Although every economy is in some way distinct, it is helpful to distinguish three pure types, called traditional, command, and market economies. These economies differ in the way in which economic decisions are coordinated. All real economies contain some elements of each method.
* Theoretical foundations of the classification of economic systems
The most known studies on this matter are those of Von Mises, Grossman and Hicks. Von Mises distinguished two economic types, the distinction is founded on the differences of the social cooperation: an economy with a cooperation founded on some contractual relations among individuals and the cooperation based on a centralized and hierarchical command and subordination system. Grossman presented three forms of system: custom economy, market economy and centralized economy. The custom economy is a traditional one. The market economy is founded on the price mechanism and on the autonomous enterprises. The centralized economy is a command economy where enterprises produce following some targets given by their hierarchical superiors. In the same manner, Hicks distinguished custom economy, authoritarian economy and the merchant economy, the latter is based on the private property system throughout private contracts while the authoritarian economy is governed by a strict hierarchical order.
