What Are The Weakness Of Mixed Economic System?

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What Are The Weakness Of Mixed Economic System?

2 Answers

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Answer 1

There are certain weaknesses in a mixed economic system. Firstly, since in a mixed economy both the private and public sector exists side by side therefore, the private sector businesses might find it difficult to operate in the economy since there will be problems in balancing these two sectors and hence might lead to conflicts between them. Then there can be the problem of shortage of capital. The Government intervention on certain resources allows the firms to produce public goods, merit goods and services to cover the cost of manufacturing thse goods which will raise lot of tax from the people as well as from the firms. Also when there is too much of government intervention to regulate or control different markets, there may occur social evils like bribery and corruption.

Answer 2

The major disadvantage of a Mixed Economic System is that it increases the influence of state in individual affairs. State ownerships have their own cons as they are generally prone to corruption and tend to have their own can of worms in practical terms. Ideally an Economic System is supposed to uplift the living conditions in any society, a mixed economy tends to do just that by trying to take the best ideals from each economic system and incorporating them into a mix. In practical terms however the real challenge comes from striking a balance between various systems and not just rely on rudimentary dogmas articulating the business dealings in practical terms. Besides, it also tends to strain an average individual by stripping them off a significant portion of their incomes to generate funds for the welfare of others.