In a market economy, an individual’s income can rise and fall depending on their success. An individual does not depend on the communities prosperity but rather there own. Everything is driven by supply and demand allowing for overall individual gain and random prosperity. A mixed economy, on the other hand, keeps significant loss and gain to a minimum as the economy tends to adapt to change. Unlike a pure market economy, individual gain depends almost solely on the community’s success. So, as the community’s economic status improves, the citizens of the community prosper. Perhaps the best part of the Mixed Economy System is that it does incorporate some of the values of a market economy; such as the ability to allow an individual to proper when his or her community is in decline. As the individual profits, he or she will begin to pour money back into the community helping the community’s economic status rise along with its citizens’ success.
Often time’s mixed economies institute some type of health related welfare system in order to support the unemployed and provide health care to the general population. This is helpful because it can aid in guaranteeing that qualified health care professionals and welfare workers are trained prior to employment. It can also aid in ensuring that the lower income brackets are able to access the same level of health-care and treatment that people in higher income brackets are allowed. However with any type of welfare system there is the possibility of people abusing it and taking be taken advantage it of far too often. This could ultimately lead to a loss of government funds. This could also lead to many of the countries medical professionals to seek out the private sector in order to supplement or replace there decreasing amount of income in the Public sector.
One other benefit of mixed economy could be the level of control that the government has in a mixed economy, which often leads to the government having a major role in the dealings of companies and corporation as well as threw own services. At the same time, the private sector will have an important role in helping to build government infrastructure to deliver these services. This can cause an increase in overall production and efficiency. Now the drawback would be if the government failed to clearly identify the correct type of infrastructure it needs from the private sector. Production may not keep up with supply and demand of the general population and create a surplus, or deficiency of goods or services, this then contributes to loss of revenue or capital.
Now when dealing with a Market Economy there are several benefits and drawbacks. One of the benefits a market economy would be economic freedom. Economic freedom typically allows for a higher standard of living and better work wages. Unfortunately however, these economic freedoms and benefits of better wages are not always the case for new countries adopting a market based economy often times these transformations can lead to even more unrest and unemployment. Counties that are newly adopting this system should enter into it slowly so as not to disturb the economic balance too quickly.
One other benefit of dealing with a Market economy could be the amount of price flexibility. Price flexibility allows for most prices to rise and fall based on the current level of supply and demand. This in turn can help business in the private sector to avoid tremendous profit loss when a product is no longer in high demand. However if the cost of a product rapidly increases it could cause severe hardships to that countries citizens. For example the rising costs of Gas in the U.S. have caused many Americans to rely on other means of transportation, heating costs have risen, and even plane and bus tickets are more expensive because of the cost of gas.
All in all both systems offer many benefits and many drawbacks however when dealing with a market economy it is a lot easier for an individual to carve his own wealth or prosperity. Due to limited government influence a company in the private sector can devise its own price plans, marketing ideas and so on, in order to capitalize on its product(s). If a person is able to gain more income with a little more effort and determination they are able to re-invest into there communities and government which in turn aids in the increase of the countries economy. Ultimately a Market economy allows everyone the opportunity to achieve the great dream of money and power.