Question

How does an economic system help a society deal with the fundamental problem of scarcity? 100 words

Answer 1

Capitalism is an economic model which suggests that the government should have the least intervention possible regarding the markets and the development of industries. I should only operate as a regulator.

Under this model, people with the most resources, such as capital or land, will try to earn more wealth by making use of these resources. People with the least resources will be employed by the latter group and offer them labor in exchange for a periodical payment.

This system is the counterpart of Socialism, which attacks the problem of scarcity by trying to make policies in order to guarantee a more equal distribution of wealth.