Characteristics Of The Mixed Economy System: Here's An Explanation, Lacks And Excess

YOGYAKARTA - Have you heard the term mixed economic system characteristics? The reason is, the mixed economic system is a combination of the role of citizens and the government.

The mixed economic system is a combination of capital and socialist. So, this economic system has a fair percentage between the roles of citizens and the government.

As we all know, the capitalized economic system has fully surrendered its control to the private sector. Meanwhile, the socialist economic system makes the government a country as the center of economic control.

To that end, a mixed economic system appears as an alternative between the two. More fully, let's follow the following explanation of what a mixed economic system is!

Understanding Mixed Economic Systems

There are various systems implemented by countries to control economic activity, one of which is the mixed economic system.

The mixed economic system is a procedure in which the government and the private zone cooperate in controlling and implementing economic activities of a country.

In this system, the government has a position as a policy maker, which can intervene in the economic activities of citizens or business actors.

In addition, mixed economic systems are often mistaken for a very flexible approach, as mixing the advantages of the liberal economic system and the command economy system.

In the liberal economic system, individual freedom and free market mechanisms are the main focus. On the contrary, in the command economy system, the government has full control over economic activity.

In the mixed economic system, these two aspects are combined to achieve a balance between individual freedom and government intervention.

There are also some countries that have practiced a mixed economic system, namely Australia, the United States, Canada, Germany, and the United Kingdom.

There are also characteristics of the mixed economic system, namely the following:

1. People Are Given Freedom

In this system, the private zone is given the freedom to carry out their economic activities, be it production, investment, or innovation.

However, this freedom is always governed by policies that have been set by the government.

2. The government as the policy maker

One of the characteristics of the mixed economic system is that the government has a position as a policy maker. Where the policy is made so that it can intervene in economic activity by producing regulations, as well as relevant regulations.

There is also the purpose of this government intervention, namely to protect the interests of the community, avoid monopolistic practices, and ensure justice in commerce.

3. Adanya Persaingan Pasar yang Cenderung Lebih Sehat

In the mixed economic system, market competition tends to be healthier because there are clear provisions to avoid practices that harm consumers or competitors. That is, the government plays an active role in supervising and controlling competition so that it takes place fairly.

4. Government Policy Determines Market Mechanism

Policies unveiled by the government in mixed economic systems can affect market mechanisms, such as amounts or types of production.

The government can use fiscal policies and monetary policies to control the economy and achieve the desired goals.

5. The government can form a business

In the mixed economic system, the government has the expertise to form state-owned enterprises, or invest in strategic sectors that are considered vital for national interests.

This will then give the government greater control over these sectors.

6. Fair Percentage Between Governments And The Community

In the combination economic system, the rations between the government and citizens are fairly measured. More precisely, there is no excessive dominance from the government or the private zone.

The government functions in controlling and protecting the interests of the community, while the private zone has room to innovate and contribute to economic activities.

Mixed Economic System Shortage

On the other hand, there are also some shortcomings of the mixed economic system, including:

There is a possibility of corruption, because the government has the power and authority to intervene in economic activities.

Restrictions on private freedom affect potential benefits for business actors and limit innovation.

Excess Mixed Economic System

There are several advantages of the mixed economic system, namely as follows:

The mixed economic system is a flexible approach.

Encouraging the creation of technological innovation, product quality improvement, and sustainable economic development.

The government can protect the interests of the community, avoid monopolies, and regulate the distribution of wealth more fairly.

In addition, it is better to read: Applied Economic Sciences' which you can use as additional insight in terms of economy.

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