Characteristics of Market or Capitalist Economies

(a)An active government in economic affairs “crowds out” the private sector ie private investments and innovations and is less efficient in using resources than the private sector

(b)The private sector ie the private sector or private property owners, innovators, investors are more efficient in using resources than the government

(c) The “Best government is the one that governs least”

(d)Government’s role in the economy should be confined to do the things that government does best such as designing and implementing contract laws, property rights, providing national security to its citizens, providing currency or legal tender etc

         Characteristics of Centrally Planned or Socialist Economies