The Mixed Economy
By Connor Holton
Mixed economies have the advantage of government intervention in a majority private sector environment. It ensures that large businesses don't gain far-reaching monopolies. Both public and private sectors coexist, combining command and market economies to form a cohesive mesh of government regulation and free enterprise. Mixed economies are generally large and well-knit, meaning they are harder to crash; they are not immune to crashes or hardships though, as proven several times in the last century. At times it is hard to determine how much government intervention is enough, or how much is too little. Government intervention and social policies are the safety net which helps to pull pieces back together, and to make sure they don't grow too large at the expense of the rest of the economy.
What to produce? - Production of common goods falls under the jurisdiction of the private sector and individual businesses. However, some essential services such as food, water, and waste disposal are all controlled and regulated by either the state or federal government.
How to produce? - A healthy private sector provides a strong boost to how much of a product is produced, and how quickly it is produced. In order to optimize production of goods, opportunity costs must be taken into account. Efficiency must be balanced in order to ensure the maximum output of goods at the highest quality.
For whom to produce? - Mixed economies exemplify consumer sovereignty, meaning that consumers create the demand, which in turn creates the supply. Market economies have their stake in a mixed environment through the consumer/producer, supply/demand relationship.
Notable Examples of Mixed Market Economies:
- The United Kingdom
- The United States