NAME: Jaume Coll Canal

ASSIGNMENT 2: A NEW ECONOMIC SYSTEM

Dear national government,

You already know that our country must improve its economic system because it’s
quite undeveloped and citizens deserve the best. The goal for our economic system is
to make the GDP grow, so that some of the inhabitants can afford more than just food
and other basic needs to survive. Moreover, the number of people who work in
farming should be reduced and the government ought to create new jobs in other
areas. This will help the country to develop and, in consequence, make the daily life
easier for everybody. The current economic system we have is the traditional one. This
system is characterized by the goal of just surviving and not trying to improve the
quality of life; and by the need for families to teach their offspring what they know so
that they can help with daily chores.

However, there are other economic systems that may work better than this one. On
the one hand, there is the command system, in which the state is who distributes all
the wealth among all the citizens. On the other hand, there is the market economy,
which is the opposite of the command system. While in the former one the
government decides everything, in the market one government never intervenes.
Individuals set up different companies with workers that are paid by the company with
the money that it has earned by selling goods or providing services. The circular flow
diagram represents the process that money and resources do. Money goes from
individuals to businesses, and businesses spend this money paying land, capital, and
labor, so money returns to individuals and the circles continues. Resources are sold by
individuals to businesses, and they use them to make goods and services, which are
sold to individuals.

There is also the mixed economy, which is a mixture between the command system
and the market system. In this system, the government intervenes in the economy, but
it is limited. As all extremes are bad, I think this would be the best economic system for
the country. If the country had a command economy, it would be difficult to create
wealth and impossible for entrepreneurs to develop their ideas. But the market
economy always creates a lot of inequalities between workers and the company’s
executives. For these reasons, I reckon that a mixed economy guided by the law of
supply and demand but with the government preventing precarious conditions for
workers would be the best.