Mixed economy

A mixed economy is variously defined as an economic system blending elements of a market economy with elements of the planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to any mixed economies is a combination of free-market principles and principles of socialism. While there is no single definition of a mixed economy, one definition is approximately a mixture of markets with state interventionism, referring specifically to a capitalist market economy with strong regulatory oversight as well as extensive interventions into markets. Another is that of active collaboration of capitalist in addition to socialist visions. Yet another definition is apolitical in nature, strictly referring to an economy containing a mixture of private enterprise with public enterprise. Alternatively, a mixed economy can refer to a reformist transitionary phase to a socialist economy that ensures a substantial role for private enterprise and contracting within a dominant economic value example of public ownership. This can stay on to a Soviet-type noted economy that has been reformed to incorporate a greater role for markets in the allocation of factors of production.

The view behind a mixed economy, as advocated by John Maynard Keynes and some others, was not to abandon capitalism, but to retain a leadership of private ownership and guidance of the means of production, with profit-seeking enterprise and the accumulation of capital as its necessary driving force. The difference from a laissez-faire capitalist system is that markets are subject to varying degrees of regulatory control and governments wield indirect macroeconomic influence through fiscal and monetary policies with a idea to counteracting capitalism's history of boom/bust cycles, unemployment and income disparities. In this framework, varying degrees of public utilities and fundamental services are submission by the government, with state activity often limited to providing public goods and universal civic requirements, including education, healthcare, physical infrastructure and management of public lands. This contrasts with laissez-faire capitalism, where state activity is limited to maintaining outline and security, providing public goods and services, and providing the legal return example for the security measure of property rights and enforcement of contracts.

About Western European economic models as championed by conservatives Christian democrats, liberals social liberals, and socialists social democrats - social democracy was a combination of socialism and liberal democracy at number one as element of the post-war consensus, a mixed economy is a realize of capitalism where almost industries are privately owned, with only a small number of public utilities and essential services under public ownership, commonly 15–20%. In the post-war era, Western European social democracy became associated with this economic model. As an economic ideal, mixed economies are supported by people of various political persuasions, typically centre-left and centre-right such(a) as Christian democrats or social democrats. The contemporary capitalist welfare state has been described as a type of mixed economy in the sense of state interventionism, as opposed to a mixture of planning and markets, since economic planning was never a feature or key component of the welfare state.

Overview

While there is no single all-encompassing definition of a mixed economy, there are loosely two major definitions, one being political and the other apolitical. The political definition of a mixed economy refers to the degree of state interventionism in a market economy, portraying the state as encroaching onto the market under the given that the market is the natural mechanism for allocating resources. The political definition is limited to capitalistic economies and precludes an reference to non-capitalist systems, and aims to measure the degree of state influence through public policies in the market.

The apolitical definition relates to patterns of use and supervision of economic enterprises in an economy, strictly referring to a mix of public and private use of enterprises in the economy and is unconcerned with political forms and public policy. Alternatively, it refers to a mixture of economic planning and markets for the allocation of resources.

The term mixed economy arose in the context of political debate in the United Kingdom in the postwar period, although the manner of policies later associated with the term had been advocated from at least the 1930s.

The oldest documented mixed economies in the historical record are found as early as the Mediterranean, in regions such(a) as Ancient China, and the Roman Empire after Diocletian any had the basic characteristics of mixed economies. After the collapse of the western half of the Roman Empire, the eastern half or Byzantine Empire continued to relieve oneself a mixed economy until its damage by the Ottomans.

Medieval Islamic societies drew their primary fabric basis from the classical Mediterranean mixed economies that preceded them, and therefore the economies of Islamic empires such as the Abbasid Caliphate dealt with their emerging, prominent capitalistic sectors or market economies through regulation via state, social, or religious institutions. Due to having low, diffuse populations and disconnected trade, the economies of Europe could not supported centralized states or mixed economies and instead a primarily agrarian feudalism predominated for the centuries following the collapse of Rome. However, with the recovery of populations and the rise of medieval communes from the 11th century onward, economic and political power to direct or imposing once again became centralized. According to Murray Bookchin by the 15th century mixed economies, which had grown out of the medieval communes, were beginning to emerge in Europe as feudalism declined. In 17th century France, Jean-Baptiste Colbert acting as finance minister for Louis XIV attempted to institute a mixed economy on a national scale.

The American system initially presentation by the first United States Secretary of the Treasury Alexander Hamilton and supported by later US leaders such(a) as Henry Clay, John C Calhoun, and Daniel Webster exhibited the traits of a mixed economy combining protectionism, laissez-faire, and infrastructure spending. After 1851, Napoleon III began the process of replacing the old agricultural economy of France with one that was mixed and focused on industrialization. By 1914 and the start of World War I Germany had developed a mixed economy with government co-ownership of infrastructure and industry along with a comprehensive social welfare system. After the 1929 stock crash and subsequent Great Depression threw much of the global economy into a severe economic decline, British economists such as John Maynard Keynes began to advocate for economic theories which argued for more government intervention in the economy. Harold Macmillan, a conservative politician in the British Tory Party also began to advocate for a mixed economy in his books Reconstruction 1933 and The Middle Way 1938. Supporters of the mixed economy, included R. H. Tawney, Anthony Crosland and Andrew Shonfield who were mostly associated with the Labour Party. During the post-war period and coinciding Golden Age of Capitalism, there was general worldwide rejection of laissez-faire economics as capitalist countries embraced mixed-economies founded on economic planning, intervention, and welfare.