In a traditional economy, how distributed resources are predicted by habits and traditions practiced by the community. Here, the basics of the economy are guided by predetermined powers and everyone automatically knows where they match. The work is distributed according to heritage and there is little room for growth and innovation because new ideas are usually insulted and are considered a threat to the way of life.
In the traditional economy, there are stability and predictability and employers rare, standard of living is significantly low. The government played many roles in the command economy. Instead of allowing traditions and habits of dictating economy, the central government is chosen or appointed to dictate the basics of the economy. Everyone is then required to follow economic decisions made by the government or their interest groups regardless of their different or preferred stands.
The market economy on the other hand is controlled by the strength of demand and supply. What will be produced, for whom and the amount needed is all left in the hands of the market, people. This economy allows growth and change based on various consumer needs. Distribution of wealth in the market economy is often unbalanced because it is calculated by the needs of faltering from market forces.
Communism captures the command economy. The central unit has all and efforts to distribute wealth evenly to all. The advantages and disadvantages of this approach have each other. Capitalism works well with the market economy, direction and growth submitted to consumers and business owners. By promoting competitive life, any community resources are needed and placing them well so that it encourages efficiency and flexibility. But the main setback can be the insensitivity of this type of economy with a balanced distribution of needs.
The basics of similar economic in the current main economy, most of the practicing socialism seeks to mix command and market economy. In this arrangement, the central unit controls the public demands of the essential temporary demands that are not importantly allowed to compete with the strength of demand and hard supply. The mixed economy takes the best of all other economies, combining it to meet the demands of the community every much larger scale.
