A Mixed Economy: the United States
System
The economic system of the United States
is principally one of private ownership. This system, often referred to as a
"free enterprise system", can be contrasted with a socialist economic system,
which depends heavily on government planning and public ownership of the means
of production. It should be noted that although the United States operates a
system of private enterprise, government has to some extent always been involved
in regulating and guiding the U.S. economy. At the same time, U.S. citizens have
always had the freedom to choose for whom they will work and what they will buy.
Most important, they vote for officials who set economic policy.
In the U.S. economic system, consumers, producers and government make
economic decisions on a daily basis, mainly through the price system. The
dynamic interaction of these three groups makes the economy function. The
market’s primary force, however, is the interaction of producers and
consumers. This has led analysts to dub the U.S. economic system a "market
economy". As a rule, consumers look for the best values for
what they spend while producers seek the best price and profit for what they
have to sell. Government, at the federal, state, and local level, seeks to
promote the public security, assure fair competition, and provide a range of
services believed to be better performed by public rather than private
enterprises. Some of these public services include education (although there are
many private schools and training centers), the postal (but not the telephone)
service, the road system, social statistical reporting and, of course, national
defense. In the United States most people are simultaneously
consumers and producers; they are also voters who help influence the decisions
of government. The mixture among consumers, producers and members of government
changes constantly, making a dynamic rather than a static economy. In recent
years consumers have made their concern known, and government has responded by
creating agencies to protect consumer interests and promote general public
welfare. The U.S. economy has changed in other ways as well.
The population and the labor force have moved dramatically from farms to cities,
from fields to factories and, above a11, to service industries, thus providing
more personal and public services. In today’s economy, these providers of
services far outnumber producers of agricultural and manufactured goods.
Statistics also reveal a rather startling shift away from self-employment to
working for others. Generally, there are three kinds of
businesses: (1)those started and managed personally by single owners or single
entrepreneurs; (2)the partnership where two or more people share the risks and
rewards of business, and(3)the corporation where shareholders as owners can buy
or sell their shares at any time on the open market. This latter structure, by
far the most important, permits the amassing of large sums of money by combining
the investments of many people, making possible large-scale enterprises.