Mixed economy - the advantages and disadvantages

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mixed economy - a system which is based on a combination of different forms of ownership and development of which is regulated by the market, national traditions and restrictions of the state.

Today the mixed economy is the most progressive and the country in which the set so (Japan, UK, Germany, Sweden, Italy, etc.) are the most developed and provide their people the highest standard of living.

Signs of a mixed economy

mixed economy (also called hybrid) includes the principles of the market, and even the traditional planned economies.For example, the foundation of the Japanese "economic miracle" is a special traditional style of farming, typical of this country.

for a mixed economy is characterized by the concentration of the main part of the productive forces in private hands, and the government has certain privileges and often has a monopoly on public resources or important economic assets (utilities, natural resources, and so on. D.).The level of state intervention in the economy can be quite high (50% controlled economic resources) and lower (20%).In this way the state provides social policy, to replenish the budget, creating reserves and performs its other function.A mixed economy is further characterized by government intervention in the matter of licensing and quota production volumes, setting solid of maximum prices for certain social types of goods (essential foodstuffs, medicines, children's and school goods, fuel, health care, etc.).The state can also affect the economic system by establishing tax policies and redistribution of income, thus aligning living standards between rich and poor.

mixed economy - benefits

In a mixed economy, the state, producers and consumers are playing quite an important role in addressing the core issue of the economy: "what, how, how much and for whom to produce."This allows you to combine economic efficiency with the needs of the population, reducing social tensions within the country.In such a system is more or less balanced, is not detrimental to the development of the market monopoly (except for strategic and social goods) and are not allowed deficit that undermines the state from within.

One subspecies of the mixed economy is a "socially-oriented economy", which combines the preservation of competition, freedom of the market and the state protect the public from unscrupulous market participants and the negative effects of the market economy.

mixed economy - shortcomings

Nevertheless, the mixed economy has its drawbacks.First, it is, as opposed to the planned, can not completely get rid of such negative consequences, such as unemployment, inflation, excessive social gap between rich and poor.Excessive bias in favor of a planned economy can lead to slippage of economic reforms, stagnation in the renewal of production assets, lower quality goods.Excessive deviation in the traditional economy could also be disastrous for the entire system, as it often does not take into account the current needs of the market and hinders the process of globalization, hindering manufacturers to enter new markets.

However, today it is a mixed economy is the most socially acceptable and to a greater extent than other systems, provide economic growth and development.