Economic System

Hello my readers.Today I am writing about Economic System.I will share some basic things that we must know.Because Economic system is related to our life.So we must have knowledge about it.


What is Economic System?

In general terms,economic system is the institutional structure of all the social and legal norms that are developed around the economic activities of people or countries in every society or country.

• Types of Economic System

There are four types of economic systems in the world.They are:

1.Capitalistic Economy
2.Socialistic Economy
3.Mixed Economy
4.Islamic Economy


1.Capitalistic Economy

An economic system in which there is private ownership of the means of production and the market is governed by a free price process without government intervention is called a capitalist economic system.This financial system is prevalent in the United States.

Capitalist finance originated in Europe.From the beginning of the 18th century, the capitalist economy was established through the industrial revolution.The French Revolution in 1789 ushered in bourgeois democratic revolutions across Europe.Classical economist Adam Smith and his followers are strong advocates and supporters of this economics.

In this financial system,individual ownership is recognized.Individuals can consume and produce as they wish.In this system,there is free competition.Basically,this financial system is run for the purpose of making profit.

Socialistic Economy


An economy in which state ownership rather than private ownership of resources is recognized is called a socialist economy.This financial system is prevalent in North Korea.

The world first saw the fall of Tsarism in Russia in 1917 and the rise of command economy or socialism under the leadership of Lenin.

This financial system is mainly done for public welfare.In this system the prices are fixed and planned through the government and the central committee.Freedom of consumer and producer is absent in financial system and there is no scope for free competition.

Mixed Economy


An economy that combines capitalist and socialist economies is called a mixed economy.This type of finance is prevalent in Bangladesh, India and Pakistan.


It is believed that the best economic system in the world today is the mixed economy.This financial system is prevalent in different countries of the world.Its financial system recognizes the presence of public and private sectors.It involves public and private investment. The price system is automatic. Individual freedom exists.

Islamic Economy


The financial system which is managed in the direction of Quran and Sunnah is called Islamic financial system.There are four sources of Islamic economics, namely: Holy Quran,Sunnah,Ijma,Qiyas.This financial system is prevalent in Malaysia,United Arab Emirates,Bahrain,Saudi Arabia,Iran etc.

In this financial system there are provisions of halal and haram.Interest, bribery and hoarding have been abolished in this financial system.This financial system will be managed on the basis of full Islamic Shariah.

However,if you are being confused to anything,let me tell in comment.If you want to know more,you can ask.

Thank you ❤️