Benefits of Mixed Economies
Mixed economies are essentially economies that include a mixture of public and private control, reflecting features of both socialism and capitalism. These types of economies are described like market economies that have strong supervisory oversight. Further below are some key benefits of mixed economies.
1. Allow intervention
Mixed economies are based on a simple notion that the government can enhance economic results through fiscal policy action. The mixed system thus gives the government flexibility for intervening in the economy during periods of emergency. A good example of such a scenario was during the 2008 worldwide financial crisis that threatened to foster a worldwide depression. Most governments, including the U.S government, moved to steady their fiscal systems.
2. Security benefits
The other mixed economy benefit is that it provides security to both buyers and sellers. This security comes about because of the presences of the government in the nation’s economy. The government allows better competition amongst the service providers by providing regulations for protecting the whole society. This government-provided security aids in the maintenance of a strong and stable economy.
3. Social benefits
Mixed economies offer wide ranging social benefits to the citizens. The benefits included here are not restricted to unemployment insurance, healthcare system and minimum wage regulations. These benefits exist to offer a small subsistence level for citizens. Under the pure market systems, these social benefits would be left to charities and other private institutions.
4. Limited government control
In mixed economies, the government only has a limited control in the economy. This is not only beneficial for structure but it encourages the establishment of more businesses as people have the ability of making their own choices.
The drawback of mixed economies is that unsuccessful regulations could possibly paralyze aspects of production, which can cause the economic stability to tilt.