Mixed Economies

LETS REVIEW DIFFERENT ECONOMIES Market or Capitalism- private ownership of items and freedom to use the items as we see fit Socialism- people own some resources and government owns the rest. How much the government owns varies from country to country Traditional- decisions are made according to traditions, progress is difficult. Command- government makes all the decisions on what to produce and how much to produce.

Why Mixed Economies Exist Remember there are three main economies Traditional Command Market The definition for these economies are clear cut. Most economies do not fit the entire definition Most economies will detour away from the original idea of a traditional, command, or market economy

Why Mixed Economies Exist Continued When there is a historical event or a decline in the economy These are reasons why a government might alter their economy to fit the needs of the people In conclusion: there is no such thing as a PURE market economy, traditional economy, or command economy. ALL governments alter one of these economies to meet the needs of their people

An Example of Why a country might alter the original economies America was a powerful market economy based off of a free market UNTIL the Great Depression occurred in the 1930’s. Conditions got so bad in America that the government had to create programs that went against a free market in order to help the people Unemployment Social Security Therefore, we are no longer a pure Market Economy, we are now a mixed economy

SO What is a Mixed Economy? Mixed economies are economies that have characteristics of one of the three main economies BUT have changed slightly to meet the needs of their people

Shared Characteristics of Mixed Economies Mixed economies can so many different characteristics it is hard to describe them BUT here are some combinations

Examples Communist Economies Communism was thought of by Karl Marx He said all of history has been a struggle between the workers and the owners. He felt the working class would rise up and overthrow the owners

Examples of Mixed Economies So he came up with the idea of Communism= Everyone would contribute according to his or her abilities Everyone would only consume what they NEEDED

Examples of Mixed Economies Marx felt that NO government would be needed BUT in order to eliminate government you would need a STRONG leader for awhile. This leader would serve the needs of the people until they were ok to run the country alone. This is where ALL communist countries STOP. They never get past the STRONG government The strong government usually creates socialism and hopes to one day step down but never does.

Think of it like teaching someone to ride a bike

Examples of Mixed Economies It is this reason that there is not a TRUE Communist government in the world now, nor has their ever been. They are mixed Communist and Socialist

Socialism Government controls and owns some things but not all. Government provides basic needs of the people like education, jobs, transportation, health care. Cuba and North Korea Socialism can be the government controlling A LOT or A LITTLE And providing A LOT or A LITTLE

Examples of Mixed Economies There are many mixed market economies especially in Democratic countries. These are countries in which the people can influence the economy a great deal. Sometimes the government in market economies will control one aspect of the economy (like revenue from oil) and use the money to provide education, welfare, etc. to its people. THUS making it a mixed market economy Mixed market economies are usually market economies with some elements of socialism In these economies the more things the government provides the more taxes (revenue) it needs from the people. USA is a mixed market economy

Advantages of Mixed Economies China adopted a mixed economy of command (socialism) an capitalism causing extreme economic growth Market economies of Europe have adopted socialist programs to provide generously for its people: education, etc.

Disadvantages of Mixed Economies Mixed economies with a strong component of socialism (excluding command economies) need to find a way to fund these socialist programs usually through high taxes as a result European countries have higher taxes than America but provide more for its people