A Glossary: Definition of Terms
by Dwight Jeffress, Updated Jul 1, 2019
Below is a list of terms commonly used when one discusses economics. The bulk of this material is not mine. This list may expand over time, as I delve into more complex subjects. The launching of this blog will begin in a simplified manner, but then will grow in complexity and depth as I learn and share more detailed subject matter.
It is important that the reader understand these terms as I post my blogs. I will seek as one of my greatest goals is to disassemble and destroy the common misconceptions of the words associated with these terms. Many a political leader, various pundits, as well as talking heads, seek to use these terms as by-words for their agendas. I will seek to inform and educate. It is my additional hope that the reader becomes familiarized with common words and their true meanings as one understands them.
Under each of these definitions, I will cite its origin to give sourcing.
NOTE: on Citing: From Wikipedia (one of my premier sources for this page). "IMPORTANT NOTE: Most educators and professionals do not consider it appropriate to use tertiary sources such as encyclopedias as a sole source for any information—citing an encyclopedia as an important reference in footnotes or bibliographies may result in censure or a failing grade. Wikipedia articles should be used for background information, as a reference for correct terminology and search terms, and as a starting point for further research. As with any community-built reference, there is a possibility for error in Wikipedia's content—please check your facts against multiple sources and read our disclaimers for more information.
Considering this particular post is not an educational assignment, but rather informational and educational blog not produced for monetary gain (at this time), I will be utilizing Wikipedia on my Glossary page. Should circumstances present themselves that may need to alter citations, it will be initiated. A quick search of Google or any other internet search engine will note multiple articles and research studies noting the veracity of information presented on Wikipedia, which is a free online community driven and monitored internet encyclopedia. Atop each page is presented warnings if information within the article is suspect.
I very well may replace these definitions in this glossary with my own writing and eliminate source terms in the future. This will depend on time available and the appropriate nature of each definition while maintaining the integrity of the original definition as accepted by scholars and academics.
Economic system
"a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entities, decision-making processes and patterns of consumption that comprise the economic structure of a given community. As such, an economic system is a type of social system. The mode of production is a related concept. All economic systems have three basic questions to ask: what to produce, how to produce and in what quantities and who receives the output of production."
Source: (Wikipedia contributors. (2019, February 13). Economic system. In Wikipedia, The Free Encyclopedia. Retrieved 17:33, March 10, 2019)
Laissez-faire
"from French: laissez faire, lit. 'let do') is an economic system in which transactions between private parties are free from government intervention such as regulation, privileges, tariffs, and subsidies. The phrase laissez-faire is part of a larger French phrase and translates to "let (it/them) do", but in this context usually means "let go"."
Source: (Wikipedia contributors. "Laissez-faire." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 26 Feb. 2019. Web. 10 Mar. 2019.)
Capitalism
"an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."
Source: (Google)
"an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets."
Source: (Wikipedia contributors. "Capitalism." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 10 Mar. 2019. Web. 10 Mar. 2019.)
Free market
"an economic system in which prices are determined by unrestricted competition between privately owned businesses.
Source: (Google)
"In economics, a free market is a system in which the prices for goods and services are determined by the open market and by consumers. In a free market the laws and forces of supply and demand are free from any intervention by a government, or by other authority (emphasis added). Proponents of the concept of free market contrast it with a regulated market, in which a government intervenes in supply and demand through various methods — such as tariffs — used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy."
Source: (Wikipedia contributors. "Free market." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 7 Mar. 2019. Web. 10 Mar. 2019.)
Socialism
"a range of economic and social systems characterised by social ownership of the means of production and workers' self-management, as well as the political theories and movements associated with them. Social ownership can be public, collective or cooperative ownership, or citizen ownership of equity. There are many varieties of socialism and there is no single definition encapsulating all of them, with social ownership being the common element shared by its various forms.
Socialist systems are divided into non-market and market forms. Non-market socialism involves the substitution of factor markets and money with engineering and technical criteria based on calculation performed in-kind, thereby producing an economic mechanism that functions according to different economic laws from those of capitalism. Non-market socialism aims to circumvent the inefficiencies and crises traditionally associated with capital accumulation and the profit system. By contrast, market socialism retains the use of monetary prices, factor markets and in some cases the profit motive, with respect to the operation of socially owned enterprises and the allocation of capital goods between them. Profits generated by these firms would be controlled directly by the workforce of each firm, or accrue to society at large in the form of a social dividend. The socialist calculation debate concerns the feasibility and methods of resource allocation for a socialist system."
Source: (Wikipedia contributors. "Socialism." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 2 Mar. 2019. Web. 10 Mar. 2019.
Communism
In political and social sciences, communism (from Latin communis, "common, universal") is the philosophical, social, political, and economic ideology and movement whose ultimate goal is the establishment of the communist society, which is a socioeconomic order structured upon the common ownership of the means of production and the absence of social classes, money, and the state.
Source: (Wikipedia contributors. "Communism." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 4 Mar. 2019. Web. 10 Mar. 2019.)
Supply and demand
"In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted. However, this model does not hold in cases with positive feedback which can lead to an economic bubble as in the housing market in the early 21st century that led to the subprime mortgage crisis."
Source: (Wikipedia contributors. "Supply and demand." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 5 Mar. 2019. Web. 10 Mar. 2019.)
Market economy
"A market economy is an economic system in which the decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production."
Source: (Wikipedia contributors. "Market economy." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 7 Mar. 2019. Web. 10 Mar. 2019.)
Planned economy
"A planned economy is a type of economic system where investment and the allocation of capital goods take place according to economy-wide economic and production plans. A planned economy may use centralized, decentralized or participatory forms of economic planning. Planned economies contrast with unplanned economies, specifically market economies, where autonomous firms operating in markets make decisions about production, distribution, pricing and investment. Market economies that use indicative planning are sometimes referred to as "planned market economies"."
Source: (Wikipedia contributors. "Planned economy." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 8 Mar. 2019. Web. 10 Mar. 2019.)
Regulatory Economics (Regulations)
"Regulatory economics is the economics of regulation. It is the application of law by government or independent administrative agencies for various purposes, including remedying market failure, protecting the environment, centrally-planning an economy, enriching well-connected firms, or benefiting politicians."
Source: (Wikipedia contributors. "Regulatory economics." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 8 Mar. 2019. Web. 10 Mar. 2019.)
Regulated Market
"A regulated market (RM) or controlled market is an idealized system where the government controls the forces of supply and demand, such as who is allowed to enter the market and/or what prices may be charged.
It is common for some markets to be regulated under the claim that they are natural monopolies. For example, telecommunications, water, gas or electricity supply. Often, regulated markets are established during the partial privatisation of government controlled utility assets. A variety of forms of regulations exist in a regulated market. These include controls, oversights, anti-discrimination, environmental protection, taxation and labor laws."
Source: (Wikipedia contributors, 'Regulated market', Wikipedia, The Free Encyclopedia, 12 December 2017)
Below is a list of terms commonly used when one discusses economics. The bulk of this material is not mine. This list may expand over time, as I delve into more complex subjects. The launching of this blog will begin in a simplified manner, but then will grow in complexity and depth as I learn and share more detailed subject matter.
It is important that the reader understand these terms as I post my blogs. I will seek as one of my greatest goals is to disassemble and destroy the common misconceptions of the words associated with these terms. Many a political leader, various pundits, as well as talking heads, seek to use these terms as by-words for their agendas. I will seek to inform and educate. It is my additional hope that the reader becomes familiarized with common words and their true meanings as one understands them.
Under each of these definitions, I will cite its origin to give sourcing.
NOTE: on Citing: From Wikipedia (one of my premier sources for this page). "IMPORTANT NOTE: Most educators and professionals do not consider it appropriate to use tertiary sources such as encyclopedias as a sole source for any information—citing an encyclopedia as an important reference in footnotes or bibliographies may result in censure or a failing grade. Wikipedia articles should be used for background information, as a reference for correct terminology and search terms, and as a starting point for further research. As with any community-built reference, there is a possibility for error in Wikipedia's content—please check your facts against multiple sources and read our disclaimers for more information.
Considering this particular post is not an educational assignment, but rather informational and educational blog not produced for monetary gain (at this time), I will be utilizing Wikipedia on my Glossary page. Should circumstances present themselves that may need to alter citations, it will be initiated. A quick search of Google or any other internet search engine will note multiple articles and research studies noting the veracity of information presented on Wikipedia, which is a free online community driven and monitored internet encyclopedia. Atop each page is presented warnings if information within the article is suspect.
I very well may replace these definitions in this glossary with my own writing and eliminate source terms in the future. This will depend on time available and the appropriate nature of each definition while maintaining the integrity of the original definition as accepted by scholars and academics.
Economic system
"a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entities, decision-making processes and patterns of consumption that comprise the economic structure of a given community. As such, an economic system is a type of social system. The mode of production is a related concept. All economic systems have three basic questions to ask: what to produce, how to produce and in what quantities and who receives the output of production."
Source: (Wikipedia contributors. (2019, February 13). Economic system. In Wikipedia, The Free Encyclopedia. Retrieved 17:33, March 10, 2019)
Laissez-faire
"from French: laissez faire, lit. 'let do') is an economic system in which transactions between private parties are free from government intervention such as regulation, privileges, tariffs, and subsidies. The phrase laissez-faire is part of a larger French phrase and translates to "let (it/them) do", but in this context usually means "let go"."
Source: (Wikipedia contributors. "Laissez-faire." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 26 Feb. 2019. Web. 10 Mar. 2019.)
Capitalism
"an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."
Source: (Google)
"an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets."
Source: (Wikipedia contributors. "Capitalism." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 10 Mar. 2019. Web. 10 Mar. 2019.)
Free market
"an economic system in which prices are determined by unrestricted competition between privately owned businesses.
Source: (Google)
"In economics, a free market is a system in which the prices for goods and services are determined by the open market and by consumers. In a free market the laws and forces of supply and demand are free from any intervention by a government, or by other authority (emphasis added). Proponents of the concept of free market contrast it with a regulated market, in which a government intervenes in supply and demand through various methods — such as tariffs — used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy."
Source: (Wikipedia contributors. "Free market." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 7 Mar. 2019. Web. 10 Mar. 2019.)
Socialism
"a range of economic and social systems characterised by social ownership of the means of production and workers' self-management, as well as the political theories and movements associated with them. Social ownership can be public, collective or cooperative ownership, or citizen ownership of equity. There are many varieties of socialism and there is no single definition encapsulating all of them, with social ownership being the common element shared by its various forms.
Socialist systems are divided into non-market and market forms. Non-market socialism involves the substitution of factor markets and money with engineering and technical criteria based on calculation performed in-kind, thereby producing an economic mechanism that functions according to different economic laws from those of capitalism. Non-market socialism aims to circumvent the inefficiencies and crises traditionally associated with capital accumulation and the profit system. By contrast, market socialism retains the use of monetary prices, factor markets and in some cases the profit motive, with respect to the operation of socially owned enterprises and the allocation of capital goods between them. Profits generated by these firms would be controlled directly by the workforce of each firm, or accrue to society at large in the form of a social dividend. The socialist calculation debate concerns the feasibility and methods of resource allocation for a socialist system."
Source: (Wikipedia contributors. "Socialism." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 2 Mar. 2019. Web. 10 Mar. 2019.
Communism
In political and social sciences, communism (from Latin communis, "common, universal") is the philosophical, social, political, and economic ideology and movement whose ultimate goal is the establishment of the communist society, which is a socioeconomic order structured upon the common ownership of the means of production and the absence of social classes, money, and the state.
Source: (Wikipedia contributors. "Communism." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 4 Mar. 2019. Web. 10 Mar. 2019.)
Supply and demand
"In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted. However, this model does not hold in cases with positive feedback which can lead to an economic bubble as in the housing market in the early 21st century that led to the subprime mortgage crisis."
Source: (Wikipedia contributors. "Supply and demand." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 5 Mar. 2019. Web. 10 Mar. 2019.)
Market economy
"A market economy is an economic system in which the decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production."
Source: (Wikipedia contributors. "Market economy." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 7 Mar. 2019. Web. 10 Mar. 2019.)
Planned economy
"A planned economy is a type of economic system where investment and the allocation of capital goods take place according to economy-wide economic and production plans. A planned economy may use centralized, decentralized or participatory forms of economic planning. Planned economies contrast with unplanned economies, specifically market economies, where autonomous firms operating in markets make decisions about production, distribution, pricing and investment. Market economies that use indicative planning are sometimes referred to as "planned market economies"."
Source: (Wikipedia contributors. "Planned economy." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 8 Mar. 2019. Web. 10 Mar. 2019.)
Regulatory Economics (Regulations)
"Regulatory economics is the economics of regulation. It is the application of law by government or independent administrative agencies for various purposes, including remedying market failure, protecting the environment, centrally-planning an economy, enriching well-connected firms, or benefiting politicians."
Source: (Wikipedia contributors. "Regulatory economics." Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 8 Mar. 2019. Web. 10 Mar. 2019.)
Regulated Market
"A regulated market (RM) or controlled market is an idealized system where the government controls the forces of supply and demand, such as who is allowed to enter the market and/or what prices may be charged.
It is common for some markets to be regulated under the claim that they are natural monopolies. For example, telecommunications, water, gas or electricity supply. Often, regulated markets are established during the partial privatisation of government controlled utility assets. A variety of forms of regulations exist in a regulated market. These include controls, oversights, anti-discrimination, environmental protection, taxation and labor laws."
Source: (Wikipedia contributors, 'Regulated market', Wikipedia, The Free Encyclopedia, 12 December 2017)
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