TB difference TC concordance TD contrariety of economic systemsDifferent tax systemsTax systems, even today, are as varied as the nations that devise them, ranging in complexity from in-kind arrangements to computerized revenue systems. Simple tax mechanisms are suitable only to the needs of those governments that are extremely limited in scope. When government responsibilities are extensive and diverse (as, for example, when taxes are used to modify economic inequalities and to distribute benefits in ways that are considered equitable), the supporting system of taxes must be technologically sophisticated. Elaborate networks of fiscal reporting become essential, as does a standard of public education adequate to ensure a high degree of taxpayer compliance. Different Economic Systems
Even those societies most completely committed to central planning, however, grudgingly modify official ideology by some concessions to private enterprise. For example, the USSR allowed its farmers, although organized in collective enterprises, to market crops grown on their own small plots. During the Communist period in Poland, most farming was in the hands of individual owners. Yugoslavia experimented in worker management of factories. Similar variation exists among capitalist economies. In most of them, the government owns and operates railroads and airlines. Even where outright government ownership or operation is exceptional, as in Japan, the central government exerts tremendous influence over economic activity. The U.S., the most devoted of major capitalist economies to free enterprise, has nevertheless rescued faltering corporations such as Lockheed and Chrysler and has, for all practical purposes, converted a number of major defense contractors into federal subsidiaries. Many American economists have come to accept the concept of a "mixed economy," combining private initiative with some government control. Free Enterprise.
In recent years in the U.S., the federal government has begun to deregulate industries such as air transportation and thus to diminish its influence over prices and the provision of services. Indeed, the most important price controlled by public influence is the price of money-that is, the rate of interest. Although American opposition to both controls and national planning is strong, the U.S. government has repeatedly resorted to these measures in times of emergency, such as during World War II and the Korean War. In general, however, free-enterprise economies consider state ownership of productive facilities and government interference in price setting as deplorable exceptions to the rule of private ownership and price determination through the mediation of competitive markets. Central Planning.
Strictly speaking, there is no reason why a democratic community could not freely choose to plan production, prices, and the distribution of income and wealth. In contemporary experience, however, central economic planning has generally run parallel to Communist party control of political life. Nonetheless, important differences exist in the strictness of these constraints in different Communist countries and even within the same country at different times. It is also true that capitalism has frequently been accompanied by repressive government, as for example in Chile and Brazil. The gravest problems of capitalism are unemployment, inflation, and economic injustice. Parallel problems in centrally planned economies include underemployment, rationing, bureaucracy, and scarcity of many consumer items. Liberal Socialist Economies.
On the other hand, Yugoslavia from the 1950s through the 1980s supplied an example of a liberal socialist society. Although the Communist party dominated, censorship was mild, emigration was easy, religion was freely exercised, and a unique mixture of state ownership, worker management, and private enterprise combined to operate a comparatively prosperous economy.
|