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 Mixed Economy:
A mixed economy combines elements of both the planned and the market economies in one
cohesive system. This means that certain features from both market and planned economic systems are
taken to form this type of economy. This system prevails in many countries where neither the
government nor the business entities control the economic activities of that country - both sectors play
an important role in the economic decision-making of the country. In a mixed economy there is
flexibility in some areas and government control in others.
Mixed economies include both capitalist and socialist economic policies and often arise in
societies.
Mixed economy has several meanings. One of which is to mix "socialist" and "capitalist" aspects.
Another meaning is to have a variety of capital producing markets, like "farming" and "industry." A
socialist economy has the government controlling many of the key aspects of the economy, such as
public schools, police department, fire department, military, museums, libraries, and streets, or sewers.
The government manages those above, raises taxes for support, and makes plans for future expansion,
or repair of the same. Pure Capitalism, as opposed to a mixed economy, would have private businesses
own the schools, libraries, museums, streets, sewers, fire department, ect. Then anyone who wanted to
go to school, use the library, streets, or have a fire put out would have to pay a fee, or purchase the
right to use that private property. There'd be NO public property. I think you can see that under Pure
Capitalism, rather than a mixed economy, many poor people, unemployed, retired, all would be in a
terrible position, not able to participate in the economy, because of their lack of money. Only the very
rich could survive in such a system. Mixing in some socialistic aspects, i.e., government
ownership and control, there can be sharing of key resources, and the poor would have access to key
services, like an education, use of streets (no toll roads).
Features of Mixed Economy:
(i) Private and public sector exist side by side. Thus, economic activities are carried out by
individuals as well as the government.
(ii) Private and public sectors are required to function in a properly coordinated manner.
(iii) A part from national security, government engages itself in those activities that the private
enterprises consider as unprofitable or beyond this reach.
(iv) All basic and heavy industries and other strategic sector of an economy e.g., banking,
transport, energy etc. are controlled by the government. Agriculture, consumer goods and other
industries trade are left for the private sector.
Advantages of Mixed Economy:
Since mixed economy involves both government and private enterprises it has the advantage of
taking the benefits of capitalist nature of private companies and socialist nature of government.
There is less inequality of income because intent of government is to have a balanced economic
growth of an economy.
Mixed economy allows individuals to run their business and make profits but at the same time it
places some responsibility on these companies by inducing them to contribute towards the welfare of
society.

Disadvantages of Mixed Economy:
Since welfare of society is important in a mixed economy it leads to lower than optimum use of the
resources because government mobilize the resources towards the production of those goods and
services which are beneficial for the society as a whole rather than producing those goods and services
which in economic terms are more beneficial for an economy.
Under mixed economy private enterprises have to face lot of difficulty because of various
government loopholes like favoritism and bureaucratic nature which is prevalent in mixed economy.
As one can see that mixed economy like socialist and capitalist economies has both advantages and
disadvantages and therefore it will be always debatable whether a country should follow mixed
economy structure or not.

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Mixed economy

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