Article Title : Mixed Economy Subject : Mixed Economy Mixed Economy A mixed economy is an economic system in which both the private sector and state direct the economy, reflecting characteristics of both market economies and planned economies.[1] Most mixed economies can be described as market economies with strongregulatory oversight and governmental provision of public goods. Some mixed economies also feature a variety of state-run enterprises. In general the mixed economy is characterised by the private ownership of the means of production, the dominance of markets for economic coordination, with profit-seeking enterprise and the accumulation of capital remaining the fundamental driving force behind economic activity. But unlike a free-market economy, the government would wield indirect macroeconomic influence over the economy through fiscal and monetary policies designed to counteract economic downturns and capitalisms tendency toward financial crises and unemployment, along with playing a role in interventions that promote social welfare. Subsequently, some mixed economies have expanded in scope to include a role for indicative economic planning and/or large public enterprise sectors. There is not one single definition for a mixed economy, with it defined variously as a mixture of free markets with state interventionism, or as a mixture of public and private enterprise, or as a mixture between markets and economic planning. The relative strength or weakness of each component in the national economy can vary greatly between countries. Economies ranging from the United States to Cuba have been termed mixed economies. The term is also used to describe the economies of countries which are referred to as welfare states, such as the Nordic countries. Governments in mixed economies often provideenvironmental protection, maintenance of employment standards, a standardized welfare system, and maintenance of competition. As an economic ideal, mixed economies are supported by people of various political persuasions, typically centre-left and centre-right, such as social democrats or Christian democrats. Supporters view mixed economies as a compromise between state socialism and free-market capitalism that is superior in net effect to either of those. Etymology There is no clear definition and precise meaning of the term mixed economy. There are generally two major definitions of mixed economy, a political and apolitical definition. The political definition of mixed economy refers to the degree of state interventionism in a capitalist market economy, portraying the state as encroaching onto the market under the assumption that the market is the natural mechanism for allocating resources. The political definition precludes an extension to non-capitalist systems and is concerned with public policy and state influence in a capitalist market system, whereas the apolitical definition relates to patterns of ownership and management of economic enterprises in a society. The apolitical definition of mixed economy refers to a mix of public and private ownership of enterprises in the economy and is unconcerned with political forms and public policy
Posted on: Thu, 16 Oct 2014 09:35:34 +0000