Advantages Of Mixed Economy

Every country have use different economic system. Most of the countries are using mixed economy system. Based on Hughes, Kapoor, and Pride (2012), mixed economy is “an economy that exhibits elements of both capitalism and socialism” (p. 15) while capitalism is define as “economic system in which individuals own and operate the majority of businesses that provide goods and services” (p 13). Mixed economies are conducted by the interaction between households, resources market, product market, businesses and government. Whereas, capitalism is using the concept of “invisible hand” by Adam Smith that explained about the way of a human being’s private achieve has given advantage to other people and country’s economy. In other words, when someone wants to improve their life, their hard work or effort unintentionally will affect their surroundings. Smith also used term laissez-faire that means let people do what they want and based on concept of free-market economy to describe the capitalism. The

The administration will make sure that the distribution of wealth and income are equal in society. The government put the taxes on the rich people but not to the poor people. The money from the taxes will be redistributing in varieties of form to help the poor people. Some businesses are owned by government, so the profit that government gets will be given fairly to society. Moreover, the community also will have their own right to own their property and this make their level of living increase. Besides, government can provide the job to society and maintain the full employment rate in turn high level of economic growth can be achieved. In the other hand, in capitalist system, the jobs were not provided by government because it’s depending on certain individuals to hire people. So, unemployment rate in capitalist system can be very high compared to mixed economies