The mixed economy system is an economic system in which all the economic systems are followed, just as Socialism and capitalism. If we look at the world today, there are many or almost all countries in the world that use a mixed economy. Mix economy means that there are some companies in the country that are running on socialism, that is, they are under the government, but there are some companies that are running on the basis of capitalism. This is a system that the whole world follows today. Every country that has adopted this economic system has made great strides.
It is the economic system that carries the characteristics of both capitalism and socialism. The system works well when the evils of both systems are excluded. Those who were against socialism, capitalism, or both gradually introduced it.
Nowadays except few countries of the world, it is a mixed economy which is found in the rest of the world mixed economy is also called as free enterprise or capitalistic economy because in a mixed economy most of the means of production are owned by private individuals in a mixed economy private sector and public sector both work side by side. The government controls some important means of production for the welfare of the public.
Advantages Of Mixed Economy:
A mixed economy has many benefits. Mix economy is also called a free economy system because in it you can do any kind of work and anyone kind of business. The government will not bother you in this matter. That is why this system is better for every country. So now read the benefits of a mixed economy:
Control On Inflation:
The government keeps a strict watch on the fluctuation of prices in the country. The government tries to achieve full employment without inflation.
Freedom Of Individuals:
Under a mixed economy, every individual is free to obtain any occupation or operate any business with exception to a certain type of business as restricted by this Estate.
Protection Of Consumer:
If the business is of monopolistic nature, the government interferes and prevents the exploitation and abuse of monopoly power.
Laws For Public Welfare:
The government also forms the laws for the proper supply of necessary services and pure food to the consumers.
Protection Of Labor:
The government passes labor laws in order to protect them from their powerful employers. The government also fixes the minimum wages and working hours.
Control On Essential Industries:
The government takes control of essential industries like weapons, issuing of currency, etc.
Encouragement To Private Sector:
In a mixed economy, the government tries to increases the rate of economic development with the help of the private sector. The government encourages the private sector, which plays an effective role in the mixed economy.
Under a mixed economy, we also find central planning up to some extent by the government. The government makes short term and long term plans in the best interest of the society what kind and what quantity of goods and services shall be produced.
Fair Distribution Of Wealth And Income:
In a mixed economy, it is claimed that there will be a fair distribution of income and wealth for all the people living in a country. The government generally checks the inequality of income by adopting necessary measures.
Middle Of The Road:
Capitalism and socialism are extremely opposite to each other. A mixed economy offers a mild system abandoning the extremities of both capitalist and socialist economies.
Better Economic System:
The system can become ideal if all the good attributes of both socialism and capitalism are adopted and evil dropped.
Disadvantages Of Mixed Economy:
Where there are advantages, there are also disadvantages. There are more advantages than disadvantages, but you still need to know the disadvantages. That is why there are disadvantages of a mixed economy. Let us now know about the disadvantages of a mixed economy.
Possibilities Of Evils:
Rulers and bureaucrats may infect the system in their personal interest; such cases are common in most of the developing countries.
Democracy Or Dictatorship:
The mixed economy flourished under the democratic setup of the government. Countries with a long history of dictatorship cannot progress under the mixed economic system as the success of the economy depends on democracy.
The government generates its income from taxes from the private sector. It also owns a substantial part of the economy. These two sources, added together, bring more money to the government.
Low Efficiency Of Public Sector:
It has been observed that public sector performances are very poor due to government officials because they lack spirit and managerial skills.
In the present age, the dispute between workers and employers is increasing and the government has failed to create co-ordinate between these two classes in the mixed economic system. Now the structure of the mixed economic system has changed to such extent that it can be called democratic socialism.
Countries With mixed economic system:
In the Asian continent, banks, insurance, railway, airlines, coal mines, steel, etc all these public sector industries have been working shoulder to shoulder with the other industries in the private sector.
In Europe, Great Britain is an exemplary country following a mixed economic system where 60 percent of industries have been in the private sector. Now countries following the mixed economic system are also moving to free-market economy privatizing their public sector industries and utilities.
A mixed economic system is also used in Pakistan and we have been following the same system for a long time. We have a lot of political issues here, otherwise whichever country has adopted in a mixed economic system has succeeded very quickly. Our purpose was to convey information to you and we hope that you have understood and liked this information. We will continue to provide similar information on our website if you have liked this information about a mixed economic system so do not forget to share it with your friends.