An economic ideology discerns itself from a pure economic theory because it is normative rather than just explanatory in its approach. It describes the way an economy should be run and to what end, whereas the only aim of economic theories is to create accurate descriptive models. However the two are closely interrelated. A good way of discerning whether an ideology can be classified an economic ideology is to query if it inherently takes a specific and detailed economic standpoint. For instance, Anarchism cannot be said to be an economic ideology as such, because it has amongst others Anarcho-capitalism on the one hand and Anarcho-communism on the other as subcategories thereof, which in turn can. Furthermore, economic ideologies can be said to be a distinct subset of economic systems, because of the ideological element which is not part of economic systems per se.

Examples

• Capitalism

Capitalism is a broad economic system where competition in a free market determines the price, production and consumption of goods through the invisible hand of supply and demand reaching efficient market equilibrium. Capital, property and enterprise are privately owned and managed for a profit. New enterprises may freely gain market entry without State restriction. Employment and wages are determined by a labour market that will result in some unemployment. Government and Judicial intervention are necessary at times to ensure the efficient operation of markets against price fixing and collusion by producers and organized labour, and abuse of market power by monopolies. The capitalist economy will likely follow a business cycle of economic growth and recession. There are several variations of capitalism, the main ones being capitalist mixed economies, where the state intervenes in market activity and provides some services, Lassiez faire, where the state plays a minimal role, and anarcho-capitalism where the market and private enterprise are completely free from the state which is nonexistent.

• Socialism

Socialism refers to a broad set of economic systems in which the major enterprises are either owned or controlled by the state or owned by the members who work in the enterprises who manage them as cooperatives. Some socialist economic systems direct the economy through a national economic plan, while most favor a form of a mixed economy of public and private ownership, while currents such as Social Democracy advocate social welfare programs in a predominately market-based economy. In most socialist systems private property and private ownership of capital is restricted. The State usually decides on what is produced, and in the case of market socialism, the prices, incomes and levels of production. Unemployment is abolished and employment is guaranteed for life. Traditional Marxian socialism and labor-oriented socialism aim to subsidize key industries and provide cradle to the grave provision of social services in order to create a more equal society that may be able to develop into Communism. Socialism is usually divided into a few main variations, the planned economy system, the mixed economy, market socialism and participatory economics or libertarian socialism.

• Communism

Communism is the evolution of socialism so that the central role of the State has 'withered away' and is no longer necessary for the functioning of a planned economy. All property and capital are collectively owned and managed in a communal, classless and egalitarian society. Currency is no longer needed, and all economic activity, enterprise, labour, production and consumption is freely exchanged "from each according to his ability, to each according to his needs".

See also

• Economic system
• Political economy
• Ecological Economics
• Development economics