With reference to the experience of Pakistan 'Discuss the merits and demerits of a mixed economy?

Answer 1

First: What is a 'mixed economy'?

The mixed economy refers to such an economic system wherein two the sector exist and function for achieving national objectives. The two sectors are the public sector and private sector. Both these sector exist and function for achieving national objectives. Both these sectors make the economic system of the country. In fact the mixed economy is the happy combination of private enterprise with government enterprise on the one side there is freedom of enterprise, private ownership and profit earning. On the other side there is government guidance and control so as to stop evil economic, pressures. In order to remove the effects of the capitalistic economy, mixed economy has been introduced. It prevails in most of the countries of the world. Pakistan has also mixed economy, where government and public sector provide guidance to the private sector.

Merits

The mixed economy is helpful in increasing national production in the country. Both public and private sectors work hard to bring about more production. The problems created by free enterprise and too much public control are solved through mixed economy. It provides freedom of enterprise ownership and profit earning as well as social welfare and political freedom. And all the national recourses are utilized under mixed economy.

Demerits

Mixed economy is half way house. It is not helpful in achieving optimal use of national resources. The mixed economy suffers from the drawbacks of both the capitalism

and the socialism. Mixed economy seldom achieved progress. It suffers from continues back wardness. Under mixed economy wastage of different types occurs in the economy.