Question

Explain the working of mixed economy and its main features.

Answer 1

• It is a golden mixture of capitalism and socialism. Under this system there is freedom of economic activities and government interferences for the social welfare. Hence it is a blend of both the economies. The concept of mixed economy is of recent origin.
  
• The developing countries like India have adopted mixed economy to accelerate the pace of economic development. Even the developed countries like UK, USA, etc. have also adopted ‘Mixed Capitalist System’. According to Prof. Samuelson, “Mixed economy is that economy in which both public and private sectors cooperate.” According to Murad, “Mixed economy is that economy in which both government and private individuals exercise economic control.”
  
• Mixed economy has following main features:
  

(i) Co-existence of private and public sector

(ii) Personal freedom

(iii) Private property is allowed

(iv) Economic planning

(v) Price mechanism and controlled price

(vi) Profit motive and social welfare

(vii) Check on economic inequalities

(viii) Control of monopoly power