Aartee Mishra is teaching live on Unacademy Plus
Daily Lecture Series Ramesh Singh's A brief Summary of Indian-Economy Overview Hindi unacadeny By Aartee Mishra
l am Aartee Mishra Graduated from Delhi University, Topper in all my semesters, Pursuing P.G and preparing for CSE. You can findall my courses at https:/unacademy.com/userIranianmishra2011 Also by Downloading the Unacademy Learning app from the Google Playstore
Factors of Production (Factor Inputs) Factors of production are the inputs available to supply goods and services in an economy. Natural resources available for production The human input into the production process Land Labour Entrepreneurs organise factors of production and take risks Goods used in the supply of other products e.g. tech Enterprise Capital
Capitalistic Economy-Private Sector Max Role Need of competition Profit Motive- E.g USA, Japan, Singapore The capitalistic form of economy has its origin in the famous work of Adam Smith-Wealth of Nations (1776) He raised his voice against the heavy-handed government regulation of commerce and industry of the time which did not allow the economy to tap its full economic worth and reach the level of wellbeing Stressing 'division of labour' and an environment of 'laissez faire' (non-interference by the government), he proposed that the 'invisible hand' of 'market forces' (price mechanism) will bring a state of equilibrium in the economy and a general well-being for the countrymen For such an economy to function for public well-being, he acknowledged the need of competition in the market Different names-Private Enterprise System, Free Enterprise System or Market Economy
Capitalistic Economy- Drawbacks Enequality Injustice Gap Widens Environment Harm Different Names: Private Enterprise system or Market Economy Monopsony: a market situation in which there is only one buyer. Inequality Economic instability Monopsony Problems of capitalism Monopoly power Immobilities Short- termism Environmental costs Immobilities: There are two main types of factor immobility Occupational (a cause of unemployment and market failure) Geographical immobility (refers to barriers people moving from one area to another to find work)
State Economy Rooted in the ideas of historical change proposed by the German philosopher Karl Marx (1818-1883), more specifically, this kind of economic system first came up in the erstwhile USSR after the Bolshevik Revolution (1917) and got its ideal shape in the People's Republic of China (1949) Govt maximum role & welfare motive This form of economic system also spread to other countries in Eastern Europe. Here we see two versions of the state economy-in erstwhile USSR known as the socialist economy and in pre-1985 China as the communist economy While a socialistic economy emphasised collective ownership of the means of production (property and assets), it also ascribed a large role to the state in running the economy, while communist economy, on the other hand, advocated state ownership of all properties including labour with absolute power to state in running the economy Such economies were also known as Centralised Economy, Centrally Planned Economy or Non-market Economy
State Economy Communism State ownership of all properties including labour Absolute power to state Oppose capitalism Socialism Accept government and capitalism can co exist Eg. USSR, Cuba Transitional For Marx, Socialism was a transitional stage to communism, it never happend in reality Different Names: Centralised economy, centrally planned or non-market economy Drawbacks: Red Tapism, Corruption & lack of choices
MIXED ECONOMY Mixed Economy mized The General Theory of Employment, Interest and Money. Keynes suggested strong government intervention in the economy eco omy To get the economy out of the depression, he suggested an increase in government expenditures, discretionary fiscal policy (fiscal deficit, lower interest rates, cheap money supply, etc.) to boost the demand of goods and services as this was the reason behind the depression. As Keynesian policies were followed, the concerned economies were successfully pulled out of the Great Depression The governments of the time started producing and supplying some basic goods and services which are known as 'public goods'.
Mixed Economy V These goods basically intended to guarantee Socialism is... not only a way of life, but a certain scientific approach to social and economic problems. -Jawaharlal Nehru minimum level of nutrition to all, healthcare, sanitation, education, social security, etc In 1985, China announced its 'open door policy', the first experiment in 'market socialism-Lange had the last laugh. Other state economies, though caught unprepared, followed the Chinese experiment towards market socialism India (Nehruvian Socialism)- Malaysia, Indonesia etc. In 1985 China announced its "Open Door Policy", the first experiment in "market socialism"
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