economic systems such as liberalism and social democracy (O'Neil, 2004, pp. 101-133). Political-economic system such as social-democracy is better in providing growth and prosperity for the overall national economy than liberalism, because it is effective at both collective equality and personal freedom. Countries with social-democratic system are able to fulfill basic tasks such as health care, education, employment with balancing individual freedom and collective equality among citizens (O'Neil, 2004, p. 114). Although liberalism is good at individual freedom, it leads to inequality…show more content…
It holds a system of private property and free markets — capitalism (O'Neil, 2004, p. 113). In contrast, social-democratic system balances freedom and equality, welfare state is large and markets are regulated by government. (O'Neil, 2004, p. 115) By concentrating wealth in the hands of few individuals liberalism produces great inequality. It leads to polarization of society, “pitting owners against laborers, and rich against poor, city against countryside” (O'Neil, 2004, p. 114). Liberalism is prone to unemployment that leads to law degree of national economy. However, political-economic system such as social-democracy is better than liberalism in providing prosperity for the national economy, because through government regulation and taxes that leads to high social expenditures a state provides equality among citizens and low unemployment (O'Neil, 2004, p. 112). Taxation usually includes a larger income tax for people with higher incomes. This helps to reduce the income gap between the rich and poor. By taking high taxes a state provide high social expenditures that include health care, education and other social

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