ABSTRACT
It is customary to list three basic things that every economic system determines: (1) what to produce, (2) how to produce it, and (3) for whom to produce it. The analysis then indicates how each of these determinations is made in a given type of economic system, and may indicate alternative ways. The first two may be combined as the allocation of productive resources and the third designated as the distribution of income. These are indeed basic. Three other basic determinations are made, although one might try to sneak them in under the initial three categories. An economic system determines the level of employment of labor, varying as that level may be from time to time in some economies. This is of such importance that it should be added as a fourth thing determined by any economic system. Although economists find the equilibrium concept analytically very useful, disequilibria at both micro and macro levels is in a sense more normal, which raises question five as to how any economic system deals with situations when things are "out of kilter"; attention needs to be focused on the determination of the outcomes of various disequilibria. A sixth thing determined by any economic system may be implicitly assumed under resource allocation, but is of such importance that it might better be listed separately to be sure it gets explicit attention; that is, the determination of the provisions made for the future. This embraces the rate of saving and investment, technological research and development, and, as we have become more aware recently, the sustainability of a local or national or even world economy. Sustainability is affected
by pollution, overloading the life-support system, and depletion of natural resource capital.
