What is Mixed Economy?

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In a mixed economy there exist a mixture of government control and free enterprise. It can also be defined as a form of economy where the elements of capitalist economy as well as the social economy can be found. Most developed countries of the world have mixed economy. Mixed economy is also known as dual economy. In some areas of a mixed economy the government can even have a monopoly. Typically in mixed economies, the government runs things like postal services, railways and health care services. The influence of the government is considerable even on the industries that are not owned or run by the government, in the form of regulations and taxes. It is very difficult to define the economy of a country as socialist, capitalists or a mixed one. It has been seen lately that the role of government is increasing rapidly after the recent worldwide depression.

In a mixed economy we see the presence of the private economy freedom along with the centralized planning having a common goal of avoiding the problems that are linked with socialism as well as the capitalist system of economy. In the system of a mixed economy, freedom in economic activities is influenced by the licensing policies and regulations of the government. Mixed economy allows the participation of private entrepreneurs in the field of production and in a competitive environment with the objective of making profit. As against some of the features of socialism, mixed economy includes both public and private ownership in production with a view to maximize the welfare of the society.

This article has been written by KJ Singh a MBA Graduate from a prestigious Business School In India
Article Published:February 17, 2012
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