Systems of Governance - Essay Example

It is evident from the study that the American economy operates as a welfare state that also enables its economic firms to exist with a reasonable amount of freedom. Changing to a welfare state would not only put too many responsibilities on the government, it would also take away the responsibilities of corporate social responsibility that helps bring back money into the economy for social purposes without the problems that are associated with taxation. This would also force the government to increase the taxes that are levied on its populace and this would lead to widespread discontent that would then lead to an inefficient functioning of the economic apparatus across the country.

Following the Great Depression, the American government started a new system of offering benefits to the less privileged sections of the society; people who were unemployed and had to depend on the government for their survival. There were limited benefits that were made available to American citizens in areas that included healthcare as a part of it. The state sponsors part of these expenses for the citizens and this is funded through taxes. An entirely capitalist system would dispense with such schemes and promote the welfare of the capitalists and seek to ensure the well-being of the market and the factors that affect the market.

In such an economy, the welfare of old citizens would not be a priority and so wouldn’t the welfare of the other vulnerable sections of the society. . A state capitalist system, would however, enable both the creation of wealth and the implementation of welfare projects. The flaws of this system would however be the tendency of government firms to lapse into a state of lethargy that, if guarded against, can enable the system to work well. This system too, can only be used in a limited manner owing to the fact that this system may lead to a reduction in the level of entrepreneurship that arises from the people of the country.

This may cause a lot of loss in potential for the American economy if this system is adopted. Unlike these systems, the socialist system places the entire burden of enterprise as well as welfare on the state that then has to also implement a system whereby it provides equality for all that is an imposed freedom rather than one that evolves out of natural processes. This economy leads to the stunting of entrepreneurial activity which is the lifeblood of the American economy and needs to be used very selectively.

Adopting elements of the Danish state that also employs a mixed economy is a tricky proposition since the dynamics of the social, economic and political situations of the two countries involved are extremely different. Denmark, even though a mixed economy, tilts more towards the model of a welfare state that other Scandinavian countries follow in different degrees, too. The welfare of the citizens is taken care in healthcare and the pensions for vulnerable sections are also attended to by the state.

Healthcare insurances are provided by the government. All these welfare projects, however, lead to a high level of taxation that would be unsustainable in a country like the United States of America. Apart from this, Denmark allows the minimum wages to be set by the trade unions and