Differentiate among private enterprise communism socialism and mixed economies?

Answer:

Private enterprise refers to private ownership of capital and enterprise and the operation of such as a means to generate a profit for private owners or shareholders. An economy dominated by private enterprise is called capitalism. Private enterprise usually relies heavily upon free market principles, but is compatible with regulated markets as well as semi-planned economies as in the case of corporatist economic systems. The basic principles behind free-market private enterprise are that people are free to contract with other people with minimal government regulation.

Communism refers to a state of society where private property in the means of production and wage labor are abolished. Communism is also defined as a doctrine for the liberation of the working class, and is heavily based on the theories of Marxism. Communist theory declares private property in productive property and common resources to be theft, and that profit derived from private owners and shareholders to be exploitation of the producers (proletariat). Free market principles are rejected for a planned economy where the flow of goods and services is controlled by the community, usually through democratic means via council democracy.

Socialism is an economic system whereby either the state or worker cooperatives own and control the means of production, strategic resources and major industry. The principle of socialism is to organize the economy in a rational manner that avoids the pitfalls of capitalism and the free market through planned or state directed economic systems. Socialism can also utilize the market mechanism to distribute goods and services in the form of market socialism, where the state or public retains ownership of major economic institutions. The revenue generated by the state economy would be used to finance government programs, potentially eliminating the need for taxation. A private sector for non-heavy industry can exist in a socialist system, but the state, public or cooperative sector would play the dominant role in the economy.

Most economies are considered mixed economies in the Western world today. Mixed economies include welfare states, social market economies and highly regulated capitalist economies. Features of mixed economies are regulation of private enterprise, progressive taxation, a re-distribution of wealth through welfare programs and social safety nets. Some mixed economies have a large public sector that coexists with a dominant private sector.