THE ECONOMY SYSTEM OF INDONESIA
Economic main problem is goods and which should be made, how to produce the goods and service and for whom the goods and service are product.
The system of economic is a method of arrangement in the economic field, such as production, distribution and consumption in the effort of improving people prosperity.
The system economic can be influenced by :
Purpose of an aconomic system is in order that the economic activities are carried out to become one organized orderly, harmonious, and out of disorder unity.
Kind Of economic System
1. Traditional System
Is one which still makes use of traditional to arrange the whole life aspect and behavior.
The characteristic of traditional economic system :
a. Depending on the nature
b. The activity is performed accord with tradition/habit
c. Technological levelis still very simple
d. The activity is still limited to accomplish the principle or main requirement
e. The society are unwilling to accept modernity
f. The exchange system or barter still exists
• The advantage this system is laid on kinship relationship, civic minded and very strong solidarity and not egoistic
• The weakness of traditional economic system is unwilling to accept change or innovation from outside, so that the product yielded is very small, quality is relatively lower and do not grow.
2. Liberal Economic System
Is which gives freedom to individual or private institution to carry oout economic activity according to their own consideration.
Liberalism system has characteristic :
a. Each individual is free to have goods and production devices.
b. The economic activity in all sectors is measured by the society (private sector)
c. The government does not intervere directly in economic activity
d. Capital plays an important role in economic activity
e. Everyone is given free rein in the case of usage of goods and service
f. The production activity is performed with a purpose to look for maximum profit
g. There is free competition between one company with another
The advantages from liberalism economic system :
a. Freedom to choose the production devices and capital
b. Authorship of running a business, choosing a professiona and determining consumption
c. There are competition among the entrepreneurs
The weakness of liberalism system :
a. The eccorance of a free fight liberalism
b. The building up of gap between the have and the have not.
“the liberalism started to be popularized by a classical economic figure, Adan smith. He is a Scotland nationality economics who writes book with title ‘The Nature and Causes of the wealth of Nation’ there is statement prosperity of nation will be guaranted if everyone is given freedom to determine oneself what, how much/many, where hoe to conduct economic activity”
3. The centralized economic system
Is one where its arrangement and control of all economics activity is measured by the central government. In this system economic ectivity controlled by state, so private and individual hardly has an opportunity to perform economic activity.
The characteristic of centralized systemeconomic :
a. The activity of economic is arranged and controlled centrally by the state
b. Individual property is not recognized
c. Appliances and production factors are brought under the state.
d. Emphasizing the accoplishment most urgent society than individual requirement.
The excesses centralized economic system :
a. The government is fully responsible toward the economics
b. The government is free to determine the production policy
c. The goods distribution is organized by the government
d. Easy to carry out an inspection and control
e. The implementation of development is faster become because it has been arranged in a planning
The weakness centralized economic system :
a. States and its apparatus have the quality of dominant in arranging the economic system.
b. Individual property is not recognized, so that society is less aware of maintening the economic resources
c. All of the government’s policy should be done by the people and the government has the character of paternalism.