- Download PDF
3 Answers | Add Yours
Mixed economies have the disadvantages of both government central planning and weak capital investment. Either economies are free to develop and grow to the fullest as as the market dictates, or they are constrained by government by various degrees and variously tepidly plod along.
It's clear to most of the world that centrally-planned economies will fail; what's not so clear is that "state controlled capitalism" is also destined to fail, but at a slower rate. There is no such thing as "state controlled capitalism," as Capitalism, by definition, implies a Free Market. Either the economy is free or it is not.
Economies, like religions, must be free from the government, because government, through its politicians, always perverts a country's economic resources to its own ends, fostering corruption, while disallowing the people who earned it from benefiting from their own labor and investment.
Although the economic growth of China has been fantastic, it would be even more so if the government would allow its citizens their personal and economic freedoms.
Nowadays, more countries are thinking that state controlled capitalism is a better answer. We see China as a major example of how this can work. The idea is that companies do not need to be privatized -- the government can still run them. However, the government should try to get more professional managers and run the companies much more on the basis of free market ideas. This is something of a middle way between a planned economy and complete privatization.
International investors might be another option. Privatization can be a solution, but only if it makes financial sense both for the company and the country. Encouraging investment from other countries might make the company more stable.
We’ve answered 320,557 questions. We can answer yours, too.Ask a question