Mixed economies.docx

8/9/2019 Mixed economies.docx

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Mixed economies

There is a third type of economy involving a combination of market forces and central

planning, called mixed economies.

Mixed economies may have a distinct private sector, where resources are allocated primarily

by market forces, such as the grocery sector of the UK economy. Mixed economies may also

have a distinct public sector, where resources are allocated mainly by government, such as

defence, police, and re services. n many sectors, resources are allocated by a combination

of markets and panning, such as healthcare and, which have both public and privateprovision.

n reality, all economies are mixed, though there are wide variations in the amount ofmix and the balance between public and private sectors. !or example, in Cubathegovernment allocates the vast ma"ority of resources, while in #urope most economieshave an even mix between markets and planning.

#conomic systems can be evaluated in terms of how efcient they are in achievingeconomic ob"ectives.

http$%%www.economicsonline.co.uk%&ompetitive'markets%#conomic'systems.html
http://www.economicsonline.co.uk/Managing_the_economy/Introduction_to_managing_the_economy.html/The_public_sector.htmlhttp://www.economicsonline.co.uk/Global_economics/Development_cases.htmlhttp://www.economicsonline.co.uk/Competitive_markets/Evaluation_of_%20market_%20systems.htmlhttp://www.economicsonline.co.uk/Competitive_markets/Economic_systems.htmlhttp://www.economicsonline.co.uk/Global_economics/Development_cases.htmlhttp://www.economicsonline.co.uk/Competitive_markets/Evaluation_of_%20market_%20systems.htmlhttp://www.economicsonline.co.uk/Competitive_markets/Economic_systems.htmlhttp://www.economicsonline.co.uk/Managing_the_economy/Introduction_to_managing_the_economy.html/The_public_sector.html


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A "mixed" economy is a mix between socialismand capitalism. It is a hodgepodge of

freedoms and regulations, constantly changing because of the lack of principles

involved. A mixed-economy is a sign of intellectual chaos. It is the attempt to gain the

advantages of freedom without governmenthaving to give up its power.

A mixed-economy is always in flux. The regulationsnever produce positive results,

because they always force people to act against their own interests. hen a particular

policy fails, it is propped up by other regulations in the hopes that more control will

produce better results. !ometimes the results are so destructive they must either be

removed, or the people must be violently oppressed to make them accept it.

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Mixed Economy

Mixed economy is combination between capitalist and socialist economy. It is an

economy system where price mechanism and economic planning authority are used

simultaneously. Hence there are both private and public ownership of means of production and

distribution. Household and firms and some other take some decisions by planning authority.

Features of Mixed Economy

1) Public sector all decision regarding what! how and for whom to produce is taken by the state. Public

utilities such as road construction! power supply! water supply are in the side of public sector. "hese

public utilities are operating for societal welfare maximi#ation not for profit motives.

$) Private sector "here is private sector in which production and distribution of goods and services arecarried out by private enterprise. Profit motive is the guiding principle in this sector.

%) &oint sector there is 'oint sector where both state and private 'ointly run enterprise. It is organi#ed on

the basis of a 'oint stock company where ma'ority of shares are held by the state.

() reedom and control in mixed economy there is every freedom to own private property! earn profit! to

consume! produce! distribute and to have any occupation of choice without limitations until and unless

such possessions have an adverse effect on public welfare so that state intervenes in order to control and

regulate the situation.

*) +conomic planning "here is a central planning authority in a mixed economy. In this system!

economy operates on basis of some economic plan. ,ll sectors of economy function in accordance with

the ob'ectives! priority and targets laid down in the plan.

Advantages of Mixed Economy

1) -est allocation of resources since mixed economy incorporate the goods features of both capitalism

and socialism! the resources of the economy are utili#ed in best possible manner.

$) eneral balance mixed economy maintains a general balance between the public and private sectors.

"here is competition as well as co/operation between the two sectors which is conducive atmosphere for

achieving a high rate of capital accumulation and economic growth.
http://www.importanceofphilosophy.com/Bloody_Socialism.htmlhttp://www.importanceofphilosophy.com/Politics_LaissezFaire.htmlhttp://www.importanceofphilosophy.com/Politics_NecessityOfGovernment.htmlhttp://www.importanceofphilosophy.com/Bloody_Regulation.htmlhttp://www.importanceofphilosophy.com/Bloody_Regulation.htmlhttp://www.importanceofphilosophy.com/Bloody_MixedEconomy.htmlhttp://www.importanceofphilosophy.com/Bloody_Socialism.htmlhttp://www.importanceofphilosophy.com/Politics_LaissezFaire.htmlhttp://www.importanceofphilosophy.com/Politics_NecessityOfGovernment.htmlhttp://www.importanceofphilosophy.com/Bloody_Regulation.htmlhttp://www.importanceofphilosophy.com/Bloody_MixedEconomy.html


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%) 0elfare state mixed economy contains all the features of the welfare state that provides social

services such as health care! unemployment pay etc. to people who need them. "herefore! there is no

exploitation either by the capitalist under free enterprise economy or by the state under centrally planned

economy.

() tability it ensures stability by reducing high unemployment and income ine2uality associated with

capitalist economy.

Disadvantages of Mixed Economy

1) 3on/cooperation between the two sectors experience has shown that in mixed economy private and

public sector do not see eye to eye with one another. "hey are at loggerhead because of their disparity in

motives and as such they are not cooperative with one another.

$) Inefficient public sector public sector of mixed economy is a bit burden on economy because it works

inefficiently. "he bottlenecks! which militate against efficiency of public sector! are bureaucratic control!

over staffing of personnel! red/tepism! corruption! and nepotism among others. "hese bring about decline

in production and huge loss.

%) +conomic fluctuation "he experience of the working of mixed economic system in developed

countries also reveals that they have not been able to remove economic fluctuation.

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http$%%www.scool.co.uk%alevel%economics%freemarketvcommand

economies%reviseit%theoreticaleconomicsystems

MIXED ECONOMIES

A mixed economy is a mixture of a pure free-enterprise market economy and a command economy.Nearly every country in the world operates a mixed economy although the "mix" can change. There is aprivate sector and a public sector in the economy

In recent years many command economies have become mixed economies. xamples include countriesthat were part of the former !oviet nion. To become a mixed economy# the role of the market and theprivate sector of the economy must be increased. This can be done in a variety of ways - listed below$

%rivatisation of state industries

&e-regulation of markets promoting increased competition through the entry of new firms

A gradual ending of state subsidies

ncouraging foreign investment into the economy
http://www.princeton.edu/~achaney/tmve/wiki100k/docs/Mixed_economy.htmlhttp://www.s-cool.co.uk/a-level/economics/free-market-v-command-economies/revise-it/theoretical-economic-systemshttp://www.s-cool.co.uk/a-level/economics/free-market-v-command-economies/revise-it/theoretical-economic-systemshttp://www.princeton.edu/~achaney/tmve/wiki100k/docs/Mixed_economy.htmlhttp://www.s-cool.co.uk/a-level/economics/free-market-v-command-economies/revise-it/theoretical-economic-systemshttp://www.s-cool.co.uk/a-level/economics/free-market-v-command-economies/revise-it/theoretical-economic-systems


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Mixed Economic System

Features:

- Economic decisions are taken by the price mechanism system and also by thestate

- The private business sector operates along the lines of the free market

economy, where the price mechanism determines allocation of resources.

- The aim of the private sector is to maximise profits while the aim of the public

sector is to maximise social welfare

- The public sector produces goods and services that the private sector is unable

or unwilling to produce, with a bureaucratic set up like the planned economy

Examples:

aribbean !egion"nited #tates of $merica

$dvantages:

%. The state can intervene in areas of the economy through the passing of laws

to protect citi&ens from unfair trading practices.

'. (oth the government and the private sector can cooperate in offering certain

services) e.g. transportation, health care.

*isadvantages:%. Too much government regulation may dampen the free enterprise spirit.

'. #ome state-owned industries are allowed to operate inefficiently, thus

wasting resources.

+. here government intervenes in the market by setting maximum and

minimum prices, this may cause excess demand or supply, which may be

difficult to regulate in the long-run.

. #ince the private sector helps to answer the economic uestions, there can

be the creation of monopolies.

/. 0neuitable distribution of wealth can also arise.

*ecision makers in this economy:

%. $ onsumer is one who uses goods and services to satisfy his1her wants. The

goal of the consumer is to maximise his1her satisfaction.

'. $ Firm is a producer of goods and services. The goal of the firm is to

maximise profits.


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+. $ Factor owner is one who owns the various factors of production. These are

the resources needed to produce goods and services to satisfy wants.

. The government functions as a guide in economic activities of a country.

2overnments intervene by either nationalising or regulating policies of

industries.

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- the allocation of resources

- the organi&ation of production- the distribution of finished goods and services

- the promotion of economic progress

- the maintenance of economic stability

hat to produce3

oncerns allocation of resources among alternatives, i.e. the economy must

allocate the varieties of goods and services which yield the greatest satisfaction to

the consumers.

4ow to produce3

This deals with utili&ing the most efficient process to produce the goods and

services. 5roduction is said to be inefficient when it is possible to reallocate

resources and, as a result, produce more of at least one good without producing

less of any other good.

For whom to produce3

The ideal distribution of goods and services is eual distribution among all members

in the economy. 4owever, in the real world this is never achieved.
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6egiatan ekonomi yang vital dan menguasai ha7at hidup orang banyak dikuasai

oleh negara.

6egiatan ekonomi ayng di7alankan oleh pihak swasta terbatas, yaitu pada bidang

yang tidak menguasai ha7at hidup orang banyak.

8ekanisme kegiatan ekonomi yang ter7adi di pasar ada campur tanganpemerintah agar tidak ter7adi persaingan dan saling merugikan.

5eranan pemerintah bersifat mendorong, membimbing, dan mengawasi dan

memberikan bantuan kepada sektor swastaa dalam perekonomian.

4ak milik perorangan atau swasta diakui, tetapi penggunaanya tidak boleh

bertentangan dengan kepentingan rakyat banyak.

&iri dari sistem ekonomi campuran adalah $

*. Merupakan gabungan dari sistem ekonomi pasar dan terpusat

-. (arang modal dan sumber daya yang vital dikuasai oleh pemerintah

. /emerintah dapat melakukan intervensi dengan membuat peraturan, menetapkan

kebi"akan skal, moneter, membantu dan mengawasi kegiatan swasta.

0. /eran pemerintah dan sektor swasta berimbang /enerapan sistem ekonomi

campuran akan mengurangi berbagai kelemahan dari sistem ekonomi pasar dankomando dan ditu"ukan untuk meningkatkan kese"ahteraan rakyat.

1ecara umum saat ini hampir tidak ada negara yang murni melaksanakan sistem

ekonomi terpusat maupun pasar, yang ada adalah kecenderungan terhadap ekonomi

pasar seperti 2merika, 3ongkong, dan negara4negara eropa barat yang berpaham

liberal, sementara negara yang pernah menerapkan ekonomi terpusat adalah Kuba,

/olandia dan 5usia yang berideologi sosialis atau komunis.

Kebanyakan negaranegara menerapkan sistem ekonomi campuran seperti /erancis,

Malaysia dan ndonesia. 6amun perubahan politik dunia "uga mempengaruhi sistemekonomi, seperti halnya yang dialami Uni 1oviet pada masa pemerintahan (oris 7eltsin,

kehancuran komunisme "uga mempengaruhi sistem ekonomi soviet, dari sistem

ekonomi terpusat 8komando9 mulai beralih ke arah ekonomi liberal dan mengalami

berbagai perubahan positif.

1.Pengertian Sistem Ekonomi Campuran


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#istem Ekonomi ampuran adlah sistem ekonomi yang menghendaki kegiatan

ekonomi ditangani dengan cara ker7a sama antara pemerintah dan swasta. *alam

sistem ini, sektor swasta dan pemerintah sama-sama diakui keberadaanya. 5emecahan

masalah perekonomian mengenai barang apa yang akan diproduksi dan berapa

banyaknya, ditangani bersama-sama antara pemerintah dan swasta. #istem ekonomi

campurang merupakan perpaduan antara sistem ekonomi liberal dan Terpusat,

sehingga dengan sistem ekonomi campuran ini diharapkan tercapai efisiensi,

pemerataan, dan keadilan pembangunan ekonomi serta dapat melindungi ekonomi

dalam negeri. #istem ekonomi ini banyak dipakai oleh negara-negara berkembang.

8enurut 9emhannas %;

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Mixed economies.docx