In theory, at least, there are three basic economic systems' socialism, communism, and capitalism. In modern reality, however the distinctions between these alternative systems have become blurred. It is safe to say that no pure system exists today. The U.S. capitalist economy exhibits certain socialist characteristics and the Soviet Union's and China's communist economies are being restructured to include a number of capitalist practices. To prepare for what lies ahead, each basic type of economic system requires a closer look.

Described by Karl Marx (1818 - 1883) as a forerunner of communism, socialism is an economic system in which the state owns the principal means of production but private property of some sort still exists. What distinguishes communism from socialism is the disappearance of private property in the later stage, communism.

Marx's view of the process from socialism to communism by means of the class struggle was neither universally accepted in his own time nor today. In fact, many saw non-revolutionary socialism as an end in itself. These so-called utopian socialists dreamed of ideal socie

A term often used to describe the mixed economies of Western Europe is democratic socialism. These countries have governments selected in free, open elections. Though their legal systems are often quite different from ours, they are designed to protect individual rights.

As early as the 1630s, American colonists residing in the richer, more established colonies lived as well as their European counterparts. Unlike their European cousins, however, the colonists achieved their standard of living largely by barter, trading goods for goods or services rather than for money. Throughout the colonial period, money in the form of gold or silver was in critically short supply. This shortage made accumulating the capital required for large-scale enterprises very difficult.

Before the start of the nineteenth century, most American businesses were small, owned either by individuals or partners who ran them. Between 1700 and 1776, only seven business corporations came into existence in the American colonies. By 1800 there were 335 corporations, over half of which had been created since 1796.

Production, regarded as the key to success, dominated all other business functions. In many industries competition was limited because only a few firms were capable of consistent, efficient production. Marketing's main jobs in these industries were simply the taking and filling of orders. Other marketing activities were not required when firms with arnple production capacity and robust product demand could sell all they could make.

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Approximate Word count = 1429
Approximate Pages = 6 (250 words per page double spaced)