What are the advantages of a mixed economy?

1. Advantage: More freedom because the government doesn't control as much as in communism
2. Advantage: A mixed economy incorporates both socialism and capitalism, the best of both

1.Mixed economy leads to exploitation of resources by the individual merchants who are profit motive.
2. There is a lot of freedom that leads to mishandling of resources compared to command economy where government give protection. Guest

In a Mixed economy, because there is some government involvement, the public and private sectors are forced to cooperate. This is not always a good thing, but it can be a good balance, the best of both worlds. Mixed economies are not as efficient at addressing the needs of consumers when compared to Market economies, and so a lot of potential revenue is lost. Private companies can thrive, though high regulation fees and taxes raise prices and curb consumer spending. Also, government subsidies are inherently anti-competitive, because companies gain what they didn't earn and this can also affect companies that are doing well, because they are paying for the subsidies in an indirect way, and reintroducing competitors that ought to have been eliminated through competition. Since many Mixed economy governments are pro-Unions and indifferent towards monopolies, situations can arise where one or a few businesses control an entire product. As a rule, the less companies there are that are fighting for control, the less competition there is, and therefore there will be less need to improve on products or reduce their price, and so there is less innovation.

Mixed economies do have benefits. They are much more stable when compared to Free Market systems, and government regulations can prevent inflation and exorbitant investment, thus inhibiting the inevitable cycles of recession and prosperity. The only reason why Mixed economies are affected by the current recession is the fact that the U.S., a very right-leaning Mixed economy, has succumbed to sub-prime mortgages, resulting in foreclosures, bailouts, and bankruptcy. Another major benefit is a social safety net. For example, Free Health care, education and transportation are all things that people take for granted that are provided to us, free of charge (except in taxes, of course). Finally, Mixed economies also waste less resources in general and are more environmentally conscientious. Private companies don't really care if they are harming the environment, as long as they are making money. (Of course, if being more environmentally conscious attracts more consumers, that's what they will do). In a Mixed economy, this is where government regulations come into the picture. The government might decide to reduce their environmental footprint, or might be pressured into such policies by lobby groups or environmental activists/organizations. People have more influence on government policies, which results in changes government regulation which affects what products are produced, how they are produced, and how they can be disposed of. Clonez