1.
Economic system
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An economic system is a system of production, resource allocation, and distribution of goods and services within a society or a given geographic area. It includes the combination of the institutions, agencies, entities, decision-making processes. As such, a system is a type of social system. The mode of production is a related concept, all economic systems have three basic questions to ask, what to produce, how to produce and in what quantities, and who receives the output of production. The study of systems includes how these various agencies and institutions are linked to one another. The analysis of economic systems traditionally focused on the dichotomies and comparisons between market economies and planned economies, and on the distinctions between capitalism and socialism, subsequently, the categorization of economic systems expanded to include other topics and models that do not conform to the traditional dichotomy. Today the dominant form of organization at the world level is based on market-oriented mixed economies. Economic systems is the category in the Journal of Economic Literature classification codes that includes the study of such systems, there are multiple components to economic systems. Decision-making structures of an economy determine the use of inputs, distribution of output, the level of centralization in decision-making. Decisions might be carried out by industrial councils, by a government agency, in one view, every economic system represents an attempt to solve three fundamental and interdependent problems, What goods and services shall be produced, and in what quantities. How shall goods and services be produced and that is, by whom and with what resources and technologies. For whom shall goods and services be produced and that is, who is to enjoy the benefits of the goods and services and how is the total product to be distributed among individuals and groups in the society. Thus every economy is a system that allocates resources for exchange, the system is stabilized through a combination of threat and trust, which are the outcome of institutional arrangements. The means of production may be owned privately, by the state, a decision-making system, this determines who is eligible to make decisions over economic activities. Economic agents with decision-making powers can enter into binding contracts with one another, a coordination mechanism, this determines how information is obtained and used in decision-making. An incentive system, this induces and motivates economic agents to engage in productive activities and it can be based on either material reward or moral suasion. The incentive system may encourage specialization and the division of labour, organizational form, there are two basic forms of organization, actors and regulators. Economic actors include households, work gangs and production teams, firms, joint-ventures, economically regulative organizations are represented by the state and market authorities, the latter may be private or public entities
2.
Economic ideology
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An economic ideology distinguishes itself from economic theory in being normative rather than just explanatory in its approach. It expresses a perspective on the way an economy should run and to what end, however the two are closely interrelated as underlying economic ideology influences the methodology and theory employed in analysis. The diverse ideology and methodology of the 74 Nobel laureates in economics speaks to such interrelation, a good way of discerning whether an ideology can be classified an economic ideology is to query if it inherently takes a specific and detailed economic standpoint. Furthermore, economic ideology is distinct from a system that it supports, such as a capitalist ideology. There are several implementations of capitalism that are based around how much government involvement or public enterprise exists. Laissez-faire, or free market capitalism, is an ideology that prescribes minimal public enterprise, in such a system, Capital, property and enterprise are entirely privately owned and new enterprises may freely gain market entry without restriction. Employment and wages are determined by a market that will result in some unemployment. Government and Judicial intervention are employed at times to change the incentives for people for various reasons. The capitalist economy will likely follow a cycle of economic growth along with a steady cycle of small booms. The social market economy is advocated by the ideology of ordoliberalism and this ideology supports a free-market economy where supply and demand determine the price of goods and services, and where markets are free from regulation. However this economic ideology calls for action in the form of social policy favoring social insurance, unemployment benefits. Socialism refers to the theories of economic organization based on some form of social ownership of the means of production. Socialist systems can be distinguished by the dominant coordination mechanism employed, in some models of socialism, the state approves of the prices and products produced in the economy, subjecting the market system to direct external regulations. Alternatively, the state may produce the goods but then sell them in competitive markets, democratic socialism is an economic ideology that calls for democratic institutions in the economy. These may take the form of cooperatives, workplace democracy or ad hoc approach to the management, marxism-Leninism is a political ideology that calls for centralized planning of the economy. This ideology formed the basis of all existing Communist states. A socialist state will primarily concern itself with the welfare of its citizens, socialist doctrines essentially promote the collectivist idea that an economys resources should be used in the interest all participants, and not simply for private gain. This notion historically alienated the market economy, and tended to favor central planning, countries that favored excessive central controls experienced economic decline and collapse in the long run, as was the case with the Soviet Union
3.
Anarchist economics
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Anarchist economics is the set of theories and practices of economic activity within the political philosophy of anarchism. It is evident that, despite his speculations on the future of machinery, Godwins ideal society is based on the economics of handcrafts and cultivation. For the influential German individualist anarchist philosopher Max Stirner private property is a spook which lives by the grace of law, in other words, private property exists purely through the protection of the State, through the States grace. And what is their principle, whose protector they always love, not that of labour, rather it is interest-bearing possession. Labour certainly, yet little or none at all of ones own, Pierre Joseph Proudhon was involved with the Lyons mutualists and later adopted the name to describe his own teachings. Clarence Lee Swartz gives his own account of the origin of the term, claiming that he word mutualism seems to have been first used by John Gray, an English writer, in 1832. Thus, he saw private property as essential to liberty and a road to tyranny, the former when it resulted from labour and was required for labour. He generally called the possession and the latter property. For large-scale industry, he supported workers associations to replace wage labour, Josiah Warren is widely regarded as the first US anarchist, and the four-page weekly paper he edited during 1833, The Peaceful Revolutionist, was the first anarchist periodical published. Josiah Warren termed the phrase Cost the limit of price, with cost here referring not to monetary price paid, therefore, e proposed a system to pay people with certificates indicating how many hours of work they did. They could exchange the notes at local stores for goods that took the same amount of time to produce. Warren put his theories to the test by establishing an experimental labor for labor store called the Cincinnati Time Store where trade was facilitated by notes backed by a promise to perform labor. The store proved successful and operated for three years after which it was closed so that Warren could pursue establishing colonies based on mutualism and these included Utopia and Modern Times. Warren said that Stephen Pearl Andrews The Science of Society, published in 1852, was the most lucid, in Europe an early anarchist communist was Joseph Déjacque, the first person to describe himself as libertarian. Unlike and against Proudhon, he argued that, it is not the product of his or her labor that the worker has a right to, returning to New York he was able to serialise his book in his periodical Le Libertaire, Journal du Mouvement social. Published in 27 issues from June 9,1858 to February 4,1861, the anti-authoritarian sections of the First International proclaimed at the St. This revolutionary transformation could only be the outcome of the action of the proletariat itself, its trades bodies. Due to its links to active workers movements, the International became a significant organization, Karl Marx became a leading figure in the International and a member of its General Council
4.
Capitalism
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Capitalism is an economic system based on private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, economists, political economists, and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism, different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition, and state-sanctioned social policies. Most existing capitalist economies are mixed economies, which elements of free markets with state intervention. Capitalism has existed under many forms of government, in different times, places. Following the decline of mercantilism, mixed capitalist systems became dominant in the Western world, Capitalism has been criticized for prioritizing profit over social good, natural resources, and the environment, and that is a cause of inequality and economic instabilities. Supporters believe that it provides better products through competition, and creates strong economic growth, the term capitalist, meaning an owner of capital, appears earlier than the term capitalism. It dates back to the mid-17th century, capitalist is derived from capital, which evolved from capitale, a late Latin word based on caput, meaning head – also the origin of chattel and cattle in the sense of movable property. Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money, by 1283 it was used in the sense of the capital assets of a trading firm. It was frequently interchanged with a number of other words – wealth, money, funds, goods, assets, property, the Hollandische Mercurius uses capitalists in 1633 and 1654 to refer to owners of capital. In French, Étienne Clavier referred to capitalistes in 1788, six years before its first recorded English usage by Arthur Young in his work Travels in France, David Ricardo, in his Principles of Political Economy and Taxation, referred to the capitalist many times. Samuel Taylor Coleridge, an English poet, used capitalist in his work Table Talk, Pierre-Joseph Proudhon used the term capitalist in his first work, What is Property. To refer to the owners of capital, benjamin Disraeli used the term capitalist in his 1845 work Sybil. The initial usage of the term capitalism in its modern sense has been attributed to Louis Blanc in 1850, Karl Marx and Friedrich Engels referred to the capitalistic system. And to the capitalist mode of production in Das Kapital, the use of the word capitalism in reference to an economic system appears twice in Volume I of Das Kapital, p.124, and in Theories of Surplus Value, tome II, p.493. Marx did not extensively use the form capitalism but instead those of capitalist, and capitalist mode of production, also according to the OED, Carl Adolph Douai, a German-American socialist and abolitionist, used the phrase private capitalism in 1863. Capital has existed incipiently on a scale for centuries, in the form of merchant, renting and lending activities. Simple commodity exchange, and consequently simple commodity production, which are the basis for the growth of capital from trade, have a very long history
5.
Mercantilism
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Mercantilism was an economic theory and practice that was dominant in Western Europe during the 15th to the mid-18th centuries. Mercantilism is a form of economic nationalism and its goal is to enrich and empower the nation and state to the maximum degree, by acquiring and retaining as much economic activity as possible within the nations borders. Manufacturing and industry, particularly of goods with military applications, were prioritized, Mercantilism sought to ensure the nation produced as much volume and variety of output as possible, so as to limit its dependence upon foreign suppliers. Economic autarky was an element of mercantilism. These aims were primarily accomplished by, Imposing high tariffs on the importation of finished goods, Imposing low, or no taxes on the export of finished goods, and imposing high taxes on the exportation of raw materials. Seeking new markets for manufactured products, so as to artificially increase the demand for domestic production. These policies generally resulted in a balance of trade, which led to the accumulation of precious metals. Historically, such policies sometimes led to war and may have motivated colonial expansion, high tariffs, especially on manufactured goods, are an almost universal feature of mercantilist policy. Mercantilism has been linked to bullionism ever since Adam Smith made the accusation, however, due to the fact that no author self-consciously used the label to refer to their own thoughts mercantilist authors can only be identified retrospectively. It is the supply of things necessary for life and suitable for clothing, the core of mercantile policy was a coherent national industrial policy, which was aimed at generating as much material wealth within the nation as possible. Doing so, it was thought, was the best way to increase the states military, the term mercantile system was used by its foremost critic, Adam Smith, but mercantilism had been used earlier by Mirabeau. Many nations applied the theory, one example being France which was the most important state economically in Europe at the time. King Louis XIV followed the guidance of Jean Baptiste Colbert, his general of finances. Mercantilism was the dominant school of thought in Europe throughout the late Renaissance. Evidence of mercantilistic practices appeared in early modern Venice, Genoa, however, as a codified school of economic theories, mercantilisms real birth was marked by the empiricism of the Renaissance, which first began to quantify large-scale trade accurately. England began the first large-scale and integrative approach to mercantilism during the Elizabethan Era, queen Elizabeth promoted the Trade and Navigation Acts in Parliament and issued orders to her navy for the protection and promotion of English shipping. It was written in the 1620s and published in 1664, numerous French authors helped cement French policy around mercantilism in the 17th century. This French mercantilism was best articulated by Jean-Baptiste Colbert, though policy liberalised greatly under Napoleon, in Europe, academic belief in mercantilism began to fade in the late 18th century, especially in Britain, in light of the arguments of Adam Smith and the classical economists
6.
Protectionism
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Protectionist policies protect the producers, businesses and workers of the import-competing sector in a country from foreign competitors. According to proponents, these policies can counteract unfair trade practices, protectionists may favor the policy in order to decrease the trade deficit, maintain employment in certain sectors, or favor the growth of certain industries. In recent years, protectionism has become closely aligned with the anti-globalization movement, There is a broad consensus among economists that the impact of protectionism on economic growth is largely negative, although the impact on specific industries and groups of people may be positive. The doctrine of protectionism contrasts with the doctrine of free trade, a variety of policies have been used to achieve protectionist goals. Tariff rates usually vary according to the type of goods imported, import tariffs will increase the cost to importers, and increase the price of imported goods in the local markets, thus lowering the quantity of goods imported, to favour local producers. Tariffs may also be imposed on exports, and in an economy with floating exchange rates, however, since export tariffs are often perceived as hurting local industries, while import tariffs are perceived as helping local industries, export tariffs are seldom implemented. Import quotas, To reduce the quantity and therefore increase the price of imported goods. The economic effects of a quota is similar to that of a tariff. Economists often suggest that import licenses be auctioned to the highest bidder, administrative barriers, Countries are sometimes accused of using their various administrative rules as a way to introduce barriers to imports. Anti-dumping legislation, Supporters of anti-dumping laws argue that they prevent dumping of cheaper foreign goods that would cause local firms to close down, however, in practice, anti-dumping laws are usually used to impose trade tariffs on foreign exporters. Direct subsidies, Government subsidies are given to local firms that cannot compete well against imports. These subsidies are purported to protect jobs, and to help local firms adjust to the world markets. Export subsidies, Export subsidies are often used by governments to increase exports, Export subsidies have the opposite effect of export tariffs because exporters get payment, which is a percentage or proportion of the value of exported. Export subsidies increase the amount of trade, and in a country with floating exchange rates, have similar to import subsidies. Exchange rate control, A government may intervene in the exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, international patent systems, There is an argument for viewing national patent systems as a cloak for protectionist trade policies at a national level. Peter Drahos explains that States realized that patent systems could be used to cloak protectionist strategies, There were also reputational advantages for states to be seen to be sticking to intellectual property systems. In the modern trade arena many other initiatives besides tariffs have been called protectionist, for example, some commentators, such as Jagdish Bhagwati, see developed countries efforts in imposing their own labor or environmental standards as protectionism
7.
Social market economy
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It is sometimes classified as a coordinated market economy. The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union under Chancellor Konrad Adenauer in 1949 and its origins can be traced to the interwar Freiburg school of economic thought. The social market economy was designed to be a way between laissez-faire economic liberalism and socialist economics. It was strongly inspired by ordoliberalism and the tradition of Catholic social teaching or, more generally, some authors use the term social capitalism with roughly the same meaning as social market economy. It is also called Rhine capitalism, typically when contrasting it with the Anglo-Saxon model of capitalism, rather than see it as an antithesis, some authors describe Rhine capitalism as successful synthesis of the Anglo-American model with social democracy. A2012 comparative politics textbook distinguishes however between the conservative-corporatist welfare state and the social democratic welfare state. Social market economies aim to combine free initiative and social welfare on the basis of a competitive economy, the term social was established by Adenauer to prevent further reference to christian Socialism, which was used in the early party agenda Ahlener Programm in 1947. In putting social policy on par with economic policy, Müller-Armack’s concept was more emphatic regarding socio-political aims than the economic concept. This dual principle also appeared in the name of the model, furthermore, various Third Way conceptions prepared the ground for the socio-economic concept. This desirable order of freedom and equality was labelled by a later publication entitled Weder so – noch so. In his opinion the term was tainted, reminding him too much about ideas of a mixed economy and he vehemently and consistently argued against the view that models were converging. Further, in contrast to Müller-Armack who emphasised the social aspect, by proclaiming the freer an economy is, the more social it is, Erhard once told Friedrich Hayek that the free market economy did not need to be made social but was social in its origin. Ludwig Erhard was rather inclined to Walter Eucken’s ordoliberal competitive market order, although he even considered himself an ordoliberal, Erhard based his economic conception neither on Eucken nor on Müller-Armack. In fact, his doctoral supervisor Franz Oppenheimer and especially Wilhelm Röpke, like Erhard a student of Oppenheimer, was his source of inspiration, Erhard perceived Röpke’s books as works of revelation and considered the economist a brother in spirit. For instance, Müller-Armack stressed that by more socialism he meant the social engagement for, equally, Ludwig Erhard pointed out that the principles of the social market economy could only be achieved if the public was determined to give them priority. They share an involvement in the Anti-Nazi Opposition, whose search for an order for Germany is an important background for the development of this concept. Michel Albert described a concept, Rhine capitalism. While the neo-American model builds largely on the ideas of Friedrich von Hayek and Milton Friedman, Rhine capitalism, Albert analyzes the Rhenish model as the more equitable, efficient, and less violent one
8.
State capitalism
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The term is also used by some in reference to a private capitalist economy controlled by a state, often meaning a privately owned economy that is subject to statist economic planning. This term was used to describe the controlled economies of the Great Powers in the First World War. This practice is claimed to be in contrast with the ideals of both socialism and laissez-faire capitalism. There are various theories and critiques of capitalism, some of which have existed before the 1917 October Revolution. Vladimir Lenin notably described the economy of Russia as state capitalism and he argued that the tools for ending capitalism are found in state capitalism. For anarchists, state socialism is equivalent to state capitalism, hence oppressive and merely a shift from private capitalists to the state being the sole employer, after the October Revolution, Lenin used the term positively. If in a space of time we could achieve state capitalism. State capitalism would be a forward as compared with the present state of affairs in our Soviet Republic. Lenin argued the state should temporarily run the economy, which would eventually be taken over by workers, to Lenin state capitalism did not mean the state would run most of the economy, but that state capitalism would be one of five elements of the economy. The term state capitalism has been used by various socialists, including anarchists, Marxists, perhaps the earliest critique of the USSR as state-capitalist was formulated by the Russian anarchists, as documented in Paul Avrichs work on Russian anarchism. This claim would become standard in anarchist works. Soviet Russia, it must now be obvious, is an absolute despotism politically, murray Bookchin, when speaking about Marxism said that Marxism, in fact, becomes ideology. It is assimilated by the most advanced forms of state capitalist movement—notably Russia, by an incredible irony of history, Marxian “socialism” turns out to be in large part the very state capitalism that Marx failed to anticipate in the dialectic of capitalism. This is a statement if one thinks out its implications. At worse, these parties can seize power and create a new form of society in which the working class is oppressed by new bosses. Another early analysis the USSR as state capitalist came from various groups advocating left communism, one major tendency of the 1918 Russian communist left criticised the re-employment of authoritarian capitalist relations and methods of production. In sum these measures were seen as the re-transformation of proletarians within production from collective subject back into the objects of capital. The working class, it was argued, had to participate consciously in economic as well as political administration and this tendency within the 1918 left communists emphasized that the problem with capitalist production was that it treated workers as objects. Its transcendence lay in the workers conscious creativity and participation, which is reminiscent of Marxs critique of alienation and these criticisms were revived on the left of the Russian Communist Party after the 10th Congress in 1921, which introduced the New Economic Policy
9.
Economic democracy
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In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalisms inherent effective demand gap. Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory, for example, as a means to securing full economic rights, it opens a path to full political rights, defined as including the former. Both market and non-market theories of economic democracy have been proposed, according to many analysts, deficiency of effective demand is the most fundamental economic problem. That is, modern society does not earn income to purchase its output. While balanced mixed economies have existed throughout history, veteran Project Manager for the U. S. Treasury Department. Cook, and other critics claim that command economies are predominate, as common resources are monopolized by imperial centers of wealth and power, conditions of scarcity are imposed artificially upon the majority, resulting in large-scale socio-economic imbalance. In the Georgist view of any system, wealth includes all material things produced by labor for the satisfaction of human desires. Land, labor and capital are generally considered the essential factors in producing wealth, land includes all natural opportunities and forces. Capital includes the portion of wealth devoted to producing more wealth, according to Henry George, People seek to satisfy their desires with the least exertion. Human beings interact with nature to produce goods and services that other human beings need or desire, the laws and customs that govern the relationships among these entities constitute the economic structure of a given society. Products are exchanged in a market -- that is to say, goods and services are bought and sold at prices determined for the most part by competition, individual enterprises compete with one another in providing goods and services to consumers, each enterprise trying to make a profit. This competition is the determinant of prices. Most of the people who work for pay in this society work for other people, most working people are wage labourers. Supply and demand are generally accepted as market functions for establishing prices, organisations typically endeavor to 1) minimize the cost of production, 2) increase sales, in order to 3) maximize profits. In chapter 3 of his book, Community Organizing, Theory and Practice, Biklen states that, according to this viewpoint, orporate power, upper class power, uneven distribution of wealth and prejudice cause social problems. He problem is not one of poverty, but of enormous wealth, the problem is not one of gaps or cracks in an otherwise fine system but of a system which perpetuates prejudicial views concerning race, sex, age, and disability. The problem is not one of incompetence but of barriers to education, jobs and this perspective is, above all, eclectic. It embraces Marxs criticism of class inequality but is not only a social class analysis
10.
Feminist economics
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Feminist economics is the critical study of economics including its methodology, epistemology, history and empirical research, attempting to overcome androcentric biases. Feminist economics ultimately seeks to produce a gender inclusive economics. Inclusion of such topics has helped create policies that have reduced gender, racial, many scholars including Ester Boserup, Marianne Ferber, Julie A. Nelson, Marilyn Waring, Nancy Folbre, Diane Elson and Ailsa McKay have contributed to feminist economics. Warings 1988 book If Women Counted is often regarded as the document of the discipline. By the 1990s feminist economics had become recognised as a field within economics. Early on, feminist ethicists, economists, political scientists, and systems scientists argued that womens traditional work, according to Warrior, Economics, as its presented today, lacks any basis in reality as it leaves out the very foundation of economic life. This constitutes womens continuing industry enabling laborers to occupy every position in the work force, without this fundamental labor and commodity there would be no economic activity nor we would have survived to continue to evolve. For instance, focusing on just the U. S. A. according to a government sponsored report by the Urban Institute in 2014, but pimps can take in $33,000 a week in Atlanta, where the sex business brings in an estimated $290 million per year. Warrior believes that only an inclusive, facts-based economic analysis will provide a reliable bases for future planning for environmental and this evidence illuminated the negative outcomes that these changes had for women. This work, among others, laid the basis for the claim that women and men weather the storm of macroeconomic shocks, neoliberal policies. In the foreword to the 2014 anthology Counting on Marilyn Waring, Julie A. Nelson wrote and she showed exactly how the unpaid work traditionally done by women has been made invisible within national accounting systems, and the damage this causes. Encouraged and influenced a range of work on ways, both numerical and otherwise, of valuing, preserving, and rewarding the work of care that sustains our lives. By pointing to a neglect of the natural environment, she also issued a wake-up call to issues of ecological sustainability that have only grown more pressing over time. In recent decades, the field of feminist economics has broadened and widened to encompass these topics, supported by formation of the Committee on the Status of Women in the Economics Profession in 1972, gender-based critiques of traditional economics appeared in the 1970s and 80s. As in other disciplines, the emphasis of feminist economists was to critique the established theory, methodology. The critique began in microeconomics of the household and labor markets and spread to macroeconomics and international trade, Feminist economists pushed for and produced gender aware theory and analysis, broadened the focus on economics and sought pluralism of methodology and research methods. Feminist economics shares many of its perspectives with ecological economics and the applied field of green economy, including the focus on sustainability, nature, justice. Although there is no definitive list of the principles of feminist economics and this list is not exhaustive but does represent some of the central feminist economic critiques of traditional economics, out of the wide variety of such viewpoints and critiques
11.
Georgism
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Georgists argue that taxing economic rent is efficient, fair, and equitable. The main Georgist policy is a tax assessed on land value, Georgists argue that revenues from a land value tax can reduce or eliminate existing taxes on labor and investment that are unfair and inefficient. Some Georgists also advocate for the return of public revenue back to the people by means of a basic income or citizens dividend. Economists since Adam Smith have observed that, unlike other taxes, a land value tax is often said to have progressive tax effects, in that it is paid primarily by the wealthy, and it cannot be passed on to tenants, workers, or users of land. Georgist ideas were popular and influential during the late 19th and early 20th century, political parties, institutions and communities were founded based on Georgist principles during that time. The term Georgism was invented later, and some prefer the term geoism to distinguish their beliefs from those of Henry George, Henry George is best known for popularizing the argument that government should be funded by a tax on land rent rather than taxes on labor. According to George, people own what they create, but that natural opportunities. The tax upon land values is, therefore, the most just and it falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community and it is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, no citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence, and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, George believed there was an important distinction between common and collective property. Georgists have observed that privately created wealth is socialized via the tax system, while socially created wealth in land values are privatized in the price of land titles, assets consisting of commodified privilege can be considered as wealth since they have exchange value, similar to taxi medallions. Standard economic theory suggests that a land value tax would be extremely efficient – unlike other taxes, as land value tax can improve the use of land and redirect investment toward productive, non-rentseeking activities, it could even have a negative deadweight loss that boosts productivity. A tax upon ground-rents would not raise the rents of houses and it would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, in every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry
12.
Green economy
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The green economy is defined as an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more applied focus. The 2011 UNEP Green Economy Report argues that to be green, an economy must not only be efficient, fairness implies recognising global and country level equity dimensions, particularly in assuring a just transition to an economy that is low-carbon, resource efficient, and socially inclusive. Green Sticker and ecolabel practices have emerged as consumer facing measurements of friendliness to the environment, many industries are starting to adopt these standards as a viable way to promote their greening practices in a globalizing economy. Green economics is defined as any theory of economics by which an economy is considered to be component of the ecosystem in which it resides. A holistic approach to the subject is typical, such that economic ideas are commingled with any number of other subjects, depending on the particular theorist. The use of the term is further ambiguated by the distinction of Green parties which are formally organized and claim the capital-G Green term as a unique. It is thus preferable to refer to a school of green economists who generally advocate shifts towards a green economy, biomimicry. Some economists view green economics as a branch or subfield of more established schools, for instance, it is regarded as classical economics where the traditional land is generalized to natural capital and has some attributes in common with labor and physical capital. Developed nations is held steady at a ratio reflecting a balance of power, taking these into account targeting not less but radically zero emission and waste is what is promoted by the Zero Emissions Research and Initiatives. The UNEP2011 Green Economy Report informs that ased on existing studies, to place this demand in perspective, it is about one-tenth of total global investment per year, as measured by global Gross Capital Formation. In 2012, the ICC published the Green Economy Roadmap, containing contributions from experts from around the globe brought together in a consultation process. The Roadmap represents a comprehensive and multidisciplinary effort to clarify and frame the concept of “green economy” and it highlights the essential role of business in bringing solutions to common global challenges. 2010 -2016 Global Green Economy Index™, published by consultancy Dual Citizen LLC is in its 5th edition,2009 -2012 Green City Index A global study commissioned by Siemens 2009 -2013 Circles of Sustainability project scored 5 cities in 5 separate countries. Ecological footprint measurements are a way to gauge anthropogenic impact and are another standard used by municipal governments, Green economies require green energy generation based on renewable energy to replace fossil fuels as well as energy conservation and efficient energy use. The green economy may need government subsidies as market incentives to firms to invest and produce green products. The German Renewable Energy Act, legislations of many other states of the European Union. He has also criticised the UNs project on the economics of ecosystems and biodiversity, daly NOAA Economics of Ecosystems Data & Products
13.
Socialist economics
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Socialist economics refers to the economic theories, practices, and norms of hypothetical and existing socialist economic systems. Where markets are utilized for allocating inputs and capital goods among economic units, when planning is utilized, the economic system is designated a planned socialist economy. Non-market forms of socialism usually include a system of accounting based on calculation-in-kind or a measure of labor-time as a means to value resources. The term socialist economics may also be applied to analysis of former and existing economic systems that call themselves socialist, Socialist economics has been associated with different schools of economic thought. Marxian economics provided a foundation for socialism based on analysis of capitalism, while neoclassical economics, Karl Marx and Friedrich Engels believed that hunter-gatherer societies and some primitive agricultural societies were communal, and called this primitive communism. Engels wrote about this at length in the book The Origin of the Family, Private Property and the State, as such it is commonly regarded as a movement belonging to the modern era. Marx had viewed the process in a light, referring to it as part of the process of primitive accumulation whereby enough initial capital is amassed to begin capitalist production. The dislocation that Polyani and others describe, triggered natural counter-movements in efforts to re-embed the economy in society and these counter-movements, that included, for example, the Luddite rebellions, are the incipient socialist movements. Over time such movements gave birth to or acquired an array of intellectual defenders who attempted to develop their ideas in theory, as Polanyi noted, these counter-movements were mostly reactive and therefore not full-fledged socialist movements. Some demands went no further than a wish to mitigate the capitalist markets worst effects, later, a full socialist program developed, arguing for systemic transformation. As socialism developed, so did the socialist system of economics, the first theories which came to hold the term socialism began to be formulated in the late 18th century, and were termed socialism early in the 19th century. The central beliefs of the socialism of this period rested on the exploitation of those who labored by those who owned capital or rented land, Socialist ideas found expression in utopian movements, which often formed agricultural communes aimed at being self-sufficient on the land. These included many religious movements, such as the Christian socialism of the Shakers in America, the Zionist kibbutzim and communes of the counterculture are also manifestations of utopian socialist ideas. Utopian socialism had little to offer in terms of a theory of economic phenomena. In theory, economic problems were dissolved by a society which had transcended material scarcity. In practice, small communities with a common spirit could sometimes resolve allocation problems, the first organized theories of socialist economics were significantly impacted by classical economic theory, including elements in Adam Smith, Robert Malthus and David Ricardo. Ricardo argued that the class was parasitic. A key early socialist theorist of political economy was Pierre-Joseph Proudhon and he was the most well-known of nineteenth century mutualist theorists and the first thinker to refer to himself as an anarchist
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Market socialism
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Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy. Market socialism differs from non-market socialism in that the mechanism is utilized for the allocation of capital goods. Market socialism is distinguished from the concept of the economy, because unlike the mixed economy, models of market socialism are complete. Among early advocates of socialism were the Ricardian socialist economists. Even though these models did not rely on genuine markets, they were labeled market socialist for their utilization of financial prices. In more recent models proposed by American neoclassical economists, public ownership of the means of production is achieved through public ownership of equity, the key theoretical basis for market socialism is the negation of the underlying expropriation of surplus value present in other, exploitative, modes of production. Proponents of early market socialism include the Ricardian socialist economists, the liberal philosopher John Stuart Mill. These models of socialism entailed perfecting or improving the market-mechanism and free-price system by removing distortions caused by exploitation, private property and this form of market socialism has been termed free-market socialism because it does not involve planners. Mills early economic philosophy was one of free markets, later he altered his views toward a more socialist bent, adding chapters to his Principles of Political Economy in defence of a socialist outlook, and defending some socialist causes. Within this revised work he made the radical proposal that the whole wage system be abolished in favour of a co-operative wage system. Mills Principles, first published in 1848, was one of the most widely read of all books on economics in the period, as Adam Smiths Wealth of Nations had during an earlier period, Mills Principles dominated economics teaching. In the case of Oxford University it was the text until 1919. Mill promoted substituting capitalist businesses with worker cooperatives, Pierre-Joseph Proudhon developed a theoretical system called mutualism, which attacks the legitimacy of existing property rights, subsidies, corporations, banking, and rent. Proudhon envisioned a market where people would enter the market with equal power. Proponents believe that cooperatives, credit unions, and other forms of ownership would become viable without being subject to the state. Market socialism has also used to describe some individualist anarchist works which argue that free markets help workers. For American anarchist historian Eunice Minette Schuster It is apparent, William B. Greene presented this Proudhonian Mutualism in its purest and most systematic form. Warren was a follower of Robert Owen and joined Owens community at New Harmony, josiah Warren termed the phrase Cost the limit of price, with cost here referring not to monetary price paid but the labor one exerted to produce an item
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Corporatism
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It is theoretically based on the interpretation of a community as an organic body. The term corporatism is based on the Latin root word corpus meaning body, in 1881, Pope Leo XIII commissioned theologians and social thinkers to study corporatism and provide a definition for it. Corporatism is related to the concept of structural functionalism. Corporate social interaction is common within kinship groups such as families, clans, in addition to humans, certain animal species like penguins exhibit strong corporate social organization. Corporatist types of community and social interaction are common to many ideologies, Corporatism may also refer to economic tripartism involving negotiations between business, labour, and state interest groups to establish economic policy. This is sometimes referred to as neo-corporatism and is associated with social democracy. Kinship-based corporatism emphasizing clan, ethnic, and family identification has been a phenomenon in Africa, Asia. Confucian societies based upon families and clans in East Asia and Southeast Asia have been considered types of corporatism, China has strong elements of clan corporatism in its society involving legal norms concerning family relations. Islamic societies often feature strong clans which form the basis for a community-based corporatist society, in Italy, various function-based groups and institutions were created, including universities, guilds for artisans and craftspeople, and other professional associations. Some Catholic corporatist states include Austria under the leadership of Federal Chancellor Engelbert Dollfuss, in response to the Roman Catholic corporatism of the 1890s, Protestant corporatism was developed, especially in Germany, the Netherlands, and Scandinavia. However, Protestant corporatism has been less successful in obtaining assistance from governments than its Roman Catholic counterpart. In social psychology and biology, researchers have found the presence of corporate social organization amongst animal species. Research has shown that penguins are known to reside in densely populated corporate breeding colonies, ancient Greece developed early concepts of corporatism. Aristotle in Politics also described society as being divided along natural classes and functional purposes that were priests, rulers, slaves, after the French Revolution, the existing absolutist corporatist system was abolished due to its endorsement of social hierarchy and special corporate privilege for the Roman Catholic Church. The new French government considered corporatisms emphasis on group rights as inconsistent with the promotion of individual rights. Subsequently corporatist systems and corporate privilege throughout Europe were abolished in response to the French Revolution, from 1789 to the 1850s, most supporters of corporatism were reactionaries. A number of reactionary corporatists favoured corporatism in order to end liberal capitalism, from the 1850s onward progressive corporatism developed in response to classical liberalism and Marxism. These corporatists supported providing group rights to members of the middle classes and this was in opposition to the Marxist conception of class conflict
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Distributism
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In the early 21st century, some observers speculated on Pope Franciss position on distributism after his denouncement of unfettered capitalism in his apostolic exhortation Evangelii gaudium. Distributism, therefore, advocates a society marked by widespread property ownership, co-operative economist Race Mathews argues that such a system is key to bringing about a just social order. Distributism has often described in opposition to both socialism and capitalism, which distributists see as equally flawed and exploitive. Thomas Storck argues, both socialism and capitalism are products of the European Enlightenment and are thus modernizing and anti-traditional forces, further, some distributists argue that socialism is the logical conclusion of capitalism as capitalisms concentrated powers eventually capture the state, resulting in a form of socialism. In contrast, distributism seeks to subordinate economic activity to human life as a whole, to our life, our intellectual life. Particularly influential in the development of distributist theory were Catholic authors G. K, Chesterton and Hilaire Belloc, the Chesterbelloc, two of distributisms earliest and strongest proponents. The mid-to-late 19th century witnessed an increase in popularity of political Catholicism across Europe, according to historian Michael A. Riff, a common feature of these movements was opposition not only to secularism, but also to both capitalism and socialism. Common and government property ownership was expressly dismissed as a means of helping the poor, around the start of the 20th century, G. K. In the United States in the 1930s, distributism was treated in numerous essays by Chesterton, Belloc and others in The American Review, pivotal among Bellocs and Chestertons other works regarding distributism are The Servile State, and Outline of Sanity. It also influenced the thought behind the Antigonish Movement, which implemented cooperatives and its practical implementation in the form of local cooperatives has recently been documented by Race Mathews in his 1999 book Jobs of Our Own, Building a Stakeholder Society. The position of distributists when compared to other political philosophies is somewhat paradoxical, but there was a rosy time of innocence when I believed in Liberals. While converging with certain elements of traditional Toryism, especially an appreciation of the Middle Ages and organic society, much of Dorothy L. Sayers writings on social and economic matters has affinity with distributism. Under such a system, most people would be able to earn a living without having to rely on the use of the property of others to do so. Examples of people earning a living in this way would be farmers who own their own land and related machinery, plumbers who own their own tools, software developers who own their own computer, etc. The cooperative approach advances beyond this perspective to recognise that such property and equipment may be co-owned by local communities larger than a family, Chesterton in his 1910 book What’s Wrong with the World. Chesterton believes that whilst God has limitless capabilities, man has limited abilities in terms of creation, as such, man therefore is entitled to own property and to treat it as he sees fit. He states “Property is merely the art of the democracy and it means that every man should have something that he can shape in his own image, as he is shaped in the image of heaven. But because he is not God, but only an image of God, his self-expression must deal with limits, properly with limits that are strict and even small. ”Chesterton summed up his distributist views in the phrase Three acres
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Feudalism
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Feudalism was a combination of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries. Broadly defined, it was a way of structuring society around relationships derived from the holding of land in exchange for service or labour, since the publication of Elizabeth A. R. There is no commonly accepted definition of feudalism, at least among scholars. Since the publication of Elizabeth A. R, outside a European context, the concept of feudalism is often used only by analogy, most often in discussions of feudal Japan under the shoguns, and sometimes medieval and Gondarine Ethiopia. The term feudalism has also been applied—often inappropriately or pejoratively—to non-Western societies where institutions, the term féodal was used in 17th-century French legal treatises and translated into English legal treatises as an adjective, such as feodal government. In the 18th century, Adam Smith, seeking to describe systems, effectively coined the forms feudal government. In the 19th century the adjective feudal evolved into a noun, the term feudalism is recent, first appearing in French in 1823, Italian in 1827, English in 1839, and in German in the second half of the 19th century. The term feudal or feodal is derived from the medieval Latin word feodum, the etymology of feodum is complex with multiple theories, some suggesting a Germanic origin and others suggesting an Arabic origin. Initially in medieval Latin European documents, a grant in exchange for service was called a beneficium. Later, the term feudum, or feodum, began to replace beneficium in the documents, the first attested instance of this is from 984, although more primitive forms were seen up to one-hundred years earlier. The origin of the feudum and why it replaced beneficium has not been well established, the most widely held theory is put forth by Marc Bloch. Bloch said it is related to the Frankish term *fehu-ôd, in which means cattle and -ôd means goods. This was known as feos, a term that took on the meaning of paying for something in lieu of money. This meaning was then applied to itself, in which land was used to pay for fealty. Thus the old word feos meaning movable property changed little by little to feus meaning the exact opposite and this Germanic origin theory was also shared by William Stubbs in the 19th century. Another theory was put forward by Archibald R. Lewis, Lewis said the origin of fief is not feudum, but rather foderum, the earliest attested use being in Astronomuss Vita Hludovici. In that text is a passage about Louis the Pious that says annona militaris quas vulgo foderum vocant, another theory by Alauddin Samarrai suggests an Arabic origin, from fuyū. Samarrais theory is that early forms of fief include feo, feu, feuz, feuum and others, indeed, the first use of these terms is in Languedoc, one of the least Germanic areas of Europe and bordering Muslim Spain
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Gift economy
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A gift economy, gift culture, or gift exchange is a mode of exchange where valuables are not traded or sold, but rather given without an explicit agreement for immediate or future rewards. This contrasts with an economy or a market economy, where goods. Social norms and custom govern gift exchange, Gifts are not given in an explicit exchange of goods or services for money or some other commodity. The nature of gift economies forms the subject of a debate in anthropology. Anthropological research into gift economies began with Bronisław Malinowskis description of the Kula ring in the Trobriand Islands during World War I. The Kula trade appeared to be gift-like since Trobrianders would travel great distances over dangerous seas to give what were considered valuable objects without any guarantee of a return. According to anthropologists Maurice Bloch and Jonathan Parry, it is the relationship between market and non-market exchange that attracts the most attention. Gift economies are said, by some, to communities. Gift ideology in highly commercialized societies differs from the typical of non-market societies. Gift economies must also be differentiated from several closely related phenomena, such as common property regimes, however, he claims that anthropologists, through analysis of a variety of cultural and historical forms of exchange, have established that no universal practice exists. Gift exchange is frequently embedded in political, kin, or religious institutions, gift-giving is a form of transfer of property rights over particular objects. The nature of property rights varies from society to society, from culture to culture. The nature of gift-giving is thus altered by the type of property regime in place, property is not a thing, but a relationship amongst people about things. According to Chris Hann, property is a relationship that governs the conduct of people with respect to the use. Anthropologists analyze these relationships in terms of a variety of actors bundle of rights over objects, an example is the current debates around intellectual property rights. Hann and Strangelove both give the example of a book, over which the author retains a copyright. The gifts given in Kula exchange still remain, in some respects, in the example used above, copyright is one of those bundled rights that regulate the use and disposition of a book. Gift-giving in many societies is complicated because private property owned by an individual may be limited in scope
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Informal sector
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The informal sector, informal economy, or grey economy is the part of an economy that is neither taxed, nor monitored by any form of government. Unlike the formal economy, activities of the economy are not included in the gross national product. The informal sector can be described as a market in labour. Other concepts which can be characterized as informal sector can include the market, agorism. Associated idioms include under the table, off the books and working for cash, although the informal sector makes up a significant portion of the economies in developing countries it is often stigmatized as troublesome and unmanageable. However the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s, as such, integrating the informal economy into the formal sector is an important policy challenge. It was used to describe a type of employment that was viewed as falling outside of the industrial sector. An alternative definition uses job security as the measure of formality, defining participants in the economy as those who do not have employment security, work security and social security. ”While both of these definitions imply a lack of choice or agency in involvement with the informal economy. This may manifest as unreported employment, hidden from the state for tax, social security or labour law purposes, the term is also useful in describing and accounting for forms of shelter or living arrangements that are similarly unlawful, unregulated, or not afforded protection of the state. ‘Informal economy’ is increasingly replacing ‘informal sector’ as the descriptor for this activity. Informality, both in housing and livelihood generation has often seen as a social ill, and described either in terms of what participant’s lack. Workers who participate in the economy are typically classified as employed. The type of work makes up the informal economy is diverse, particularly in terms of capital invested, technology used. The spectrum ranges from self-employment or unpaid labor to street vendors, shoe shiners. On the higher end of the spectrum are upper-tier informal activities such as service or manufacturing businesses. The upper-tier informal activities have higher costs, which might include complicated licensing regulations. However, most workers in the sector, even those are self-employed or wage workers, do not have access to secure work, benefits, welfare protection. These features differ from businesses and employees in the sector which have regular hours of operation
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Robinson Crusoe economy
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A Robinson Crusoe economy is a simple framework used to study some fundamental issues in economics. It assumes an economy with one consumer, one producer and two goods, the title Robinson Crusoe is a reference to the novel of the same name authored by Daniel Defoe in 1719. The implicit assumption is that the study of a one agent economy will provide insights into the functioning of a real world economy with many economic agents. This article pertains to the study of behaviour, producer behaviour. In other fields of economics, the Robinson Crusoe economy framework is used for essentially the same thing, for example, in public finance the Robinson Crusoe economy is used to study the various types of public goods and certain aspects of collective benefits. It is used in economics to develop growth models for underdeveloped or developing countries to embark upon a steady growth path using techniques of savings. In the Robinson Crusoe economy, there is one individual – Robinson Crusoe himself. He acts both as a producer to maximise profits, as well as consumer to maximise his utility, the possibility of trade can be introduced by adding another person to the economy. This person is Crusoes friend, Man Friday, although in the novel he plays the role of Crusoes servant, in the Robinson Crusoe economy he is considered as another actor with equal decision making abilities as Crusoe. Along with this, conditions of Pareto Efficiency can be analysed by bringing in the concept of the Edgeworth box, similar to the choices that households face, Crusoe has only two activities to participate in – earn income or pass his time in leisure. The income generating activity in case is gathering coconuts. As usual, the time he spends in leisure, the less food he has to eat, and conversely, the more time he spends gathering coconuts. This is depicted in figure 1 and this means that the longer Robinson works, the more coconuts he will be able to gather. But due to diminishing returns of labour, the additional number of coconuts he gets from every additional hour of labour is declining. The point at which Crusoe will reach an equilibrium between the number of hours he works and relaxes can be out when the highest indifference curve is tangent to the production function. This will be Crusoes most preferred point provided the technology constraint is given, at this equilibrium point, the slope of the highest indifference curve must equal the slope of the production function. Recall that the Marginal rate of substitution is the rate at which a consumer is ready to give up one good in exchange for good while maintaining the same level of utility. Additionally, a marginal product is the extra output that can be produced by using one more unit of the input
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Black market
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Parties engaging in the production or distribution of prohibited goods and services are members of the illegal economy. Examples include the trade, prostitution, illegal currency transactions. Violations of the tax code involving income tax evasion constitutes membership in the unreported economy, because tax evasion or participation in a black market activity is illegal, participants will attempt to hide their behavior from the government or regulatory authority. Cash usage is the medium of exchange in illegal transactions since cash usage does not leave a footprint. Common motives for operating in markets are to trade contraband, avoid taxes and regulations. Typically the totality of such activity is referred to with the article as a complement to the official economies, by market for such goods and services. Black money is the proceeds of a transaction, on which income and other taxes have not been paid. Because of the nature of the black economy it is not possible to determine its size. There is no single underground economy, there are many and these underground economies are omnipresent, existing in market oriented as well as in centrally planned nations, be they developed or developing. Different types of activities are distinguished according to the particular institutional rules that they violate. Illegal economy participants engage in the production and distribution of prohibited goods and services, such as trafficking, arms trafficking. The unreported economy consists of economic activities that circumvent or evade the institutionally established fiscal rules as codified in the tax code. A summary measure of the economy is the amount of income that should be reported to the tax authority but is not so reported. A complementary measure of the economy is the tax gap. In the U. S. unreported income is estimated to be $2 trillion resulting in a tax gap of $450–$500 billion, the unrecorded economy consists of those economic activities that circumvent the institutional rules that define the reporting requirements of government statistical agencies. A summary measure of the economy is the amount of unrecorded income. Unrecorded income is a problem in transition countries that switched from a socialist accounting system to UN standard national accounting. New methods have been proposed for estimating the size of the unrecorded economy, but there is still little consensus concerning the size of the unreported economies of transition countries
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Virtual economy
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A virtual economy is an emergent economy existing in a virtual world, usually exchanging virtual goods in the context of an Internet game. People enter these virtual economies for recreation and entertainment rather than necessity, however, some people do interact with virtual economies for real economic benefit. Despite primarily dealing with in-game currencies, this term also encompasses the selling of virtual currency for real money, Virtual economies are observed in MUDs and massively multi player online role-playing games. The largest virtual economies are found in MMORPGs, Virtual economies also exist in life simulation games which may have taken the most radical steps toward linking a virtual economy with the real world. Virtual economies can also exist in browser-based Internet games where real money can be spent and user-created shops opened, Virtual property is a label that can refer to any resource that is controlled by the powers-that-be, including virtual objects, avatars, or user accounts. The following characteristics may be found in virtual resources in mimicry of tangible property, note however that it is possible for virtual resources to lack one or more of these characteristics, and they should be interpreted with reasonable flexibility. Rivalry, Possession of a resource is limited to one person or a number of persons within the virtual worlds game mechanics. Persistence, Virtual resources persist across user sessions, in some cases, the resource exists for public view even when its owner is not logged into the virtual world. Interconnectivity, Resources may affect or be affected by other people, the value of a resource varies according to a persons ability to use it for creating or experiencing some effect. Secondary markets, Virtual resources may be created, traded, bought, real-world assets may be at stake. Value added by users, Users may enhance the value of virtual resources by customizing and improving upon the resource, the existence of these conditions create an economic system with properties similar to those seen in contemporary economies. Therefore, economic theory can often be used to study these virtual worlds, within the virtual worlds they inhabit, synthetic economies allow in-game items to be priced according to supply and demand rather than by the developers estimate of the items utility. These emergent economies are considered by most players to be an asset of the game, in classical synthetic economies, these goods were charged only for in-game currencies. These currencies are often sold for real world profit, a search for WoW Gold on Google will show a multitude of sites from which Gold can be purchased. Real money commerce in a market has grown to become a multibillion-dollar industry. IGE had a staff that would handle financial issues, customer inquiries. This lucrative market has opened a new type of economy where the border between the real and the virtual is obscure. Hundreds of companies are successful in this new found market
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Economy of Singapore
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Singapore has a highly developed trade-oriented market economy. The economy of Singapore is a major Foreign Direct Investment outflow financier in the world, Singapore has also benefited from the inward flow of FDI from global investors and institutions due to its highly attractive investment climate and a stable political environment. Moreover, water is scarce in Singapore therefore water is defined as a resource in Singapore along with the scarcity of land to be treated with land fill of Pulau Semakau. Singapore has limited land, meaning that Singapore has to rely on the agrotechnology park for agricultural production and consumption. Human resources is another issue for the health of the Singaporean economy. The economy of Singapore ranks 2nd overall in the Scientific American Biotechnology ranking in 2014, Singapore also has a strategic port which makes it more competitive than many of its neighbours in carrying out such entrepot activities. Singapore has the highest trade to GDP ratio in the world, the Port of Singapore is the second-busiest in the world by cargo tonnage. Singapores government promotes high levels of savings and investment through policies such as the Central Provident Fund, Singapores savings rates have remained among the highest in the world since the 1970s. Most companies in Singapore are registered as private limited-liability companies, a private limited company in Singapore is a separate legal entity, and shareholders are not liable for the companys debts beyond the amount of share capital they have contributed. To attract foreign talents, Singaporean government issues Employment Pass under three categories viz, the Ministry of Manpower oversees the matter related to immigration of workers. These measures aim to boost Singapores productivity, so that Singapore remains competitive, upon independence from Malaysia in 1965, Singapore faced a small domestic market, and high levels of unemployment and poverty. 70 percent of Singapores households lived in overcrowded conditions. Unemployment averaged 14 percent, GDP per capita was US$516, in response, the Singapore government established the Economic Development Board to spearhead an investment drive, and make Singapore an attractive destination for foreign investment. FDI inflows increased greatly over the decades, and by 2001 foreign companies accounted for 75% of manufactured output. Meanwhile, Singapores savings and investment rates rose among the highest levels in the world, while household consumption, as a result of this investment drive, Singapores capital stock increased 33 times by 1992, and achieved a tenfold increase in the capital-labor ratio. Living standards steadily rose, with families moving from a lower-income status to middle-income security with increased household incomes. During a National Day Rally speech in 1987, Lee Kuan-Yew claimed that 80% of Singaporeans could now be considered to be members of the middle-class. However, much unlike the policies of Greece and the rest of Europe
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