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- DictionaryMixed e·con·o·my/ˈˌmɪkst əˈkɑnəmi/
noun
- 1. an economic system combining private and public enterprise.
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hybrid economy. planned economy. state interventionism. private and public enterprise. “A mixed economy combines the principles of a market economy with governmental provision of public goods.”. Noun. . Structure and processes that manage production, distribution, and consumption of goods and services. economic system.
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Mar 21, 2016 · mixed economy: [noun] an economy in which some companies are owned by the government and other companies are not.
- Overview
- Historical motives
- Components
- Philosophical and social perspectives
Written byGreg Young
Greg Young
Associate Professor of Strategy and Ethics Management, Poole College of Management, North Carolina State University. His contributions to SAGE Publications’ Encyclopedia of Business Ethics and Society (2008) formed the basis of his contributions to Britannica.
Fact-checked byThe Editors of Encyclopaedia Britannica
The Editors of Encyclopaedia Britannica
Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.
In addition to taking a variety of forms, mixed economies have come about from a variety of motives and historical causes. The British Corn Laws of the early 1800s, for example, were government interventions in the free market to protect native agricultural interests by limiting imports. The laws encouraged foreign protectionist responses and resulted in higher food and labour costs at home, which in turn led to an invigorated laissez-faire and free trade movement. However, at roughly the same time, abuses of factory workers led to government intervention to reform labour conditions for women and children.
In developed Western economies between the late 1800s and early 1900s, most political economists and governments believed that social prosperity progressed best in economic systems composed of free markets, in which social and monetary order was protected by the actions of governmental and banking institutions. This belief was profoundly shaken, however, by the system’s twin catastrophic failures that came to be known as the Great Depression (1929–39)—failing first to prevent the global economic collapse and then failing to recover communities from the horrendous human tragedies of unemployment and poverty wrought by the collapse. Between 1933 and 1939 the New Deal, a series of interventionist legislation and government programs in the United States, was championed by Pres. Franklin D. Roosevelt to head off social unrest caused by widespread unemployment during the Great Depression. In the mid-20th century many people agreed that the Great Depression arose from fundamental flaws in the free market theory of equilibrating supply and demand and that this meant that the free market alone would be incapable of recovering from another global economic downturn.
In developed Western economies, the historical development of the mixed economy is the evolutionary change of the free market concept as it adapted to avoid the risks of widespread social unrest and potential revolutionary socialist or Marxist change. Social democratic programs that arose in continental Europe in the 20th century created coalitions of business interests with major social groups to improve social welfare without jettisoning private property and the market economy. This mixed economic approach included economic planning, high tariffs, guarantees of group rights, and social welfare programs.
Mixed economies also arose in many countries that formerly had centrally planned and socialist economies. The mixed economies in modern China and Russia, for example, evolved from communist systems that were too inefficient to compete in the modern global economy. The social experience of the Chinese and Russian people during that process was a profound testament to the personal difficulties and turmoil that people endure when a country makes a transition to a mixed economy.
As the historical examples suggest, mixed economies have public, private, legislative, judicial, and regulatory components. There is not a single ideal, standard, or typical set of economic features, and the mix may vary from country to country. Components in the mix may include government subsidies, fees, taxes, set-aside programs and regulations,...
Many economists and political philosophers have argued in favour of government action to enforce the ordinary rules of law in economic matters. For example, Scottish social philosopher and political economist Adam Smith, and later Austrian-born British economist Friedrich A. Hayek, noted the important role of government in assisting the functioning of markets by preventing violence and fraud, protecting property and public safety, enforcing contracts, and providing public infrastructure and utilities that would otherwise be unprofitable. In a mixed economy, however, there is a presumption that government must go beyond this limited role to improve distributive justice in society. Smith wrote that such intervention violated the ethical principle that indicates that economic efficiency is the best long-term path to social progress. Hayek also objected to such government intervention because he believed it to be economically inefficient, though even more important in his view was the inevitable tendency for the mixed economy to be politically abusive of individual liberty.
Despite those philosophical and moral objections, almost all modern economic systems in the world today are mixed economies. While the globalization of the world economy limits government intervention in free trade, governments still retain mechanisms for social welfare exceptions to the free market rule. At times, politicians have attempted to invoke such exceptions for reasons of parochial interest or political expediency.
May 2, 2024 · mixed economy: 1 n an economic system that combines private and state enterprises Type of: economic system , economy the system of production and distribution and consumption
A mixed economy is an economic system that accepts both private businesses and nationalized government services, like public utilities, safety, military, welfare, and education. A mixed economy also promotes some form of regulation to protect the public, the environment, or the interests of the state. This is in contrast to a laissez faire ...
