ntrod     tion     1.5
     the attempts and the successes of the concerned      made available to the population freely or at the
     economies as to which extent they have been able     subsidised prices by the state and some might
     to fulfil the needs of their population.             be supplied by the market for which consumers
          There are two aspects of the challenge that     need to pay. Almost all economies of the world
     economies face. First, the availability of the goods today follow one or the other kind of distribution
     and services required by the population and          system. As the socio-economic composition of the
     second, the presence of the supply network. Every    population of an economy changes, the mixture of
     economy has to, at first, guarantee the required     the goods and services to be supplied by the state
     level of goods and services out of its production    and the market get redefined in the economies
     process. For this, proper level of production        from time to time.
     capacity should be built which requires a
     particular level of capital formation or investment.    organising an Economy
     From where the investible funds will be managed
     is altogether a separate question. Whether the       One issue which has affected the civilised history
     investment will come from the government, the        of mankind the most and has been a point of
     domestic private sector or the foreigners? Once      contentious is how the production process in an
     these details are cleared and selected as per the    economy should be organised. Should production
     socio-economic condition of the economy, a           should be the sole responsibility of the state/
     proper distribution network for goods and services   government or should it be left altogether to the
     produced is assured.                                 private sector? Again, will it be better to carry on
                                                          production with a joint effort—a mixture of state
     Distribution netWork moDels                          and private enterprises?
     In the arena of distribution network, we have three       Depending upon the dominant view of the
     historically existing models—state, market and       time in a particular country, different forms
     state-market mix. In the first type of distribution  of production patterns evolved and different
     system, the state (i.e., the government) takes the   economic systems finally came up, providing
     sole responsibility of supplying goods and services  alternative ways of organising an economy. The
     required by the population with no payments being    three models of economic system which evolved
     done by the consumer—the former Soviet Union         in the course of human history are basically the
     and Communist China being the best examples.         different stages in the evolutionary process of the
     In the second category comes the market mode of      experiments to define a better way of organising
     distribution which functions on the basis of price   an economy. We must have a concise overview of
     mechanism. In this system, goods and services        this evolutionary process:
     are made available in the market and on the
                                                          1 Capitalistic Economy
     basis of their demand and supply, their prices are
     determined in the open market and finally they       The capitalistic form of economy has its origin
     get distributed to the population. This was the      in the famous work of Adam Smith—Wealth of
     distribution system of the capitalist economies—     Nations (1776). Adam Smith (1723–1790), the
     the whole of Euro-America. The third and the         Scottish philosopher-economist professor at the
     most prevalent mode of distribution, the state-      University of Glasgow, whose writings formed the
     market mix, developed out of the experiences of      basis of classical economics, had stressed certain
     the former two systems. This distribution system     fine ideas which were to take fancy among some of
     has certain goods and services which might be        the western countries and finally capitalism took