WHO OWNS THE MEANS OF PRODUCTION IN ECONOMIC SYSTEMS?
We have classified economic systems according to the way they answer three basic questions of what, how, and who. A fourth question that should be asked is, “Who owns the means of production?” An economy’s means of production are its capital: factories, farms, shops, mines, and machinery. The means of production are used to produce other goods and services. If the government owns and operates almost all of the nation’s means of production, then that nation’s economic system is called communism. China has a communist economic system. Almost all of the means of production are publicly owned-that is, owned by the government. Government planners decide the answers to the basic economic questions. Farming on private plots of land is sometimes allowed. In recent years, the Chinese government has been allowing more and more private businesses to operate. If the government owns and operates many of the nation’s major industries-such as banks, airlines, railroads, and power plants-but allows in
