CLASS TEST PRACTISE 3

Competition can be defined as an economic law which regulates the price of goods in relation with offer and demand.

The Industrial Revolution is the substitution of the medieval regulations, that's to say it causes a new economic system. During this period capitalism began to rise. Capitalism is an economic system based on free market by which only few people got rich and the other lived in poverty.

Capitalism can be defined as an economic system where resources are privately owned. In capitalism everyone works for his own wealth. In opposition to capitalism born also another system named Socialism. Socialism is a system where goods are owned by the state or the public, and people work for wealth which is distributed equally to everyone. As a consequence of the Industrial Revolution began to rise Trade Unions, which defend workers' rights.

The Industrial Revolution led also to growth two system of thought. Socialism and Economic Science. The last has four chief books. These books have different aims but they all talk about distribution of wealth. A. Smith investigated the causes of wealth and asserted that each country has to increase its own richness and power. J. S. Mill wrote a book which was different from the other. He said that the distribution of wealth is a result of "particular social arrangements" and he added that competition didn't help people who suffered misery. This is the first example of influence of socialism on economist.

Competition nowadays plays an important role in the economy. In order to protect markets against the creation of cartels and abuse of market power, we have to believe in the importance of a strong competition authority. This is a reason why we must apply competitions rules in a rigorous way. Competition itself helps us to react to the changes we face because changes continue to grow.

Analyzing all these aspects, the idea of Socialism may help us in modern economy, because according to this ideology people might have a good distribution and a good earning of wealth. Everyone has the same rights. In Socialism people produce wealth in order to distribute it equally to everyone. Unfortunately history demonstrated that this is not possible because people always think for themselves. Maybe the only way is free competition. It rose during the Industrial Revolution and it changed with the passing of time. Nowadays we should act trying to do our best. Free market and free competition give the opportunity to everyone to improve himself, but we must never forget the rights of the human being.