A mixed economy is variously defined as an economic system that combines elements of a market economy with elements of a planned economy, free markets with state interventionism, or private enterprises with public enterprises. Although there is no uniform definition of a mixed economy, one definition is a mix of markets with state interventionism, specifically referring to a capitalist market economy with strong regulatory oversight and extensive intervention in markets. Another is the active collaboration of capitalist and socialist visions. Yet another definition is apolitical in nature, strictly referring to an economy that contains a mix of private enterprise and public enterprise. Alternatively, a mixed economy can refer to a reformist transition to a socialist economy, allowing for an essential role for private enterprise and contracting within a dominant economic framework of public ownership. This may extend to a Soviet-type planned economy that has been reformed to give markets a greater role in the allocation of factors of production.
Western mixed economies are described as capitalist economies characterized by the predominance of private ownership of the means of production, with for-profit enterprises and the accumulation of capital being the fundamental driving forces. The difference with a lassiez-faire capitalist system is that markets are subject to varying degrees of regulatory control, and governments exert indirect macroeconomic influence through fiscal and monetary policies to counter capitalism’s history of boom/bust cycles, unemployment and income inequality. Within this framework, public utilities and basic services are provided to varying degrees by the government, with government activities often limited to the provision of public goods and universal civic needs, including education, health care, physical infrastructure, and management of public land. This is in contrast to laissez-faire capitalism, where state activities are limited to maintaining order and security, providing public goods and services, and providing the legal framework for protecting property rights and enforcing contracts.
Regarding the Western European economic models as advocated by conservatives (Christian Democrats), liberals (social liberals) and socialists (social democrats) as part of the post-war consensus, a mixed economy is a form of capitalism where most industries are privately owned, with only a small number of public utilities and essential services in public ownership, usually 15–20%. In the post-war period, Western European social democracy was associated with this economic model. As an economic ideal, mixed economies are supported by people of different political persuasions, typically centre-left and centre-right, such as Christian Democrats or social democrats. The contemporary capitalist welfare state has been described as a kind of mixed economy in the sense of state interventionism, as opposed to a mixture of planning and markets, since economic planning has never been a feature or a key element of the welfare state. Content1 Overview1.1 History2 Political philosophy2.1 Catholic social teaching2.2 Fascism2.3 Social democracy2.4 Socialism3 Typology3.1 Mix of free markets and government intervention3.2 Mix of private and public companies3.3 Mix of markets and economic planning4 Criticism5 See also6 Sources and references7 Further reading8 External linksOverview
While there is no single all-encompassing definition of a mixed economy, there are generally two main definitions, one political and the other apolitical. The political definition of a mixed economy refers to the degree of state interventionism in a market economy, which presents the state as intervening in the market, assuming that the market is the natural mechanism of resource allocation. The political definition is limited to capitalist economies and excludes extension to non-capitalist systems and aims to measure the degree of state influence through public policy in the market.
The non-political definition refers to ownership and management patterns of business enterprises in an economy, strictly refers to a mixture of public and private ownership of enterprises in the economy, and does not care about political forms and public policy. Alternatively, it refers to a mixture of economic planning and markets for the allocation of resources.History
The concept of mixed economy emerged in the context of post-war political debate in the United Kingdom, although the policies later associated with the term had been advocated since at least the 1930s.
The oldest documented mixed economies in the historical record were found as early as the 4th millennium BC Chr.In the ancient Mesopotamian civilization in city-states such as Uruk and Ebla. The economies of the ancient Greek city-states are also best characterized as mixed economies. It is also possible that the Phoenician city-states depended on mixed economies to manage trade. Before the conquest by the Roman Republic, the Etruscan civilization had a “strong mixed economy”. In general, the cities of the ancient Mediterranean practiced in regions such as North Africa, Iberia, southern France, etc. all a form of mixed economy. According to historians Michael Rostovtzeff and Pierre Lévêque, the economies of ancient Egypt, pre-Columbian Mesoamerica, ancient Peru, ancient China, and the Roman Empire, according to Diocletian, all had the basic characteristics of a mixed economy. After the collapse of the western half of the Roman Empire, the eastern half, or Byzantine Empire, continued to have a mixed economy until its destruction by the Ottomans.
Medieval Islamic societies drew their primary material 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 capitalist sectors or market economies through regulation by state, social, or religious institutions. Due to the small, diffuse population and disjointed trade, the economies of Europe could not support centralized states or mixed economies, and instead a predominantly agrarian feudalism prevailed in the centuries following the collapse of Rome. However, with the recovery of the population and the rise of medieval communities from the 11th century onwards, economic and political power was centralized again. According to Murray Bookchin, mixed economies that had emerged from medieval communities began to emerge in Europe in the 15th century as feudalism declined. In 17th-century France, Jean-Baptiste Colbert, who served as Louis XIV’s finance minister, tried to establish a mixed economy on a national level.