Understanding Mixed Economic System, History, Objectives, Characteristics, Strengths, Disadvantages

Mixed Economic System: Definition, History, Purpose, Characteristics, Strengths and Disadvantages – In this discussion we will explain about a mixed economic system. Which includes the understanding of a mixed economic system, the history of a mixed economic system, the purpose of a mixed economic system, the characteristics of a mixed economic system, the advantages and disadvantages of a mixed economic system with a complete and easy discussion understood.

Mixed Economic System: Definition, History, Purpose, Characteristics, Strengths and Disadvantages

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Understanding Mixed Economic System

A mixed economic system is an economic system that combines a market economy system (liberal) and an economic system centralized (command), which in this economic system the government and the private sector (individuals) work together in carrying out activities economy. Countries that adopt a mixed economic system include Morocco, Malaysia, the Philippines, France, and China.

Another definition of a mixed economic system is an economic system that combines more than one aspect of the economic system. What is often a mixed economic system contains elements of capitalism and socialism.

History of Mixed Economic System

The mixed economic system emerged because there was a strong conflict between the holders of the ideology of liberalism (capitalism) which uses a market economy system with the holder of the ideology of Socialism (communism) which uses a system of command economy.

Because of the many conflicts between the two groups, experts are trying to create an economic system in a way that combines the basic characteristics of the two ideologies by taking the best elements of both.

One of the theories used in the creation of a mixed economic system is the theory stated by Hegel. Hegel states that the development of a thought will reach its best form through a dialectical process (communication) towards a synthesis.

Furthermore, countries that reject the ideologies of liberalism and communism begin to discuss ideologies that can be used applied to their country, used mixed ideologies and also became the basis for the emergence of an economic system this mix.

The Purpose of a Mixed Economic System

The purpose of the government to participate in a mixed economic system is to complete the economic activities that are needed experiencing sharp economic fluctuations or waves, besides protecting the oppressed people who move and weak.

This means that the purpose of a mixed economic system is to avoid complete control of the economic resources of the community. Government intervention takes the form of regulations that aim to monitor and regulate economic activities carried out by the private sector so that they run according to reasonable norms.

In addition, the government also has policies and regulations in the fiscal and monetary fields which aim to: so that the economy runs smoothly and rapidly without economic problems such as unemployment and inflation.

Characteristics of a Mixed Economic System

There are characteristics of a mixed economic system, namely:

• The government and the private sector have an active and equal role in economic activity (government and private sector have the same role)
• Vital resources related to people's livelihoods are controlled by the government
• The types and quantities of goods produced are determined based on the market mechanism
• The private sector has freedom at the limits set by the government
• Planning, regulation and policy making in the economic sector are prepared by the government
• The competition that occurs in the market is net competition which is directly supervised by the government

Advantages of Mixed Economic System

The advantages of a mixed economic system include:

• Individual rights are recognized
• Guaranteed economic stability
• The pricing of goods can be controlled
• The government cares about the needs of the people
• There is no monopoly either by the government or the private sector
• Free competition makes economic development run in a better direction
• Individual initiative and motivation to make his life better still exists
• The private sector cannot arbitrarily use resources
• Everyone has the same opportunity to get the maximum profit

Disadvantages of Mixed Economic System

Disadvantages of a mixed economic system include:

• The burden on the government is heavier than the private sector
• Existing capital resources are very influential on the success of making it easier for the rich to become richer
• Although the role of the government is very large, economic problems such as inflation, unemployment, and others will still emerge and develop
• It is very difficult to equalize income
• There is no clarity on how much influence the government has in economic activity.
• Economic growth tends to be slower than with a market economy system (liberal)

Thus it has been explained about Mixed Economic System: Definition, History, Purpose, Characteristics, Strengths and Disadvantages, hopefully it can add to your insight and knowledge. Thank you for visiting and don't forget to read other articles.