What Are The Advantages And Disadvantages Of Mixed Economy In United States?

In a mixed economy, both free-market and regulatory forces are at work.  Some see these forces as being at odds with each other; others feel that the economy works at its peak when both forces are working together.  Whatever you believe, many countries, including the United States, have both systems at work simultaneously, and the balance between the two dictates
how the economy, overall, will trend.

In a free-market economy, balance is maintained strictly by market factors.  There is little or no regulation - it is a self-policing group of people and businesses.  Sometimes this works, but as 2008 is showing, sometimes it doesn’t.  Especially in a market-based economy, where people want to make a profit, some unscrupulous folks may enhance their own profit margin at the expense of others, such as the consumer. The tendency toward profit may weaken the self-policing aspects, and the consumer may not receive the best deal.

In a mercantile or socialist economy, the economy is controlled, to some degree, by the government.  In a socialist economy, the government controls all aspects of the economy as a fundamental part of its structure; in a mercantile economy, the government controls some or most aspects of the economy for “the good of the economy”.  While the United States is commonly referred to as having a capitalist or market economy, in reality it is a mixed economy, since the government does have some say in setting regulation.

The advantages of a mixed economy are many.  Depending on the ratio of capitalistic elements to socialist or mercantile elements, there are many freedoms in a mixed economy.  People may go into business for themselves, decide what they will produce or sell, and set their own prices.  Business owners and merchants pay taxes, but they reap the benefits of those taxes through social programs, roads and other infrastructure elements, and other government services.

However, mixed economies also have disadvantages, including the fact that businesspeople need to find their own markets for products, and that they are not in control of the taxes they pay.  Merchants will often complain of tax rates being too high for the services provided.  

Most economies today have moved to some variation of a mixed economy, though the balance toward a socialist, mercantile, or free-market economy can vary widely.  In fact, most economies are in flux, moving from more regulated to less regulated over time, and sometimes swinging back in the other direction.  But another strength of a mixed economy is that the balance can be altered to suit changing conditions, so mixed economy markets should endure for a long time to come.

• Canada is a much freer and much more successful nation and it will only continue to be such provided that its citizens remain intelligent enough to maintain the Mixed Economy. The United States has a relatively high rate of unemployment, homelessness, and poverty compared to most, if not all, of the developed world. Mixed Economics is sound planning, in my opinion, and quite an improvement from the standard Capitalist trends. Which are, as someone here has mentioned, based on false cyclical logic and random prosperity

• A mixed economy keeps significant loss and gain to a minimum as the economy tends to adapt to change. Individual gain depends almost solely on the communities’ success. So, as the community's economic status improves, the citizens of the community prosper. Perhaps the best part of the Mixed Economy System is that it does incorporate some of the values of a market economy; such as the ability to allow an individual to proper when his or her community is in decline. As the individual profits, he or she will begin to pour money back into the community helping the community's economic status rise along with its citizens' success.

• Canada’s mixed market economy has a lot more support from the government for those needing a welfare cheque, but keep in mind our national defense isn't very high so more money can be spent from the government

• there are many freedoms in a mixed economy.  People may go into business for themselves, decide what they will produce or sell, and set their own prices.  Business owners and merchants pay taxes, but they reap the benefits of those taxes through social programs, roads and other infrastructure elements, and other government services.

• Businesspeople need to find their own markets for products, and that they are not in control of the taxes they pay.  Merchants will often complain of tax rates being too high for the services provided

• The mixed economy is helpful in increasing national production in the country. Both public and private sectors work hard to bring about more production. The problems created by free enterprise and too much public control are solved through mixed economy. It provides freedom of enterprise (participation or engagement in such projects: Our country was formed by the enterprise of resolute men and women) ownership and profit earning as well as social welfare and political freedom. And all the national recourses are utilized under mixed economy.

Mixed economy is half way house. It is not helpful in achieving optimal use of national resources. The mixed economy suffers from the drawbacks of both the capitalism and the socialism. Mixed economy seldom achieved progress. Under mixed economy wastage of different types occurs in the economy

• In a mixed economy it is coexisted with capitalism and socialism. Behind this idea is to the benefits of both systems without any draw backs.

• Countries who have adopted mixed-economy seem to achieve a better overall standard of living than the true capitalist nations, for e.g. Japan, India, Denmark, New Zealand etc. To escape the tyrannical rule of the capitalist policy, the mixed- economy provides the lower classes an opportunity of welfare, education and tax-benefits to the middle-classes.

• The level of control that the government assumes within a mixed economy leads to the government having a major role in the delivery of its own services. At the same time, the private sector will have an important role in helping to build government infrastructure to deliver these services. This can cause an increase in overall production and/or efficiency.

• Given this, a drawback would accure if the government failed to clearly identify the method of infrastructure it needs from the private sector. Production may not keep up with supply and demand of the general population and create a surplus, or deficiency of goods or services, this then contributes to loss revenue/profits.

• Many mixed economies maintain a healthy welfare system to support the unemployed and provide health care to the general population. This can guarantee that properly qualified health care professionals and wealfare workers are trained prior to employment. This also ensures that the lower level income bracket is able to access a minimum same level of quality healthcare and treatment as the higher income bracket of society.

• On the other hand, certain aspects of the welfare system may be taken advantage of far too often, ultimately leading to a loss of government funds. Medical professionals may see better business opportunities within the realm of private practice. Certain individuals may want a higher quality level of health care than is available from government regulated institutions and may not have a choice or freedom to choose.

• Corporate structure (within certain industries) is more heavily regulated leading to less corporate greed. An adverse example would be that of the Enron case which left hundreds of employees without a retirement fund. Such a company regulated under state control would limit this particular type of greed, thereby protecting the rights of individuals.

• Let’s face it however; typically the methods of retirement under a business which operates under a market based economy can yield a better return for what an employee invests. This is primarily due to more options available while not being only limited to what the state owned and regulated corporation offers. In addition, a corrupt government can also skim retirement funds into the coffers of the few.

• When conducting business in some mixed economies, Guanxi, or personal relationships, can be of benefit and get you ahead when you seemingly can’t find other methods.

• This of course plays a downside within structure of business ethics in some mixed economies. Certainly people in the United States would debate the issue. Such methods as guanxi to establishing business ventures, or business transactions can lead to what some may consider corruption or bribery