The Advantage of Mixed Economy

A heterogeneous economy lies between the opposite poles of a free-market economy and a centrally planned, or neighborlyist, scheme. A merge governing body combines capitalist and socialist elements, and is neartimes referred to as a third way. Most nations, including the fall in States, operate mixed economies with varying combinations of capitalist and socialist features. obscure systems offer a variety of benefits, including free enterprise and private ownership, as well as a social safety net and the capacity for regimen activity intervention when needed.Free Enterprise Free enterprise and private ownershiptwo essential characteristics of a free-market economyremain part of a mixed economic system. Under such a system, individuals are free to own property and operate for-profit businesses. The specific direct and extent of free enterprise varies crossways countries. Some nations, such as the United States, emphasize free enterprise and private ownership of industry, wh ile other countries systems involve state ownership of some industries, such as transportation, energy and utilities. In addition, privately owned industries may be subject to a variety of government regulations.Social Safety net One of the primary benefits of a mixed economy is the existence of a government-funded social safety net, which exists to provide at least a minimal level of subsistence for citizens. Sometimes referred to as a welfare state, the benefits nether this safety net include, but are not limited to, a publicly funded healthcare system for all citizens or at least some segments of the population, minimum wage laws, unemployment insurance and a publicly funded pension system. A pure market system with private ownership of industry and only minimal state intervention in the economy would, in theory at least, leave such social benefits to private charities. The United States mixed economic system includes the Social Security system, a federal minimum wage law and he althcare benefits for the elderly under Medicare. Other nations, such as Canada, have universal healthcare systems.Ability to Intervene The mixed economic system is based on the idea that government can improve economic outcomes through fiscal or monetary policy action. A mixed system gives government the flexibility to intervene in the economy in times of emergency. The best example of this was in 2008, when a global financial crisis threatened to plunge the economy into a global depression. The United States and other nations moved to stabilize their financial systems. The U.S. government, for its part, provided more than $700 billion in bailout funds to enable the nations banks to clear toxic assets, backed by troubled mortgages, from their books.