ZIMSEC Advanced Level Business Studies/ Business Enterprise Skills Notes: Economic Philosophies: An Introduction

  • Economic philosophies are also known as economic ideologies
  • It refers to a set of economic ideals that a given person, society, country, people ascribe to
  • It refers to what this group of people/person believe the economy ought to be
  • It expresses a perspective on the way an economy should run and to what end
  • In Economics parlance, we can say that economic philosophies take a normative approach as opposed to a positive approach
  • This is because economic philosophies involve making judgments about economic fairness or what the outcome of the economy or goals of public policy ought to be
  • Examples of ideas that are dealt with under economic philosophies include:
    • Whether people should be allowed to privately own land and other resources (factors of production)
    • Whether governments should be allowed to meddle in business affairs
    • The extent to which certain industries must be regulated by the government
    • Whether the government must make sure there is an equitable distribution of wealth
    • How should prices be set within the economy or a given industry
    • Should the government pursue nationalisation of certain or all industries
    • Should the government pursue social welfare?
    • Should the government introduce and administer universal health care?
    • Should the government pursue policies to make sure there is an equitable distribution of wealth?
  • To this end, over the centuries various economic ideologues have been put forth:
    1. Capitalism
    2. Socialism
    3. Communism
    4. Fascism
    5. Laissez-faire
    6. Marxism–Leninism
  • One thing to note is that economic ideology is often part of a broad political idealogy
  • Economic philosophies are sometimes confusingly called economic systems
  • Strictly speaking, economic systems are often a mere result of economic ideologies
  • Leaders who hold certain economic ideologies, create an economic system based on these ideals
  • Economic systems are thus positive in nature i.e. they are what is as opposed to what ought to be
  • Hence, for example, capitalism is often implemented in the form of a Free Market Economic system
  • On the other hand, Communism frequently leads to the adoption of a Command Economic system
  • Like all ideals, the economic systems are often a poor imitation of the ideology

To access more topics go to the Advanced Level Business Studies/ Business Enterprise Skills page

To access more topics go to the Advanced Level Business Studies/ Business Enterprise Skills page

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