7 Strongest Pros and Cons of a Mixed Economy
A mixed economy is the most common type of economy in the entire world. A mixed economy means that parts of the economy are controlled by the free market and other areas of the economy are controlled and regulated by the government. The aim of a mixed economy is to enjoy the benefits of a free market, without losing control over the economy. There are many great things that come from a mixed economy, which is most likely why it is the most common type, but there are some certain problems with it as well. Let’s explore further.
The Pros of a Mixed Economy
1. Less Government Control
In some types of economies, such as a command economy, the government controls all aspects of business, retail, and production of goods. This can be a detriment to the advancement of the people in the country. However, having no control could mean that no supplies are available if they are needed in a disaster. This is why a mixed economy is so well liked, it is a middle ground the provides the benefits of both types of economies with very few of the negatives.
2. Movin’ On Up
The majority of all business is done privately in a mixed economy situation. This is great for the individuals because it allows them to set their own prices, and advance at their own speed. In many other types of economies, people are restricted from earning too much money, and their prices are set for them.
3. A Skilled Referee
Since businesses are left to private owners, the regulations are set by the government. This is because if they are not, then the businesses could come together to inflate prices across the board and hurt the consumers.
4. Competition Is Good
Normally the competition aspect of business isn’t very desired, especially by the business owners themselves. However, competition is great! It’s great for everyone because it causes businesses to be forced be innovate and competitive with their prices.
The Cons of a Mixed Economy
1. It’s a Balancing Act
It can very difficult to create an effective balance system when you have two different people trying to control the same thing. This is what happens in a mixed economy, businesses and the government butt heads over all types of policies and regulations.
2. Taxing Stinks
The government wants to get their piece of the free market pie as well, and this remains true in a mixed economy. The government adds additional taxes onto products and businesses in order to make up the deficit that is caused by allowing a free market economy.
3. Disaster Exploitation
There is no way to predict when a disaster may strike, whether it be a natural one like a hurricane, or an economic one like a market crash, resources and supplies are needed in a quick manner. This can be hindered greatly in a mixed economy Since private companies own all of the businesses that could serve the people affected by these disasters, it can be difficult to get them without them being overly inflated in prices. Businesses can also flat out refuse to help out or lend a hand.
