What is Mixed Economy | Types | Capitalist and Socialist Economy

 Mixed Economy

Mixed economy is an economy which combines the element  of both the capitalist and socialist economies.

• It attempts to combine the best features of both capitalism and socialism while excluding the Demerits of Both.

 

Two types of Mixed Economy

     1. Government does not directly undertake Production activity.

• This exists in most of the developed countries such as the USA, UK, etc.

    2. Where Government not only Regulates the Private Sector, But also Participates in the Production activities.

 

 

Features of Mixed Economy

• Co - existence of Public and Private Sectors.
• Features of both Capitalism and Socialism.
• Government regulates and controls the Private Sectors.
• Price mechanism
• Profit Motive.

Capitalist Economy

•  In Capitalist  form of economic system the means of Production and Distribution are Privately own,  and Production is guided Largely through Operation of markets.
  

        The ideology of Capitalism was expressed in Adam Smith's wealth of Nations   ( 1776 ) and Smith's Free - market theories were widely accepted in the 19th century.

 

        

         It is Prevalent in many countries, Viz, the USA, U.k, France, Japan, Australia and the most of the countries in western Europe.

 

Socialist Economy

Socialism refers to the concept of giving ownership to the government as a

 whole, regarding all activities of that particular country. Similarly, if the 

government controls the economic activities, then it is termed as a socialist

 economy, and the system, which is following it, is called a socialist financial

 system.