Mixed Economies - an Economic System That Combines Government Control with Private Ownership

Mixed Economies

A mixed economy is an economic system that combines government control with private ownership. In this type of economic system, the country's resources are owned by private businesses and the government. In a mixed economy, the government controls about 30% of the resources and about 70% is privately owned. Government involvement and control changes depending on the political party in power. Some of the characteristics of a mixed economy that set it apart from other economic systems include individuals and the government sharing in economic decision making and individuals and the government also making decisions about what to produce.

An example of a mixed economy is Canada. Canada is considered a mixed economy because it charges higher taxes in order to fund essential services such as healthcare, employment insurance, and public pension plans which provide for the collective good. In Canada services and resources are provided either by the government or by privately owned businesses. While Canada provides for the basic needs of its citizens, these individuals are still left with the freedom to enhance their social position through the pursuit of their personal goals as they would if they were within a market economy structure.

A mixed economy has many advantages. It combines the best of both a centrally planned economy and a market economy. A mixed economy creates greater equality than a market economy and provides a safety net to prevent people living in absolute poverty. At the same time, a mixed economy still gives people a chance to enjoy the financial rewards of hard work and risk taking. A mixed economy also prevents monopolies and keeps businesses competing with each other therefore keeping prices reasonable for consumers. One advantage of operating Project Business within a mixed economy was that we could pick what room we would sell from and what we would sell. This system benefited our business since we were able to get a good room to sell from and we were able to use a fridge so our stuff didn't go bad. In Project Business we could also sell the same item as another business group. This created competition between the different business groups and kept prices reasonable enough for there to be demand from the consumers. If needed, each group was given ‘float money’ which provided them with a safety net. This is similar to the government providing certain essential services or financial incentives for business to start up. However even with this safety net, the potential for a group to fail was still present.

Although there are many benefits to a mixed economy there are disadvantages too. For example it is harder to become rich and if you become rich it is harder to accumulate more wealth than if you were in a market economy. In a mixed economy people are taxed more than in a market economy where