What is a mixed economy?

A mixed economy is characterized by the combination of elements from both capitalism and socialism. This system allows for the coexistence of private and public sector enterprises, enabling individuals to own businesses and property while also permitting government intervention in the economy to address social needs and regulate markets.

In a mixed economy, certain industries might be government-run, while others remain under private control, creating a balance that aims to harness the efficiency and innovation of capitalism while ensuring broader access to resources and welfare through social policies. This helps to address market failures and inequalities that can arise in a purely free-market or purely socialist system.

The characteristics of a mixed economy give it flexibility in addressing the economic challenges a society may face, making it a prevalent model worldwide.