What Are The Advantages And Disadvantages Of Mixed Economy?


6 Answers

jamila khan Profile
jamila khan answered
The mixed economy refers to such an economic system wherein two the sector exist and function for achieving national objectives. The two sectors are the public sector and private sector. Both these sectors exist and function for achieving national objectives. Both these sectors make the economic system of the country. In fact the mixed economy is the happy combination of private enterprise with government enterprise on the one side there is freedom of enterprise, private ownership and profit earning. On the other side there is government guidance and control so as to stop evil economic, pressures. In order to remove the effects of the capitalistic economy, mixed economy has been introduced. It prevails in most of the countries of the world.

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 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. It suffers from continues back wardness. Under mixed economy wastage of different types occurs in the economy.
Shujing Profile
Shujing answered
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.
Zed Seven Profile
Zed Seven answered
The advantages of a mixed economy system is that the system advocates social welfare. The government considers persons well being and ensures that they are not being exploited by companies, insurance companies etc. In a mixed economic system there is some government intervention of the market as well as private ownership of property. It allows for persons' pursuit of their own happiness and self interest also.
Anonymous Profile
Anonymous answered

The government would control the natural resource and set rules like deciding what product to be sold by the private companies or business.

Ramona  Vandusen Profile
Ramona Vandusen answered

Mixed Economy is an economical system which unites in itself
the features of capitalism and that of the socialism.

Advantages of Mixed Economy

1. State provides the essential services
2. Private sector encouraged for profits
3. Competition keeps prices low
4. Consumer choice
5. Inefficient business behavior controlled

Disadvantages of Mixed Economy

1. Heavy taxes reduce incentives to work hard or make
2. Less efficient than private sector
3. Excessive control over business activity can add costs
and discourage enterprise

Ellie Hoe Profile
Ellie Hoe answered
The mixed economy is an economic system in which two sectors exist: Public and private sector. Both these sectors help in making economic system of the country. Advantages of mixed economy in that, lots of goods are available. The mixed economy helps increasing national production in the state. Both public and private sectors work to introduce more production in the market. The problems formed by free enterprise and public control are resolved with the help of mixed economy. It gives liberty of enterprise ownership and profit maximization. All the national recourses are used under mixed economy. This type of economy is half way house. It is not useful in getting best use of national resources. There lack of co-operation between private sector and public sector. In Mixed economy the public sector develop fast, therefore the government expenses increases many time ,in contrast government returns are always short for it.

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