MIXED ECONOMY AND IT’S FEATURES
Mixed economy may be defined as the type of economic system in which both the private and public ownership of means of production and distribution exist together in a country.
Under this economic system, resources or means of production are jointly owned and managed by both public and private interests. The system is a mixture of elements of both capitalism and socialism.
Examples of countries which operate mixed economy are Britain, Egypt, Peru, Tanzania, Nigeria, Kenya, Mexico, etc.
Features of Mixed Economic System
- Joint participation: In a mixed economic system, there is joint participation of both the private sector and the state in the provision of goods and services.
- Joint decisions: Decisions on what is to be produced and the quantity are jointly taken by both the private are public sectors.
- Freedom of choice: Consumers in this system have freedom of choice.
- Checks and balances: The combination of both private and public sectors helps
- Economic freedom: There is also economic freedom in the area production, consumption and distribute of commodities.
Fair competition: Since the system accommodates the private and state ownership of means of production, results in fair competition.
Advantages of Mixed Economy
- It encourages private initiative Private initiatives in this type of economy
system are highly encouraged.
- There is freedom of choice: Consumers and even producers in this type of economic system have a v,
range of choice to make.
- Combines the good qualities of capitalism and socialism: Mixed economy combines the good qualities both capitalism and socialism.
- Equitable distribution of incorporation: Mixed economy ensures that incomes a equitably distributed among the citizens
- It ensures economic development: The mixed economic system promotes economic activities, thereby leading economic growth of a nation.
- It ensures job security: This system also promotes the security of job and employment
- It prevents monopoly: Monopoly is prevented because of the joint participation in economic activities by both the private sector and the state.
Disadvantages of Mixed Economy
- Inequality of wealth: Wealth is not equitably distributed as there is a wide gap between the rich and the poor.
- Emphasis on profit: There is more emphasis on profit maximization at the expense of welfare of the citizens.
- Lack of efficiency: Efficiency scarcely occurs in this type of economic system because of the involvement of the state.
- Mixed-up economic system: The mixing of the capitalist and the controlled economic systems creates lots of problems in the society; problems of workable understanding and domineering influence.
- Corruption and mismanagement: There is a high level of corruption and mismanagement of resources in a mixed economy.
- Exploitation of labour: Labour is usually exploited heavily in a mixed economic system. It should be noted that there is no country in the world which has absolute socialism or capitalism. In each
country, there is some private and state ownership of means of production. It is the level of private and state ownership of means of production that determines whether such a state is capitalist is
- loans for businesses
- how to establish enterprises
- what is a firm
- price equilibrium
- scale of preference
- concept of economics
- economic tools for nation building
- factors affecting the expansion of industries
- mineral resources and the mining industries