Mixed Economic System
A mixed economy is one that incorporates two or sometimes more of the three economic systems. Normally, a mixed economy consists of the free market and command systems because the traditional economy is so rare that it is seldom included in a mixed economy. What should be produced, how it should be produced and for whom it should be produced are all determined by how it is in a free market economy, just with different levels of government interference.
No country around the globe has adopted a fully free market economy or fully command economy because of one crucial factor in the functioning of a country, the government. Every country around the globe has a central power that is the centre of everyday functioning. On most occasions, this is a form of government. A free market economy is determined by the choices of the producers and consumers and is driven by the input of private enterprise. A command economy is based upon the dictation of the government and how this effects the economy when it comes to the choices of the people. Generally, people have little freedom in these societies and all profit is represented by the government, not private enterprise. The level of government interference and consumer sovereignty in the economy is what defines a mixed system. Every society in the world chooses to follow the mixed system because the government desires to input into the economy on a range of extremity. A country that chooses to follow a more free market system has little government interference whereas countries that choose to follow a more command system will have more government interference into the economy. For example, the Australian economy is about halfway between adopting a fully free market and fully command economy. This is because there is substantially more government intervention than countries such as the United States, India, Hong Kong and Japan, who choose to adopt a more free market system. The Australian government wishes to have the best of both systems, allowing private enterprise to take most control of the economy, but taxing private enterprise and the people whatever levy they wish within reason. This is not the case with countries like North Korea. Being one of the heaviest command economies on the earth, they choose to take on the sole operation of the economy and its positive and negative stages. In this situation, the government chooses for the people to have little freedom and their purpose is to work for the economy, be treated like everyone else and have little freedom and sovereignty. Cuba, Vietnam and Laos are also great examples of a command economy. It is evident that there is a complete difference between a free market and command economy and this effects a society in many different ways. If the central power, or government, interfere with the level of consumer freedom, but not fully dictate a countries economy, they will fall into a position of a mixed economy. The key focus to realise with a mixed economy is the government, and how it chooses to interfere in the economy of today.
No country around the globe has adopted a fully free market economy or fully command economy because of one crucial factor in the functioning of a country, the government. Every country around the globe has a central power that is the centre of everyday functioning. On most occasions, this is a form of government. A free market economy is determined by the choices of the producers and consumers and is driven by the input of private enterprise. A command economy is based upon the dictation of the government and how this effects the economy when it comes to the choices of the people. Generally, people have little freedom in these societies and all profit is represented by the government, not private enterprise. The level of government interference and consumer sovereignty in the economy is what defines a mixed system. Every society in the world chooses to follow the mixed system because the government desires to input into the economy on a range of extremity. A country that chooses to follow a more free market system has little government interference whereas countries that choose to follow a more command system will have more government interference into the economy. For example, the Australian economy is about halfway between adopting a fully free market and fully command economy. This is because there is substantially more government intervention than countries such as the United States, India, Hong Kong and Japan, who choose to adopt a more free market system. The Australian government wishes to have the best of both systems, allowing private enterprise to take most control of the economy, but taxing private enterprise and the people whatever levy they wish within reason. This is not the case with countries like North Korea. Being one of the heaviest command economies on the earth, they choose to take on the sole operation of the economy and its positive and negative stages. In this situation, the government chooses for the people to have little freedom and their purpose is to work for the economy, be treated like everyone else and have little freedom and sovereignty. Cuba, Vietnam and Laos are also great examples of a command economy. It is evident that there is a complete difference between a free market and command economy and this effects a society in many different ways. If the central power, or government, interfere with the level of consumer freedom, but not fully dictate a countries economy, they will fall into a position of a mixed economy. The key focus to realise with a mixed economy is the government, and how it chooses to interfere in the economy of today.