Capitalist Economy In The Early 20th Century
The basic economic problem questions of what, how and for whom to produce that persist in the economy are answered through centrally planned, capitalist and mixed economic systems. Whereas an economic system is a system which facilitates the production of services and goods, also as solving the basic economic problem which is scarcity. Several historical events which have happen during the early and late 20th century of political, economic and social have led to the development of dominant economic systems prevalent today. Capitalist economy system is where the private players answered the basic economic problem and it’s a system where they is private ownership of resources whereas the centrally planned economic system is where the government is responsible for answering the basic economic questions of what to, how to and for whom to produce. As these historical events such as the hyperinflation event, stock market crash event, great …show more content…
Economical historical event of hyperinflation which was a disaster to their economy in the early 20th century it affect the economy badly as the government continuously printing money which led to excess money in the economy, also it was not the individual players duty to reduce the inflation but as the government and the central bank duty to solve the problem. In the early 20th century as the capitalist economy system was still dominant, the intervention of the German government to reduce inflation through implementation of various economic monetary policies it proves wrong the Hayek theory and in contrast supporting the Keynes theory. Also, it led the various nations to believe that the capitalist economic system is not good to solve major problems which affect the country but the centrally planned economic system is the best in solving those national problems and the reception of centrally planned economic system was moving
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