Mixed economy

A mixed economy is variously defined as an economic system blending elements of a market

economy with elements of a planned economy, markets with state interventionism, or private
enterprise with public enterprise.[1][2][3][4] Common to all mixed economies is a combination of
free-market principles and principles of socialism.[5] While there is no single definition of a mixed
economy, one definition is about a mixture of markets with state interventionism, referring
specifically to a capitalist market economy with strong regulatory oversight and extensive
interventions into markets. Another is that of active collaboration of capitalist and socialist
visions.[6] Yet another definition is apolitical in nature, strictly referring to an economy containing
a mixture of private enterprise with public enterprise.[7] Alternatively, a mixed economy can refer
to a reformist transitionary phase to a socialist economy that allows a substantial role for
private enterprise and contracting within a dominant economic framework of public ownership.
This can extend to a Soviet-type planned economy that has been reformed to incorporate a
greater role for markets in the allocation of factors of production.[5]

The idea behind a mixed economy, as advocated by John Maynard Keynes and some others,
was not to abandon capitalism, but to retain a predominance of private ownership and control of
the means of production, with profit-seeking enterprise and the accumulation of capital as its
fundamental driving force.[8] 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 view to counteracting
capitalism's history of boom/bust cycles, unemployment and income disparities. In this
framework, varying degrees of public utilities and essential services are provided 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.[8][9] This contrasts with laissez-faire capitalism, where state activity is limited to
maintaining order and security, providing public goods and services, and providing the legal
framework for the protection of property rights and enforcement of contracts.[10][11]

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 first[12]) as part of the post-war
consensus,[13] 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 under public
ownership,[14] usually 15–20%.[15] In the post-war era, Western European social democracy
became associated with this economic model.[16] As an economic ideal, mixed economies are
supported by people of various political persuasions, typically centre-left and centre-right such
as Christian democrats or social democrats.[17] 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.[18]

Overview

While there is no single all-encompassing definition of a mixed economy, there are generally 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 assumption that the market is the natural mechanism
for allocating resources. The political definition is limited to capitalistic economies and
precludes an extension to non-capitalist systems, and aims to measure the degree of state
influence through public policies in the market.[19]

The apolitical definition relates to patterns of ownership and management of economic

enterprises in an economy, strictly referring to a mix of public and private ownership 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.[20]

History
The term mixed economy arose in the context of political debate in the United Kingdom in the
postwar period, although the set of policies later associated with the term had been advocated
from at least the 1930s.[21]

The oldest documented mixed economies in the historical record are found as early as the 4th
millennium BC in the Ancient Mesopotamian civilization in city-states such as Uruk and Ebla.[22]
The economies of the Ancient Greek city-states can also best be characterized as mixed
economies.[23] It is also possible that the Phoenician city-states depended on mixed economies
to manage trade.[24] Before being conquered by the Roman Republic, the Etruscan civilization
engaged in a," strong mixed economy".[25] In general the cities of the ancient Mediterranean, in
regions such as North Africa, Iberia, Southern France, etc. all practiced some form of a mixed
economy.[26] According to the historians Michael Rostovtzeff and Pierre Lévêque the economies
of Ancient Egypt, pre-Columbian Mesoamerican, Ancient Peru, Ancient China, and the Roman
Empire after Diocletian all had the basic characteristics of mixed economies.[27] 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.[28]

Medieval Islamic societies drew their primary material basis from the classical Mediterranean
mixed economies that preceded them,[29] 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.[30] 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
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.[31] In 17th century France, Jean-Baptiste Colbert acting as finance
minister for Louis XIV attempted to institute a mixed economy on a national scale.[32]

The American system initially proposed by the first United States Secretary of the Treasury
Alexander Hamilton and supported by later US leaders such as Henry Clay, John C Calhoun, and
Daniel Webster exhibited the traits of a mixed economy combining protectionism, laissez-faire,
and infrastructure spending.[33][34] After 1851, Napoleon III began the process of replacing the
old agricultural economy of France with one that was mixed and focused on industrialization.[35]
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.[36] 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.[37] 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).[37] Supporters of the mixed economy, included R. H. Tawney,[38] Anthony
Crosland[39] 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.[40]

Political philosophy

In the apolitical sense, the term mixed economy is used to describe economic systems that
combine various elements of market economies and planned economies. As most political-
economic ideologies are defined in an idealized sense, what is described rarely—if ever—exists
in practice. Most would not consider it unreasonable to label an economy that, while not being a
perfect representation, very closely resembles an ideal by applying the rubric that denominates
that ideal. When a system in question, however, diverges to a significant extent from an idealized
economic model or ideology, the task of identifying it can become problematic. Hence, the term
mixed economy was coined. As it is unlikely that an economy will contain a perfectly even mix,
mixed economies are usually noted as being skewed towards either private ownership or public
ownership, toward capitalism or socialism, or a market economy or command economy in
varying degrees.[41]

Catholic social teaching

Jesuit author David Hollenbach has argued that Catholic social teaching calls for a "new form" of
mixed economy. He refers back to Pope Pius XI's statement that government "should supply
help to the members of the social body, but may never destroy or absorb them".[42] Hollenbach
writes that a socially just mixed economy involves labor, management and the state working
together through a pluralistic system that distributes economic power widely.[43] Pope Francis
has criticised neoliberalism throughout his papacy and encouraged state welfare programs for
“the redistribution of wealth, looking out for the dignity of the poorest who risk always ending up
crushed by the powerful”. [44] In “Evangelii gaudium”, he states; “Some people continue to defend
trickle-down theories which assume that economic growth, encouraged by a free market, will
inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion,
which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness
of those wielding economic power and in the sacralized workings of the prevailing economic
system. Meanwhile, the excluded are still waiting”. [45] Catholic social teaching opposes both
unregulated capitalism and state socialism.

However, subsequent scholars have noted that conceiving of subsidiarity as a "top-down,

government-driven political exercise" requires a selective reading of 1960s encyclicals. A more
comprehensive reading of Catholic social teaching suggests a conceptualization of subsidiarity
as a "bottom-up concept" that is "rooted in recognition of a common humanity, not in the
political equivalent of noblese oblige".[46]

Fascism

Although fascism is primarily a political ideology that stresses the importance of cultural and
social issues over economics, fascism is generally supportive of a broadly capitalistic mixed
economy. Fascism supports state interventionism into markets and private enterprise, alongside
a corporatist framework, referred to as the "third position" that ostensibly aims to be a middle-
ground between socialism and capitalism by mediating labor and business disputes to promote
national unity. 20th-century fascist regimes in Italy and Germany adopted large public works
programs to stimulate their economies, state interventionism in largely private-sector dominated
economies to promote re-armament and national interests. During World War II, Germany
implemented a war economy that combined a free market with central planning. The Nazi
government collaborated with leading German business interests, who supported the war effort
in exchange for advantageous contracts, subsidies, the suppression of trade unions and the
allowance of cartels and monopolies. [47] Scholars have drawn parallels between the American
New Deal and public works programs promoted by fascism, arguing that fascism similarly arose
in response to the threat of socialist revolution and similarly aimed to "save capitalism" and
private property.[48]

Social democracy

In the early post-war era in Western Europe, social democratic parties rejected the Stalinist
political and economic model then current in the Soviet Union, committing themselves either to
an alternative path to socialism or to a compromise between capitalism and socialism.[49] In this
period, social democrats embraced a mixed economy based on the predominance of private
property, with only a minority of essential utilities and public services under public ownership. As
a result, social democracy became associated with Keynesian economics, state interventionism
and the welfare state while abandoning the prior goal of replacing the capitalist system (factor
markets, private property and wage labor)[50] with a qualitatively different economic system
through reformed capitalism.[51][52][53]

Socialism

Mixed economies understood as a mixture of socially owned and private enterprises have been
predicted and advocated by various socialists as a necessary transitional form between
capitalism and socialism. Additionally, several proposals for socialist systems call for a mixture
of different forms of enterprise ownership including a role for private enterprise. For example,
Alexander Nove's conception of feasible socialism outlines an economic system based on a
combination of state enterprises for large industries, worker and consumer cooperatives, private
enterprises for small-scale operations and individually owned enterprises.[54]

The social democratic theorist Eduard Bernstein advocated a form of a mixed economy,
believing that a mixed system of public, cooperative and private enterprise would be necessary
for a long period before capitalism would evolve of its own accord into socialism.[55]

Following the Russian Civil War, Vladimir Lenin adopted the New Economic Policy in the Soviet
Union; the introduction of a mixed economy serving as a temporary expedient for rebuilding the
nation. The policy eased the restrictions of war communism and allowed a return of markets,
where private individuals could administer small and medium sized enterprises, while the state
would control large industries, banks and foreign trade.[56]

The People's Republic of China adopted a socialist market economy which represents an early
stage of socialist development according to the Chinese Communist Party. The communist
party takes the Marxist–Leninist position that an economic system containing diverse forms of
ownership—but with the public sector playing a decisive role—is a necessary characteristic of an
economy in the preliminary stage of developing socialism.[57]

The Socialist Republic of Vietnam describes its economy as a socialist-oriented market

economy that consists of a mixture of public, private, and cooperative enterprise—a mixed
economy that is oriented toward the long-term development of a socialist economy.
Typology

Mix of free markets and state intervention

This meaning of a mixed economy refers to a combination of market forces with state
intervention in the form of regulations, macroeconomic policies and social welfare interventions
aimed at improving market outcomes. As such, this type of mixed economy falls under the
framework of a capitalistic market economy, with macroeconomic interventions aimed at
promoting the stability of capitalism.[58] Other examples of common government activity in this
form of mixed economy include environmental protection, maintenance of employment
standards, a standardized welfare system and maintenance of competition.

Most contemporary market-oriented economies fall under this category, including the economy
of the United States.[59][60] The term is also used to describe the economies of countries that
feature extensive welfare states such as the Nordic model practiced by the Nordic countries
which combine free markets with an extensive welfare state.[61][62]

The German social market economy is the economic policy of modern Germany that steers a
middle path between the goals of social democracy and capitalism within the framework of a
private market economy and aims at maintaining a balance between a high rate of economic
growth, low inflation, low levels of unemployment, good working conditions, public welfare and
public services by using state intervention. Under its influence, Germany emerged from
desolation and defeat to become an industrial giant within the European Union.[63]

The American School is the economic philosophy that dominated United States national policies
from the time of the American Civil War until the mid-twentieth century.[64] It consisted of three
core policy initiatives: protecting industry through high tariffs (1861–1932; changing to
subsidies and reciprocity from 1932–the 1970s), government investment in infrastructure
through internal improvements and a national bank to promote the growth of productive
enterprises. During this period, the United States grew into the largest economy in the world,
surpassing the United Kingdom by 1880.[65][66][67]

Mix of private and public enterprise

This type of mixed economy specifically refers to a mixture of private and public ownership of
industry and the means of production. As such, it is sometimes described as a "middle path" or
transitional state between capitalism and socialism, but it can also refer to a mixture of state
capitalism with private capitalism.

Examples include the economies of China, Norway, Singapore and Vietnam—all of which feature
large state-owned enterprise sectors operating alongside large private sectors. The French
economy featured a large state sector from 1945 until 1986, mixing a substantial amount of
state-owned enterprises and nationalized firms with private enterprises.[68]

Following the Chinese economic reforms initiated in 1978, the Chinese economy has reformed
its state-owned enterprises and allowed greater scope for private enterprises to operate
alongside the state and collective sectors. In the 1990s, the central government concentrated its
ownership in strategic sectors of the economy, but local and provincial level state-owned
enterprises continue to operate in almost every industry including information technology,
automobiles, machinery, and hospitality. The latest round of state-owned enterprise reform
initiated in 2013 stressed increased dividend payouts of state enterprises to the central
government and mixed-ownership reform which includes partial private investment into state-
owned firms. As a result, many nominally private-sector firms are partially state-owned by
various levels of government and state institutional investors; and many state-owned enterprises
are partially privately owned resulting in a mixed ownership economy.[69]

Mix of markets and economic planning

This type of mixed economy refers to a combination of economic planning with market forces
for the guiding of production in an economy and may coincide with a mixture of private and
public enterprise. It can include capitalist economies with indicative macroeconomic planning
policies and socialist planned economies that introduced market forces into their economies
such as in Hungary.

Dirigisme was an economic policy initiated under Charles de Gaulle in France, designating an
economy where the government exerts strong directive influence through indicative economic
planning. In the period of dirigisme, the French state used indicative economic planning to
supplement market forces for guiding its market economy. It involved state control of industries
such as transportation, energy and telecommunication infrastructures as well as various
incentives for private corporations to merge or engage in certain projects. Under its influence,
France experienced what is called Thirty Glorious Years of profound economic growth.[63]
Hungary inaugurated the New Economic Mechanism reforms in 1968 that introduced market
processes into its planned economy. Under this system, firms were still publicly owned but not
subject to physical production targets and output quotas specified by a national plan. Firms
were attached to state ministries that had the power to merge, dissolve and reorganize them and
which established the firm's operating sector. Enterprises had to acquire their inputs and sell
their outputs in markets, eventually eroding away at the Soviet-style planned economy.

Green New Deal (GND) proposals call for social and economic reforms to address climate
change and economic inequality using economic planning with market forces for the guiding of
production. The reforms involve phasing out fossil fuels through the implementation of a carbon
price and emission regulations, while increasing state spending on renewable energy.
Additionally, it calls for greater welfare spending, public housing, and job security. GND
proposals seek to maintain capitalism but involve economic planning to reduce carbon
emissions and inequality through increased taxation, social spending, and state ownership of
essential utilities such as the electrical grid.[70]

Within political discourse, mixed economies are supported by people of various political
leanings, particularly the centre-left and centre-right. Debate reigns however over the appropriate
levels of private and public ownership, capitalism and socialism, and government planning
within an economy. The centre-left usually supports markets but argues for a higher degree of
regulation, public ownership, socialism and planning within an economy. The centre-right
generally accepts some level of public ownership and government intervention but argues for
lower government regulation and greater privatisation. In 2010, Australian economist John
Quiggin wrote: "The experience of the twentieth century suggests that a mixed economy will
outperform both central planning and laissez-faire. The real question for policy debates is one of
determining the appropriate mix and the way in which the public and private sectors should
interact."[71]

Criticism

Numerous economists have questioned the validity of the entire concept of a mixed economy
when understood to be a mixture of capitalism and socialism. Critics who argue that capitalism
and socialism can’t coexist believe either market logic or economic planning must be prevalent
within an economy.[72]

In Human Action, Ludwig von Mises argued that there can be no mixture of capitalism and
socialism.[73] Mises elaborated on this point by contending that even if a market economy
contained numerous state-run or nationalized enterprises, this would not make the economy
mixed because the existence of such organizations does not alter the fundamental
characteristics of the market economy. These publicly owned enterprises would still be subject
to market sovereignty as they would have to acquire capital goods through markets, strive to
maximize profits or at the least try to minimize costs and utilize monetary accounting for
economic calculation.[74] Friedrich von Hayek as well as Mises argued that there can be no
lasting middle ground between economic planning and a market economy and any move in the
direction of socialist planning is an unintentional move toward what Hilaire Belloc called "the
servile state".[75]

Classical and orthodox Marxist theorists also dispute the viability of a mixed economy as a
middle ground between socialism and capitalism. Irrespective of enterprise ownership, either
the capitalist law of value and accumulation of capital drive the economy or conscious planning
and non-monetary forms of valuation ultimately drive the economy. From the Great Depression
onward, extant mixed economies in the Western world are still functionally capitalist because
the economic system remains based on competition and profit production.[76]

See also

Christian democracy Neo-nationalism

Distributism
Political economy
Social credit
Public-private partnership
Corporatism
Public sector
Dirigisme
Regulation
Economic planning
Social liberalism
Economic interventionism
Third Way
Keynesian economics
Third Position
Market economy
Types of capitalism
National conservatism

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35. Philip J. Adler; Randall L. Pouwels (28 September 2016). World Civilizations (https://books.google.co
m/books?id=PPi5DQAAQBAJ&pg=PA442) (8 ed.). Cengage Learning. p. 442. ISBN 978-1-337-51764-
5. OCLC 1100703755 (https://www.worldcat.org/oclc/1100703755) .

36. Michael Charles Howard; John Edward King (14 July 2014). A History of Marxian Economics, Volume
I: 1883-1929 (https://books.google.com/books?id=IhgABAAAQBAJ&pg=PA66) . Princeton University
Press. p. 66. ISBN 978-1-4008-6052-4.

37. Pekka Suvanto; trans Roderick Fletcher (7 March 2016). Conservatism from the French Revolution to
the 1990s (https://books.google.com/books?id=Xd6zCwAAQBAJ&pg=PA105) . Springer. pp. 105–
106. ISBN 978-1-349-25888-8.

38. Tawney, R. H. (1964). Equality. London: Allen and Unwin. ISBN 0-04-323014-8.

39. Crosland, A. (1977). The Future of socialism. Westport, Conn: Greenwood Press. ISBN 0-8371-9586-1.
40. Santosh Mehrotra; Sylvie Guichard (29 October 2020). Planning in the 20th Century and Beyond:
India's Planning Commission and the NITI Aayog (https://books.google.com/books?id=6xzhDwAAQB
AJ&pg=PA285) . Cambridge University Press. p. 285. ISBN 978-1-108-49462-5.

41. Vuong, Quan-Hoang. Financial Markets in Vietnam's Transition Economy: Facts, Insights, Implications
(https://www.amazon.com/dp/3639233832) . ISBN 978-3-639-23383-4, VDM Verlag, February 2010,
66123 Saarbrücken, Germany.

42. Pius XI, Quadragesimo Anno (https://www.vatican.va/content/pius-xi/en/encyclicals/documents/hf_p

-xi_enc_19310515_quadragesimo-anno.html) , para 79, published 15 May 1931, accessed 12 August
2018; the papal text refers to "every social activity", not only to government.

43. David Hollenbach, S.J. (1984). "Unemployment and Jobs: A Theological and Ethical Perspective". In
Houck, John; Williams, Oliver (eds.). Catholic social teaching and the United States economy: working
papers for a bishops' pastoral. University Press of America. pp. 132–133.

44. Pope: Taxation should favor wealth redistribution for public services,
https://www.vaticannews.va/en/pope/news/2022-01/pope-francis-italy-tax-authority-agenzie-
entrate.html , Retrieved March 1, 2022.

45. Pope Francis understands economics better than most politicians,

https://www.theguardian.com/commentisfree/belief/2013/nov/27/pope-francis-inequality-biggest-
issue-our-time , Retrieved March 1, 2022.

46. Denis O'Brien (2014). "Subsidiarity and Solidarity". In Booth, Phillip (ed.). Catholic social teaching and
the market economy. The Institute of Economic Affairs. p. 454.

47. Industrial Investment in Nazi Germany: The Forgotten Wartime Boom, by Scherner, Jonas. 2006.
https://economics.yale.edu/sites/default/files/files/Workshops-Seminars/Economic-
History/scherner-060329.pdf .

48. The Political Economy of Fascism, by Gupta, Dipankar. 1977. Economic and Political Weekly, Vol. 12,
No. 25 (June 18, 1977), pp. 987–992.

49. Adams 1993, pp. 102–103: "The emergence of social democracy was partly a result of the Cold War.
People argued that if the Stalinist Soviet empire, where the state-controlled everything, showed
socialism in action, then socialism was not worth having. [...] The consensus policies of a mixed and
managed economy and the welfare state, developed by the post-war Labour government, seemed in
themselves to provide a basis for viable socialism that would combine prosperity and freedom with
social justice and the possibility of a full life for everyone. They could be seen as a compromise
between socialism and capitalism."

50. Weisskopf 1992, p. 10: "Thus social democrats do not try to do away with either the market or private
property ownership; instead, they attempt to create conditions in which the operation of a capitalist
market economy will lead to more egalitarian outcomes and encourage more democratic and more
solidaristic practices than would a more conventional capitalist system."
51. Miller 1998, p. 827: "In the second, mainly post-war, phase, social democrats came to believe that their
ideals and values could be achieved by reforming capitalism rather than abolishing it. They favored a
mixed economy in which most industries would be privately owned, with only a small number of
utilities and other essential services in public ownership."

52. Jones 2001, p. 1410: "In addition, particularly since World War II, distinctions have sometimes been
made between social democrats and socialists on the basis that the former have accepted the
permanence of the mixed economy and have abandoned the idea of replacing the capitalist system
with a qualitatively different socialist society."

53. Heywood 2012, pp. 125–128: "As an ideological stance, social democracy took shape around the mid-
twentieth century, resulting from the tendency among western socialist parties not only to adopt
parliamentary strategies but also to revise their socialist goals. In particular, they abandoned the goal
of abolishing capitalism and sought instead to reform or 'humanize' it. Social democracy, therefore,
came to stand for a broad balance between the market economy, on the one hand, and state
intervention, on the other."

54. Feasible Socialism: Market or Plan – Or Both:

http://www.whatnextjournal.co.uk/Pages/Ratner/Feassoc.html

55. Steger, Manfred B. The Quest for Evolutionary Socialism: Eduard Bernstein And Social Democracy.
Cambridge, England, UK; New York, New York, USA: Cambridge University Press, 1997. pg. 146.

56. THE NEW ECONOMIC POLICY (NEP), https://alphahistory.com/russianrevolution/new-economic-

policy-
nep/#:~:text=Introduced%20by%20Vladimir%20Lenin%20in,of%20markets%20and%20petty%20trad
e ., Retrieved March 2, 2022.

57. "Socialist Market Economic System" (http://english.mofcom.gov.cn/article/topic/bizchina/economics

ystem/200406/20040600239133.shtml) . Ministry of Commerce of the People's Republic of China.
June 25, 2004. Retrieved February 8, 2018. "The development of the economic system with public
ownership playing a dominant role and diverse forms of ownership developing side by side is a basic
characteristic of the socialist economic system at the preliminary stage. This is decided by the quality
of socialism and the national situation in the preliminary stage: first, China, as a socialist country,
should persist in public ownership as the base of the socialist economy; second, China, as in its
preliminary stage, should develop diverse forms of ownership on condition that the public ownership
plays a dominant role"
58. Pollin, Robert (2007). "Resurrection of the Rentier" (http://www.peri.umass.edu/fileadmin/pdf/other_p
ublication_types/NLR28008.pdf) (July–August). Book review of Andrew Glyn's Capitalism
Unleashed: Finance, Globalization, and Welfare. In New Left Review (46): 141–142. "The underlying
premise behind the mixed economy was straightforward. Keynes and like-minded reformers were not
willing to give up on capitalism, and n particular, two of its basic features: that ownership and control
of the economy's means of production would remain primarily in the hands of private capitalists; and
that most economic activity would be guided by 'market forces', that is, the dynamic combination of
material self-seeking and competition. More specifically, the driving force of the mixed economy, as
with free-market capitalism, should continue to be capitalists trying to make as much profit as they
can. At the same time, Keynes was clear that in maintaining a profit-driven marketplace, it was also
imperative to introduce policy interventions to counteract capitalism’s inherent tendencies—
demonstrated to devastating effect during the 1930s calamity—toward financial breakdowns,
depressions, and mass unemployment. Keynes’s framework also showed how full employment and
social welfare interventions could be justified not simply on grounds of social uplift, but could also
promote the stability of capitalism."

59. "U.S. Economy - Basic Conditions & Resources" (http://usa.usembassy.de/economy-

conditions.htm) . U.S. Diplomatic Mission to Germany. "The United States is said to have a mixed
economy because privately owned businesses and government both play important roles." Retrieved
October 24, 2011.

60. (4)Outline of the U.S. Economy – (2)How the U.S. Economy Works (https://web.archive.org/web/2012
0114051146/http://infopedia.usembassy.or.kr/ENG/_f_030401.html) . U.S. Embassy Information
Resource Center. "As a result, the American economy is perhaps better described as a "mixed"
economy, with the government playing an important role along with private enterprise. Although
Americans often disagree about exactly where to draw the line between their beliefs in both free
enterprise and government management, the mixed economy they have developed has been
remarkably successful." Retrieved October 24, 2011.

61. Lahti, Arto. Globalization & the Nordic Success Model: Part II. 2010. Arto Lahti & Ventus Publishing
ApS. p 60. ISBN 978-87-7681-550-9.

62. Eds. Johan Fritzell, Bjorn Hvinden, Mikko Kautto, Jon Kvist, Hannu Uusitalo. The Nordic Welfare States
in the European Context. 2001. Routledge. p 3. ISBN 0-415-24161-8.

63. (Gardner)

64. "The Progressive Movement" (http://www.u-s-history.com/pages/h1061.html) . United States

History. Retrieved February 12, 2011.

65. The Making of Modern British Politics, Martin Pugh

66. Global Political Economy, Robert O'Brien and Marc Williams

67. See the following sources:
Gill: "By 1880 the United States of America had overtaken and surpassed the UK as industrial
leader of the world.: (from Trade Wars Against America: A History of United States Trade and
Monetary Policy Chapter 6 titled "America becomes Number 1" pg. 39–49 – published 1990 by
Praeger Publishers in the USA – ISBN 0-275-93316-4)

Lind: "Lincoln and his successors in the Republican party of 1865–1932, by presiding over the
industrialization of the United States, foreclosed the option that the United States would remain a
rural society with an agrarian economy, as so many Jeffersonians had hoped." and "Hamiltonian
side … the Federalists; the National Republicans; the Whigs, the Republicans; the Progressives."
(from Hamilton's Republic (https://archive.org/details/hamiltonsrepubli00mich) Introduction pg.
xiv-xv – published 1997 by Free Press, Simon & Schuster division in the USA – ISBN 0-684-83160-
0)

Lind: "During the nineteenth century the dominant school of American political economy was the
"American School" of developmental economic nationalism. [...] The patron saint of the American
School was Alexander Hamilton, whose Report on Manufactures (1791) had called for federal
government activism in sponsoring infrastructure development and industrialization behind tariff
walls that would keep out British manufactured goods. [...] The American School, elaborated in
the nineteenth century by economists like Henry Carey (who advised President Lincoln), inspired
the "American System" of Henry Clay and the protectionist import-substitution policies of Lincoln
and his successors in the Republican party well into the twentieth century." (from Hamilton's
Republic Part III "The American School of National Economy" pg. 229–230 published 1997 by
Free Press, Simon & Schuster division in the USA – ISBN 0-684-83160-0)

Richardson: "By 1865, the Republicans had developed a series of high tariffs and taxes that
reflected the economic theories of Carey and Wayland and were designed to strengthen and
benefit all parts of the American economy, raising the standard of living for everyone. As a
Republican concluded [...] "Congress must shape its legislation as to incidentally aid all branches
of industry, render the people prosperous, and enable them to pay taxes [...] for ordinary expenses
of Government." (from "The Greatest Nation of the Earth" Chapter 4 titled "Directing the
Legislation of the Country to the Improvement of the Country: Tariff and Tax Legislation" pg. 136-
137 published 1997 by the President and Fellows of Harvard College in the USA – ISBN 0-674-
36213-6)
 Boritt: "Lincoln thus had the pleasure of signing into law much of the program he had worked for
through the better part of his political life. And this, as Leonard P. Curry, the historian of the
legislation has aptly written, amounted to a "blueprint for modern America. [...] The man Lincoln
selected for the sensitive position of Secretary of the Treasury, Salmon P. Chase, was an ex-
Democrat, but of the moderate variety on economics, one whom Joseph Dorfman could even
describe as 'a good Hamiltonian, and a western progressive of the Lincoln stamp in everything
from a tariff to a national bank.'" (from Lincoln and the Economics of the American Dream
Chapter 14 titled "The Whig in the White House" pg. 196–197 published 1994 by University of
Illinois Press in the USA – ISBN 0-252-06445-3

68. Rosser, Mariana V. and J Barkley Jr. (2004). Comparative Economics in a Transforming World
Economy. MIT Press. p. 187. ISBN 978-0262182348. "After World War II a wave of nationalizations
occurred, affecting the Bank of France, the four largest commercial banks, the four leading groups of
insurance companies, all-electric power and gas producers, the coal mining industry, Air France, and
the Renault automobile company (the last specifically because of wartime collaboration with the
Nazis by its owner). Until 1981 no other firms were nationalized, although occasionally new public
enterprises were created from scratch or the government bought part of ownership, as it did with
Dassault Aircraft in 1978. Until 1986 none of these industries were denationalized."

69. Fan, He (January 9, 2015). "The long march to the mixed economy in China" (http://www.eastasiaforu
m.org/2015/02/09/the-long-march-to-the-mixed-economy-in-china/) . East Asia Forum. East Asia
Forum. Retrieved February 9, 2018.

70. The Green New Deal Explained, https://www.investopedia.com/the-green-new-deal-explained-

4588463 , Retrieved March 2, 2022.

71. Zombie Economics: How Dead Ideas Still Walk among Us (https://books.google.com/books?id=pTgiR
Dj-uIYC&pg=PA78&lpg=PA78&dq=%22real+question+for+policy+debates+is+one+of+determining+the
+appropriate+mix%22&source=bl&ots=c-OtfOKT0d&sig=ACfU3U0PSeHlrct_bKaaLo0cIglrT9Oj2Q&hl=e
n&sa=X&ved=2ahUKEwjUhvqYkLXhAhUIZKwKHVWcA5EQ6AEwAHoECAEQAQ#v=onepage&q=%22rea
l%20question%20for%20policy%20debates%20is%20one%20of%20determining%20the%20appropriat
e%20mix%22&f=false) , John Quiggin, Princeton University Press, 2010, page 78. The author made
this statement in his chapter which is sharply critical of the strong version of "The Efficient Market
Hypothesis," esp. as it pertains to financial markets.

72. Mixed Economic System, https://www.investopedia.com/terms/m/mixed-economic-system.asp ,

Retrieved March 1, 2022.

73. Mises, Ludwig (2007). Human Action: A Treatise on Economics. Liberty Fund. p. 259. ISBN 978-
0865976313. "There is no mixture of the two systems possible or thinkable; there is no such thing as a
mixed economy, a system that would be in part capitalistic and in part socialist."
74. Mises, Ludwig (2007). Human Action: A Treatise on Economics. Liberty Fund. p. 259. ISBN 978-
0865976313. "The fact that the state or municipalities own and operate some plants does not alter the
characteristic features of a market economy. These publicly owned and operated enterprises are
subject to the sovereignty of the market. They must fit themselves, as buyers of raw materials,
equipment, and labor, and as sellers of goods and services, into the scheme of the market economy.
They are subject to the laws of the market and thereby depend on the consumers who may or may not
patronize them. They must strive for profits, or at least, to avoid losses."

75. Gardner, Martin. Whys of a Philosophical Scrivener St. Martin's Press (1991), p. 126.

76. Paul Mattick (1969). "The Limits of the Mixed Economy" (https://www.marxists.org/archive/mattick-p
aul/1969/marx-keynes/ch20.htm) . Marxism.org. Retrieved 17 January 2014. "To be sure, 'orthodox
Marxism' maintains that the mixed economy is still the capitalism of old, just as 'orthodox' bourgeois
theory insists that the mixed economy is a camouflaged form of socialism. Generally, however, both
the state-capitalist and mixed economies are recognized as economic systems adhering to the
principle of progress by way of capital accumulation."

Further reading

Buchanan, James M. (1986) Liberty, Market and State: Political Economy in the 1980s New York
University Press.

Buckwitz, George D. (1991) America’s Welfare State: From Roosevelt to Reagan. The Johns Hopkins
University Press.

Derthick, Martha and Paul J. Quirk (1985) The Politics of Deregulation. Washington, D.C.: The Brookings
Institution.

Gross, Kyle B. (1991) The Politics of State Expansion: War, State and Society in Twentieth-Century Britain.
New York: Routledge.

Rosin, Kirk (1992). "Economic theory and the welfare state: a survey and interpretation". Journal of
Economic Literature. 30 (2): 741–803. A review essay looking at the economics literature.

Sanford Ikeda (1997). Dynamics of the Mixed Economy: Toward a Theory of Interventionism. London:
Routledge.

External links

Mixed economy (https://www.britannica.com/topic/mixed-economy) at Encyclopædia

Britannica Online
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