Monday, 14 October 2013

Mixed Economy and Planning

Mixed Economy is the outcome of the compromise between the two diametrically opposite school of thoughts - the one which champions the cause of capitalisation and the other which strongly pleads for the socialisation of all other means of production and control of entire economy by the state. Mixed economy had the salient features if capitalism and socialism very clearly and cleverly incorporated.

Mixed economy is necessarily a planned economy. the public sector will have to be operated according to certain priorities and to achieve certain specified social and economic goals. The Govt. will have to prepare an integrated economic plan in which private will also have well defined role.

The success of planning in a mixed economy depends upon the following factors:

1) to what extent is the public sector able to pursue the socially determined goals?

2) to what extent is the state able to guide the private sector to follow the socially determined goals?

3) to what extent is the state able to check the distortions in investment decisions arising out of private sector interests going against overall objectives of the economy?

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