Definition of Mixed Economy
Mixed Economy is an economic system which combines in itself the features of capitalism and that of the Socialism.
Meaning of Mixed Economy
Unlike a pure capitalistic economy, Mixed Economy has an important public sector, i.e. a number of industries which are owned and managed by the state. The State is not the all pervasive owner of all means of production. Private enterprise is allowed and even encouraged to operate a large number of industries and to own the various means of production. Thus in this economic system the public and private sectors exist side by side. It supports reduction in the inequality of incomes and seeks to achieve it through the fiscal machinery. It acts as a welfare state and undertakes a large number of functions and promotes the welfare of the common man.
In Pakistan we have mixed economy. The public utility concerns like Post and Telegraph, Electricity etc. are managed by State. There is also semi-public sector which includes all the concerns, which are jointly owned and managed by the private individuals and the State. Industrial, trading and commercial enterprises are also owned and managed by the individuals and they collectively constitute the private sector. Also Read: 4 Types of Economc System Research Methodology
Advantages and Disadvantages of Mixed Economy
Merits & Advantages of Mixed Economy
Following are the merits and advantages mixed economy
- Interest of the people is well served
- Adequate incentive to work hard
- Resources may be properly utilized
- Rapid development is possible
Demerits & Disadvantages of Mixed Economy
Following are the demerits and disadvantages of mixed economy
- Concentration of wealth in few hands
- Existence of anti social activities
- Wastage of resources
- Interest of Common man suffers