Capitalism

• Capitalism is an economic system of government that hinges on a free market. The economic market in a capitalist country has little to no barriers and regulations for trade and is often referred to as a laissez faire economy or a market economy. Capitalist countries promote free enterprise among their citizens, who primarily own and operate the means of production. A pure capitalist economy does not exist because by definition the market would have to be completely free of barriers. However, the United States, Great Britain and Japan are examples of countries whose economic systems of government come closest to pure capitalism.
  
  

Socialism

• In contrast to capitalism, socialism exists when the government has complete control over the economy. Also referred to as a command economy, a socialist economic system of government refers to a government that owns and operates the means of production.The goal of a socialistic economic system is to create the most good for the most number of people. In its purest form, citizens have no input or control in the economy; for this reason, socialist economies often coexist with authoritarian political systems. Because the governments of socialistic societies occasionally work with the private sector, there are also no pure command economies in the world. The former United of Soviet Socialist Republics (USSR), China, Cuba and Laos are examples of countries with a socialist form of government.
  
  

Mixed Economic System

• Because there are no pure capitalist or socialist economies, all the economic systems of government can be considered mixed economies that lean further towards socialism or capitalism. Mixed economic systems share traits of capitalist and socialist economic systems. Although the United States is very capitalistic, it technically has a mixed-economy because the government plays a role in regulating the economy. Minimum wage laws, the social security system, taxes and other regulations are examples of the government's role on the economy of the U.S. China, although almost purely socialist, does allow some private enterprise, so it technically has a mixed economy.
  
  

Communism

• It is common for people to confuse communism with socialism or consider it to be synonymous with a command economy. However, this is a misinformed view. Communism is an Utopian economic system that has never come to fruition and is only talked about in theory. It differs from capitalism and socialism because it exists without a political system. The economic system becomes the government and the public equally owns and operates the means of production. Karl Marx and Freidrich Engels are credited with the idea of communism. They advocate that socialism is a necessary system to reach the ultimate Utopian system of communism. Although the former Soviet Union was often referred to as communist, it was more accurately a Marxian socialist economic system.