Economic system is an organized way in which a state or nation allocates its resources and apportions goods and services in the national community. A brief idea of different economic systems is given below.
Capitalist Economic System:
Capitalist system means an economic system in which all or most of the means of production are privately owned and operated, and the investment of capital and the production, distribution and prices of commodities (goods and services) are determined mainly in a free market, rather than by the state. In capitalism, the means of production are generally operated for profit. In a purely capitalist economy, there would be no public schools, no state owned or maintained roads and highways, public works, welfare, unemployment insurance, workers compensation, social Security benefits etc.
In this system, even education is considered as a mean to make profits, an industry. All the institutions are owned and operated by the private individuals/ organizations. The cost of education is thus very high in such a system. It leads to a state where education will be confined to the rich and all other classes of people are deprived of it. It widens social and economic inequality and leads to chaos.
Socialist Economic System:
The term socialism refers to any system in which the production and distribution of goods and services is a shared responsibility of a group of people. Socialism is based upon economic and political theories that advocate for collectivism. In a state of socialism, there is no privately owned property.
Most generally, socialism refers to state ownership of common property, or state ownership of the means of production. A purely socialist state would be one in which the state owns and operates the means of production. In socialism, the means of production are generally operated for prosperity of the citizens of the state. Socialism can exist within countries as an overall economic system or within factions thereof such as corporations, healthcare, public education, and education.
Albert Einstein explains “The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil… I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society”.
By making education accessible and free to every individual in the state, socialism tries to narrow the gap between the ill-educated and well- educated. Inequality is thus wiped out among the people. The aims of education, curricula and methods of teaching are determined keeping in mind welfare of the society at large and with a focus on democratic ideals, secularism, modernization, social reforms and national development. The control of education is exercised by the state. Educational institutions are managed by the state, access to education for all is ensured.
Mixed Economic System:
This is an economic system that includes a mixture of capitalism and socialism. This type of economic system includes a combination of private economic freedom and centralized economic planning and government regulation.
For instance, in India, the government is primarily responsible for the administration of justice, education (although there are many private schools and training centers), the road system, social statistical reporting, and national defence. It provides welfare and unemployment benefits to people who cannot support themselves, either because they encounter problems in their personal lives or lose their jobs as a result of economic upheaval; it pays much of the cost of medical care for the aged and those who live in poverty; it regulates private industry to limit air and water pollution; it provides low-cost loans to people who suffer losses as a result of natural disasters; and it has played the leading role in the exploration of space, which is too expensive for any private enterprise to handle.
There are educational institutions owned and operated by the government as well as the private in all levels of education, school level and college level, professional and non- professional, technical and other. The government offers compulsory minimum level of education at a free cost to the people. It also tries to control the cost of education even in private institutions up to an extent.