An economic system consists of the institutions and the method by which resources are allocated and products and services are distributed. Economic systems differ primarily in who owns the factors of production, how the allocation of resources is directed and the method used to direct economic activity. The primary distinction between the different systems is the degree to which the government participates in the economy.

Communism, Capitalism, Socialism and marketalism, socio- capitalism are the major economic practices have been adopted in the world. America is a major engine to decide the trends since world war second.

Communism, also known as a directive system, is a monetary system where the government owns most of the factors of production and decides the allocation of resources and what products and services will be provided.

Under capitalism (market system), each individual or business works in its own interest and maximizes its own profit based on its decisions. A market economy is one where the allocation of resources and the trading of goods and services are through the decentralized decisions of many firms and households. Prices and the willingness of the market to pay those prices determine economic output, which, in turn, determines the allocation of resources.

Socialism can be illustrated as an economic system between communism and capitalism. Like communism, socialism seeks to redistribute the wealth more equitably by the communal ownership of natural resources and major industries, such as banking and public utilities. Socialists also seek to nationalize monopolies, which to a great extent enrich their owners at the expense of the waged people. However, unlike communism, most small or unnecessary enterprises would remain privately owned. Also unlike the Communists, most socialists do not advocate violence or force to achieve their economic system.

Economic Systems and problems:

History has amply demonstrated that communism and socialism retard the growth of economies, because there is no competition between businesses, and the people who manage such businesses are often political appointees, chosen more for their social connections them for their understanding of the businesses that they manage. Furthermore, large industries are often under the control of many bureaucrats, politicians, officials who often issue conflicting demands. They care little about whether society wants their product or service and do not care as much about costs since they are covered by the government.

Moreover, communism and socialism give great power to a few individuals who then become possessed with retaining their power, even at the tremendous expense of society. For instance, Cuba and North Korea are almost completely communistic, and even though the Communist governments in both countries have controlled their countries for years, their people remain mired in abject poverty. Consequentially, the people of Cuba and North Korea are mere economic slaves who are used to enrich the communist dictators of these countries.

The other major problem with communism and socialism is that not only are the major leaders almost completely ignorant of economics or the needs or wants of their people, but it is very difficult to remove them, in spite of their detriment to the economy.

Capitalism works generally well because it promotes competition so that only the most efficient businesses survive. Survival requires that the business owners are knowledgeable about their business and can manage it effectively, that they can minimize costs to produce their product or service, and that they know what people want, or make people to aware and tempt the people to increase their wants. Otherwise, the business will fail as most do.

Thus, capitalism provides the better means of achieving the efficient allocation of the factors of production and providing society with the goods and services that it most desires at the lowest possible cost. Hence, the production possibility frontier is maximized, providing the greatest benefit to society with the available scarce resources.

Although capitalism is the most effective means of allocating resources, it does have serious shortcomings, including the following:

Monopolies that can interfere with free enterprise and reduce allocation efficiency through their pricing power; free markets that do not price in externalities, which is the effect that the production of a good or service has on people that are not related to the good or service itself, such as the creation of pollution in producing a product.

A capitalist economy also requires a government to enact and enforce laws, to promote economic stability through monetary policy, to provide services that cannot be provided by a market system, such as a military to protect society against foreign invaders, and to redistribute some of the wealth to poorer people, especially by providing social security programs, such as health care, which is unaffordable for many people.

The redistribution of some wealth is necessary, because even in a capitalist economy, some people gain tremendous wealth then use it to influence governments to make them even wealthier, usually at the expense of poor people. For instance, in the United States, working income is taxed at a higher rate than either investment income or inherited income, income that accrues mostly to the wealthy. Although there is a progressive, marginal income tax rate in the United States, the tax is almost a flat tax when payroll taxes are added, and since payroll taxes do not apply to either investment income or inherited income, most wealthy people pay a lower percentage of their income in taxes than either the middle class, or even many of the poor, which is one reason why the top 1% is accumulating an ever greater portion of America's wealth.

No doubt that the science of economics will guide the development of future economies, fine tuning them by promoting what works and eliminating what doesn't work. But only if the influence of special interests can be limited or eliminated.

After globalisation the openness, glasnost (described in Russia) accepted in early 90’s and US economic blooms, since than almost world experiences faster globe economy with lot of innovations and new systems for betterment of public in general, every effort described by economists and politicians meant for eradication of poverty and fills the gap between rich and poor, avail all resources equally. However, new stuff and materials, services came in and people around the globe individuals came near to each other by virtual communication due to advanced technology, ease of transpiration and the universal increase of agriculture produce. It seems revolution in a variety of the sources. 

However, everything is there, even if, poverty and social gape widen than ever, terror and non tolerance, non secularism came into being.  In every economy, the middle class is the parameter of the stability and growth of the effectiveness of economic policies. One cannot judge the effectiveness of policies and practice on the base of list of rich class, a number of developed properties and products freely available in markets, little change in down class people in the society and GDP of the country. That reflects only steps of economic policy not the effectiveness on the country’s population. Effectiveness may be measured by per capita income to see the economy is effective for a certain period of time.

Why all systems fail recently? And world economy is shrinking.  The following is remarkable six reasons is high indications and also determine that all economy is no more successful neither useful nor help the growth of common people. Stagnating living standards and increasing economic insecurity.

(1) 2016 is the year of political populism. (2) Global insecurity and the refugee crisis (3) the referendum on Brexit (4) Russia’s role in the world (5) weak growth, choppy markets (6) China’s reforms and its uncertain economic standards.

It is important to take on board the fundamental optimism that globalisation is bringing to emerging markets. According to the IMF forecast for 2016 there would be more than 3.4 billion people living in various countries with a GDP growing faster than 6%. A growth rate of 6% means that the total economy will triple in two decades. That should be the fastest transformation out of poverty that humanity has ever experience. However, many countries have achieved that growth but the poverty still remains, an imbalance socio-economic portion indicated everywhere in Higher GDF countries, ecology balance and general life, health standards and social peace affected due to high per rush to achieve the growth.

Whether 2016 will bring a revival of the fundamental emerging market story or a year of disappointment is an open question, and the more market pressure is seen as an argument for reform the better the outcome will be. Though it seems no guarantee for a common man to lead a better life in next few decade the way present global economy exercises.

More or less economy adopted and globalisation is entirely failed; now time to recognise and accepts the fact that failures.

Move to another system of economy is the demand of the day.

Now I will bring few points how the next gen economy should be, what standards and systems will play the most effective role.