An economic system is the social institution through which goods and services are produced, distributed, and consumed within a society. It encompasses the organisational arrangements, rules, and practices that govern how a society allocates its resources to satisfy the needs and wants of its members. Different societies have adopted various types of economic systems throughout history, including traditional economies, command economies, market economies (capitalism), and mixed economies that combine elements of different systems. Each type of economic system has its own set of principles regarding ownership of resources, decision-making processes, and mechanisms for production, distribution, and consumption. The dominant economic system in a society has a profound impact on its social structure, levels of inequality, and the daily lives of its people.