three systems, too many

04/09/2012 § 2 Comments

I’ve got here three problems, and all of them are thanks to Europe’s economic crisis.

The Bloomberg article on Serbia (“Serbia Joblessness Swells As Milosevic-Era Leaders Return”) discusses a crazy unemployment rate exceeding that of Spain and Greece, two European countries that have recently been known to have the highest unemployment rates yet. Serbia is now turning to former allies of the current president in order to bring life back to Europe’s worst economy at the moment.

I’ve identified Serbia’s economic system as a socialist-mixed economy.

Individual Factors

The article and Serbia’s current economy is proof that perhaps their system of a socialist-mixed economy is not working. This could be due to their still heavily corrupt government as well as the people’s opposition to democracy ever since they started it 12 years ago. It seems that through their corrupt government, the state controls almost all of the production and resource allocation in Serbia and the consumers don’t get as much of a say in it as they should. Inefficient distribution has then resulted in unemployment and poverty.

We all love Korea – Korea’s weird and perky and innovative. They always come up with new products and ideas that never fail to sell to the public (let’s disregard the whole Samsung fiasco because that was a one time thing). This makes it bad news to hear that SK’s exports have been and are falling for the past two months now. Bloomberg’s article “South Korea Exports Fall for Second Month on Europe, Won” discusses this new issue and highlights the fact that the effect lack of demand has on SK’s exports and, in the coming future, its economy is bad.

I’ve identified South Korea’s economic system as a mixed-market economy.

Individual Factors

It to me seems that Korea has a mixed-market economy system because while supply and demand generally dictate the terms of Korea’s resource distribution and profit, I know from a friend that the government has a scary grasp on the entire country and with a few words, can get whatever they want out of the country. With this power, the government would then have a lot of control over Korea’s production and output. It is also a mixed-market economy because as shown in the article, the supply and demand has an effect on Korea. The lack of demand is shrinking some of Korea’s exports.

My favorite article of the bunch, the Wall Street Journal tells an awesome story about how individuals in Spain are faring under the effects of the EuroCrisis. The absolute most interesting thing about what’s going on in Spain based on this article is that people are adapting to their joblessness and are starting to pick up new ways to work together and make do with what they all have in order to survive.

I’ve identified Spain’s economic system as a capitalist (market) economy.

Individual Factors

For Spain, capitalism isn’t working very well. This is suggested in the fact that there is a huge unemployment rate and the unemployed that aren’t receiving assistance (35% from 22%) from the government. It is also suggested that the people of Spain are left to fend for themselves as they don’t trust the people who are handling their economy for them.

§ 2 Responses to three systems, too many

  • jj says:

    In Serbia there was a lot of bad privatization where the companies were sold to those who didn’t invest in the company, as they promised, but dismantled it and sold everything (often getting more from the sale of the parts than they paid) and turning it into a warehouse. These bad privatizations threw 100s of thousands out of work and destroyed even hearty companies which had survived the sanctions and war.

  • Mr. Nguyen says:

    Well done.

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