The Economy is the most important part of our lives as it maintains our consumption needs and our expenditures. It is a large cycle of correlated mass production and utilization of economic activities that helps us to know about the resource allocations. This utilization of goods and services satisfies the needs of people maintaining it.
Mixed Economy and Market Socialism come under the structure of the economic model. Both of them have very subtle differences and are used to combine the constituents of the industrial and the socialist viewpoint. For knowing the differences between these two economic models, we need to know their basic characteristics.
Mixed Economy vs Market Socialism
The main difference between Mixed Economy and Market Socialism is that Mixed Economy changes in the market prices depending on the market’s ups and downs but, the government can also interrupt the changes. Whereas, in Market Socialism, the market changes are decided by the government.
A Mixed Economy is a combined form of market economy systems including planned Economy, private enterprises, and public enterprises, etc. In a Mixed Economy, private properties and data are fully protected and, government interference is also present in this type of economic system.
In Market Socialism, the government is the main regulating body, and it maintains the equality between the prices to achieve equal opportunities in the market. The state government owns all the rights regarding firms or companies in Market Socialism but offers some freedom rights.
Comparison Table Between Mixed Economy and Market Socialism
| Parameters of Comparison | Mixed Economy | Market Socialism |
| Definition | A Mixed Economy is a system consisting of a combined form of the market system and economic planning that are maintained by the firms and the government. | Market Socialism is an economic system where the ways of making money are controlled by the government as a whole. |
| Ownership | In a Mixed Economy, ownership is managed by both the government and the firms. | Market Socialism firms are fully owned by the government and market equilibrium is maintained. |
| Dominance | In Mixed Economy Both private and public sectors are interrelated and no one is dominant. | Market Socialism is heavily dominated by the public sectors. |
| Aim | In Mixed Economy the main aim is to provide benefit to both public and private sectors. | Market Socialism mainly aims for public welfare. |
| Equality of income | In a Mixed Economy, equality does not remain the same, and income distribution is less unequal. | Market Socialism economic system maintains the market equality and income distribution are equal. |
What is Mixed Economy?
A Mixed Economy system consists of a set of elements like market system, exchanging of goods, manufacturing, and selling, etc. This system mixes up the private elements with the social or public elements with equally distributive income or account values which decreases the issue of inequality.
Many nations have adopted this type of economic system as this system maintains a healthy relationship between the public and the government. In this system, big private companies and enterprises keep the exchange of goods with small companies and government-owned companies.
In a Mixed Economic system, there is a free market rule which means that the prices and the planning are decided by both the companies and the government.
What is Market Socialism?
Market Socialism involves the framework of the market economic system. Countries like Japan, America, and England follow a Market Socialism system in their economic system structure. This system is a partially self-regulating system, and another half regulation is maintained by the government.
This system act as a role model when it comes to equality maintenance between private and public sectors. Both buyer’s and sellers’ perspective is respected in this system. Even though the regulations are handled by the government, the main changes in the system are forced by market changes.
This system is considered to be good from the perspective of economists as it combines market concepts and economic socialism for the benefit of the whole society.
Main Differences Between Mixed Economy and Market Socialism
- A Mixed Economy is defined as an economic system that consists of a combined form of either market and economic planning that are regulated by the firms and the government. On the other hand, Market Socialism is an economic system where the ways of making money are controlled by the government as a whole.
- Market Socialism’s economic system preserves market equality and income distribution are equal. Whereas in a Mixed Economy, equality does not remain the same, and income distribution is less unequal.
- Market Socialism firms or companies are fully owned by the government, and market equilibrium is maintained. While in a Mixed Economy, ownership is managed by both the government and the firms.
- In Mixed Economy Both private sector units and public sector units are related to each other, and no one is dominant. Whereas Market Socialism is heavily dominated by the public sectors.
- In Mixed Economy, the distribution of income and sources are unequal. Whereas income and sources are equally distributed in Market Socialism.
Conclusion
Economic stability in a country shows the development and economic growth of the country. This stability is mainly managed by the central and state governments. The main aim of this economic system is to maintain equality and income distribution among the companies or firms and the people of the country.
There are several types of economic systems. Some are used for private benefits, and some are used for public benefits, whereas some are for both public and private benefits. The systems which are beneficial for both public and private maintains equality in society. Also, the systems which are controlled by the government are fully dominated by the public sectors and beneficial for them but less beneficial for the privately-owned companies or firms.
References
- http://kadamaee.ir/payesh/books-tank/05/Littlechild%20-%20The%20Fallacy%20of%20the%20Mixed%20Economy%20(1986).pdf
- https://www.aeaweb.org/articles?id=10.1257/jep.8.2.165