Saturday, June 4, 2011

The New Economy

Ever since the recession period began, there have been so many different economic changes that have been seen to date. Even with all the gloom that has been there, there are so many people that have been able to keep their businesses going in the new economy. Those that have very good entrepreneurial spirits are the ones that have been able to leave their mark in business.

The truth about this is that no matter how bad or how good things are, there are always people that are making good money. There are many good opportunities that present themselves and those that are sharp are the ones that take advantage of this. The intelligent business people are the ones that take advantage of these opportunities and they make things happen. One of the many things that make this to happen is the fact that a person has planned for everything and they have a good strategic plan. They also have that back up plan and the ability to predict the things that may happen in the business world. With all these capabilities, they are able to know the deals to make, whom to make those deals with and when to make those business deals.

As the economies change, the needs of the consumers either change or they increase and there are always new markets that are there for this. The work of the businesses owners is to ensure that they are able to give the consumers what they are looking for. The business people position themselves in a place where even as they do this they are able to capitalize in all the opportunities that present themselves.

Another important ingredient for making this happen is shifting ones mind set as this flexibility also creates so many possibilities. The business person needs to move their thinking to what that they did a few back and set their mind in doing things or making plans that are applicable in the current times. This may start small and the changes become gradual rather than abrupt. The biggest businesses today are the ones that have been able to embrace technology as well as other changes that are happening today. The more a business person is able to break free from the shackles of some of the things that tied them in the past, the more they are able to make good progress. This creates so many different opportunities that they use for their own good.

With a long financial stability, the business will not be limited to doing just one thing but they will also be open to different things. Many experts agree that times are really changing fast and business people should prepare themselves to making the necessary changes too. In the new economy, the direction that the business will decide to take will be depend on so many other factors on top of those mentioned here. Making sure that the business will be able to meet the needs of the consumers as they come requires business people with a vision and passion in whatever field they are in.

Traditional Economy Countries

The traditional economy countries are those that are said to accept the changes very easily and they mainly depend on agriculture. In other places, they are referred to as the subsistence markets and in order to understand these markets well, there are few things to look at. In many economies there are three things that determine how they perform. There are common economies where the prices of goods and services are determined by the government. In this particular type, there are certain systems that determine the price and among them are the belief systems as well as the customs. For this reason, it may remain unchanged for a long time and when the changes begin, they are very gradual.

One of the things to note is that there are still countries that still practice this and they follow them. They are not developed countries but they have been able to make the system to work for them for a long time. Many of these counties are those that are in the third world level and they are looking to advance to be among the developing countries. One thing to note about these markets is that the wealth is not in the hands of a few people and even if there are other currency forms of trading that are used include the barter trade. What happens is that the people produce what is enough to keep the families going and there is very little surplus that is left. All the others that are left go into business use that is to the businesses or to the government.

One of the things that they mainly rely on is agriculture as it is the backbone of all the activities that they do. Little by little, the places that do this are trying out other new things that they think may be able to work out for them and help them to advance to other levels and try out other different things as they think is convenient for them.

In order to understand this particular market fully, there are several things that need to be explained. With all the different definitions that are there, a person may be able to understand even more how it operates and the different things that it does so that it can be able to sustain itself. There are many places where they started with this before they advanced to become other form of markets.

It is now rare to find places where they still practice this because changes happen so fast and in many places they are doing everything to try and keep up. With this, the changes are taking places and more people are ready to accept new things. A look at traditional economy countries helps a person to understand where many other markets have come from and be able to rate their progress. It also helps a person to understand other forms of markets that are there and how they differ with this one in particular.

Friday, June 3, 2011

Economic Growth Definition

Finding the best economic growth definition is not necessarily an easy matter. In this day and age it would seem that there are a multitude of indices designed to track and calculate how an economy is performing.

Historically economical growth has been achieved in different ways. In earlier societies, national economical growth was based largely in terms of acquisition of resources and goods, hence the succession of wars across the world in places such as Europe and China as completing nations drove each other backwards and forwards across the map in order to achieve new territory. In addition basic trade ensured that goods moved around the world, although generally on a small scale of production. In modern times, however, following the industrial revolution, production of goods rose to enormous volumes. The 19th century saw large scale colonization as European nations in particular took control of Africa and used its raw materials to drive the industrialization of their economies.

Mechanization of the means of production and the transport of those goods enabled those countries at the forefront of the industrial age to gain a leading place in the world economy, and so it was that before the First World War in Europe that Britain had managed to create an empire covering vast expanses of the globe. However, as other nations caught up with Britain, her power waned and she was replaced as the leading economic power by the US, which has retained this position ever since. Mass production allowed for cheaper goods, shorter hours and generally better working conditions although with some notable exceptions, such as the mining industry. This in turn then generated a consumer boom, the first of which was in the US in the 1920s as the economy recovered from the effects of the war. This then lead to over-production and the Great Depression of the 1930s.

The theory of economical advancement is that a nation could over a period of time produce and retain more capital than it needed to outlay for the basic requirements of running the society. This in turn then meant that there was a surplus, which could be used by that nation to fund some of the basic services of the state such as healthcare, defense, education, etc. This realization was at odds with the previous belief that a nation could only develop through the extension of taxation (either on the static population or by accommodating additional population within the state).

With this knowledge in hand economic theorists then tried to build models that would predict economic growth patterns and allow nations to manage their resources and budgets properly to enable longer term economic management. The more recent theories have suggested that growth is now increasingly driven by technological advances, which play a similar role to mass production in terms of driving down costs. This economic growth definition has been further enhanced to reflect the fact that economies are at heart designed around human capital, such as education and job skills, adding weight to the argument that the more a society invests in its people, the more likely it is to grow economically.

Political Economy Definition

The political economy definition can be explained from different angles that touch on the branches of economics and politics. They all aim at trying to explain the relationship that is there between these two different terms. Reliable research has shown that this area tries to understand policies that are used both domestically and in other governments around the world and other fields that are related to this.

The branch of social philosophy as many would call it has been able to expand further on the term although it does not deviate from this. What it does is that it uses several principles and some fundamental mathematical techniques that help to understand this term even better. As a whole, the functioning of the economies has several things that allow it to have the essential tools that allow it to continue functioning. It can be defined as the discipline that mainly deals with the relationship that is there between the individual and the society. It looks at the market states and using the knowledge from different branches to say that it is multi disciplinary would be the right term to use here. It helps a person to understand how several institutions in a country influence each other.

It can be said to be an academic discipline that looks at the relationship between the two institutions and it has been derived from Greek words. Looking at the term can be used to analyze several factors that are at work here and how all of them affect the production in a country. They have a relationship with the law under which production has been organized. In many ways, it is seen to be a branch of social science even though it deals with the production and distribution of goods and services. The explanation given here is that it assumes the concepts that have been in use for a long time now. There are very many scholars that have come up with theories that help to expound on this even further.

The answer incorporates many theories from scholars from different generations and the latest ones still using those examples that the ones that came before them used. The use of theories cannot be ignored here because it is seen as a very integral part in trying to give an explanation of how different people use this term. The pillars of the explanation are that they focus on different things that at the end of the day they can be combined to form one solid explanation. There are linkages that are there with the different areas of study that cannot be ignored. The linkages can be used with many other disciplines to help make the term even clearer.

Today, political economy definition can take different forms depending on the approach that a person wants to take. The interrelationships between several areas that use these words have even helped to coin a new term in addition to what has been said. As the global economies continue to change more and more explanations will continue to be given.

Monday, May 30, 2011

Command Economy Definition

Command economy definition can be explained in simple terms. It is a form of economy where the government or central authority takes total control of the allocation of resources and the production of goods. It also determines the type of goods that are manufactured and the price at which they are sold. This is a common practice in socialist and communist states. It is also seen in countries with emergency military regimes. The government completely dominates and decides the direction of all economic activity. The market forces of demand and supply are not permitted to operate. The government makes decisions about what to produce then gives instructions to the enterprises to do so. Production is done according to the perceived social and national objectives.

As a direct contrast, in an unplanned market economy these same decisions are made by the private sector. The private manufacturers make investment, production, pricing and distribution decisions. This is usually based on the prevalent forces of demand and supply. Wages are determined by the ability of the worker to contribute to the success of the business. The command economy definition is similar to that of a planned economy although they are not the same. In the latter, there is a large level of government regulation of privately owned enterprises but there is less public ownership. In the command type of government, the enterprises are owned to a large extent by the state authority.

Over the last few decades, a lot of countries that previously adopted this system have transformed into more liberal economies. The private sector is now allowed to make production, pricing and distribution decisions. Some have made the complete transition to a free market system. A lot however have a mixed system where major industrial decisions are still controlled by the authorities. In a mixed system macro-economic planning is handled by the government while the micro-economic activity is left to the private sector.

An important aspect of the command economy definition is the benefits it provides where it is practiced. It encourages the development of industries that do not have much immediate economic values. An example is the development of nuclear technology. The aim of research and development is not private profit but the development of the nation. The government can easily and quickly harness all necessary resources to move the country in the most appropriate direction. It makes available certain goods that the private manufacturers have no incentive to produce.

On the other hand, command economies have some disadvantages. The first is that consumer preferences cannot be decided by a group of people in power. This generally leads to cases of surpluses or shortages of certain goods. This can only be adequately handled by allowing the forces of demand and supply to operate freely. Another disadvantage is that it can suppress worker creativity. This leads to the lack of development of new technologies. Supporters of this type of economic practice have advocated its use with the combination of the free market system. There is a lot to be gained if it is properly applied in a democratic environment. The advantages it offers in the speedy harnessing of resources can be used by the government to speed up economic progress in certain vital areas.