What is mixed economy 1

mixed economic order

is characterized by a combination of different economic and political decision-making and coordination processes. For western market economies, following Robert A. Dahl and Charles E. Lindblohm, in addition to the market system, democracy (polyarchy), public bureaucracies and group negotiations between associations are named as characteristic coordination procedures. This system would have to be modified for the socialist central administration economies. The basic coordination process, the system of central planning and accounting, like the market system, does not work in isolation, but in connection with state bureaucratic apparatus, through negotiations between state organs or power groups, discretionary interventions by the central authorities in the course of plan implementation and with the help of spontaneous and mostly illegal ones Initiatives. From this point of view, all realized orders, i.e. both the market economy and the planned economy, appear as mixed systems. With this understanding, the differences in function and meaning between the individual processes remain in the dark; it also suggests the idea of ​​any mixability. The highly different coordinative problem-solving power of the procedures becomes apparent when the contribution to solving the allocation problem is taken into account: The basic allocative problem that arises in every economic order, the economic subjects in view of the fact that the goods processes cannot be overlooked and the interdependence of goods processes through the scarcity of the Informing goods and sanctioning allocative decisions positively or negatively can generally only be resolved within the framework of a decentrally coordinated market system or a centrally coordinated planning and accounting system. Both allocation systems can therefore be described as primary coordination processes. It is undisputed that they only work in conjunction with other procedures: The market fails in the allocation of collective goods that have to be provided by state bureaucratic bodies. Private activities, spontaneous market elements or discretionary management instructions are also indispensable additions for the functioning of the central planning system. However, the procedures listed are to be assessed as secondary coordination procedures, since they would be overwhelmed by themselves to bring about a rational allocation of goods in an economy based on the division of labor. Rather, they have supplementary functions that they can only fulfill by being supported by and integrated into the primary allocation systems. This results in the following conclusions for understanding mixed economic systems: In relation to the distinction between primary and secondary coordination processes, both the realized market economies and the socialist central administrative economies are indeed mixed economic systems. However, the coordination processes cannot be mixed at will. The decisive criterion for the concrete mixing ratio has to be the conformity of the secondary processes with the functional conditions of the primary coordination process. Experiences with dirigism, interventionism or the welfare state indicate limits for the functioning of the market system. If the experiences with the socialist market economies are also taken into account, the effects of a mixture of the primary coordination procedures can be determined: The attempt to achieve a balanced coexistence of the decentralized-coordinated market system and the centrally-coordinated planning and accounting system would lead to a control chaos. Literature: Leipold, H., Economic and Social Systems in Comparison, 5th edition, Stuttgart 1988.

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