Professional Documents
Culture Documents
Introduction To Business
Introduction To Business
Industry
Qualities of Good Businessman
Capitalism
Socialism
Economic System of Pakistan
Industry
1.1 Manufacturing Industry
1.2 Extractive Industry
1.3 Construction Industry
1.4 Genetic Industry
Manufacturing Industry converts the basis goods (raw materials) into the finished goods. In
other words, industry creates form utility in the goods already produced by nature like furniture
by wood, machines by iron and cloth is made by cotton.
Extractive Industry
Extractive industry is generally related with the production of Primary Gods. These industries
are associated with agriculture, pastures, mining, and fish keeping or finishing. These industries
produce primary goods, which are used in the manufacturing industries as raw materials. These
industries get the goods from surface, beneath the surface and in the space.
Construction Industry activities of the construction industry are related to the houses,
buildings, dams, bridges, canals etc.
Genetic Industry is concerned with the activities, which increase the kinds of species. These
industries can increases or change the kinds and species of plants, fruits, animals. etc. through
genetic changes.
Socialism
Socialism is an economic system, which implies state ownership of instruments of
production. The management of business and industry is reduced to the
monopolistic control of the government. What is produced is equally divided among
those who helped produce rather than having anything into profits. Thus, economy
is run for social benefit rather than private profit.
Salient Features
State Ownership of Means of Production.
The means of production are the property of the state and not of private
individuals. The profits of all enterprises go to the state exchequer to be utilized for
the benefit of society rather than for the benefit of few private individuals.
No Private Enterprise
Production is to be initiated and conducted by the state, which will pay wages
and other costs and keep profits to itself. Interest and rent as payments respectively
to the capitalists and the landlords will disappear, for the state will by the capitalist,
landlord and entrepreneur.
Economic Equality
Remuneration for work is to be according to the nature of work and is not to
be equal. Earnings will vary according to ability.
Equality of Opportunity
Every individual, whether he belongs to a rich family or a poor family has an
equal opportunity to rise in life under socialism. Every young person is given equal
opportunity to receive education or training according to his aptitude of that he can
enter a profession of his choice.
Economic Planning
The state is in charge of both production and distribution. The allocation of
the productive resources of the community will be determined according to the
direction of a central authority.
Social Welfare and Social Security
It is social welfare consideration, which guides productive activity in the
economy rather than private profit. Commodities and services of such type and in
such quantities are produced which are essential for promoting social welfare.
Classless Society
The socialists believe in a classless society where the distinction between the
rich and the poor and the "haves" and the "have-nots" has completely disappeared.
Merits of Socialism
Social Justice
Under socialism, the inequalities of income are reduced to the minimum and
the national income is more equitably and evenly distributed.
Better Allocation of Resources
The productive resources of the nation are more economically and optimally
allocated among the various productive uses. A central planning authority
determines the allocation of resources among the various uses who is in a better
position to assess the basic needs of the people and the intensity of their desires.
Rapid Economic Growth
not feel the same keen self-interest as the employee of a private corporation, where
his tenure is not so secure. His main concern is to let things go on somehow without
a positive break down. Bureaucracy will further mean bossism, loss of individual
liberty, Gestapo, etc.
Not Successful in Business
The government personnel are not such as can conquer new fields. The
conditions in government services are not congenial for the display of extraordinary
ability.
Insufficient Resources
It is also urged that government cannot raise the huge amounts of capital,
which are necessary for the efficient running, and expanding of all industries and
trades.
Miss Allocation of Resources
Under socialism, there will be no automatic indicator like price mechanism for
the most economical allocation of the resources of the community among different
industries. Some commodities will be produced in excess and wasted, whereas
there may be a shortage of others resulting in unsatisfied demand. As such a
chronic maladjustment in demand and supply is feared.
Lack of Incentives
It is also feared that incentive to hard work and stimulus to self-improvement
will disappear altogether when personal gain or self-interest is eliminated. Inventive
ability, enterprising spirit and the go-ahead attitude will languish.
Loss of Economic Freedom
A serious charge against socialism is that, when freedom of enterprise
disappears, even the free choice of occupation will go. Workers will be assigned
certain jobs and they cannot change them without the consent of the planning
authority.
No Economic Equality
Socialism has failed to bring about economic equality. The dream of a
classless society is far from being realized. Some degree of skepticism in the
efficacy of socialism as a panacea for all social ills has grown and damped the
armour of some enthusiastic socialists.
Concentration of Power in the State
Under socialism, the State is not merely a political authority but it also
exercises unlimited authority in the economic sphere. The State is everything and
individual is nothing. He may not count at all.
Loss of Personal Liberty