Do You Agree With The Contention That The Mixed Ec

Essay by EssaySwap ContributorUniversity, Bachelor's February 2008

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Yes, I agree with the contention that the mixed economy is the best among all the economy systems. The mixed economy has been defined as an economic system that answers the What, How, and For Whom questions through a mixture of traditional, command, and market systems. Not a single nation in this world practices a pure traditional, command, or market economy. They may concentrate on one of the economic policies but they can't avoid from adding some other systems to it. For instance, in the United States of America, they practice the market economy as their main system. But their market economy system is also combined with the other two systems that are the traditional and command economy system. A more appropriate description is that most countries employ a blend of the basic types of economic systems, widely called a mixed economy system.

Mixed economy system combines the strengths of capitalism and the command economies.

The capitalism is an economic system characterized by private ownership of resources and markets. It is also known as the 'free enterprise system'. Capitalism is determined by two characteristics that are private ownership of resources and decentralized decision-making. Among the key strength of the capitalism economy system is its capacity in achieving economic efficiency. This is because the competition and the profit motives force production at a minimized cost. The other strength of capitalism is the economic freedom because the economic power is broadly scattered. This means that the individual consumers, producers and workers are free to make their own decisions based on their own self-interest.

Meanwhile, the command economy is defined as a system that answers the What, How, and For Whom questions by the central authority. Command economy system is determined by two characteristics that are public ownership and centralized decision-making. Among...