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MIXED ECONOMY

Mixed economy is an «economy that combines capitalism and socialism». Some sources prefer the use of «command economy» over «socialism» in defining a mixed economy.
We have seen that there is some use of the market mechanism in planned economies, there is some measure of state control in free market economies. Here the term mixed economy is used; it describes most of the economies in the noncommunist world. These countries are basically market economies, but all contain elements of state enterprise and governments in all of them intervene to modify the operation of market forces. They are mixtures of command and market economies.
In these mixed economies private property is an important institution. Supporters of the mixed system hold the view that private property provides an important incentive for people to work, save and invest. They oppose the abolition of private property and argue that it is possible to present great inequalities of wealth from arising by the appropriate government measures (heavy taxation of income and wealth).
The mixed economy has come into being as a result of increasing government intervention and control in capitalist countries. This development has been particularly extensive during the XXth century. The most famous mixed economy in the world is that of the UK.
The components of the mixed economy are:
a) A free enterprise sector, where economic decisions are taken through the workings of the market.
b) Government regulation of the economy through its budgets, etc.
c) Public ownership of only some industries.
d) Welfare services, either provided by the state or supplied through state administered schemes.

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