mixed economies can evolve hen societies with different kinds of economies interact

Question

Mixed economies exist for several reasons. One reason is that when people from one type of economy
come into contact with other cultures, they often accept technologies and ways of doing things that
can benefit them. An event like a revolution also may invite economic change. A famous example of
this took place in Russia in 1929. Joseph Stalin’s iron control of the government transformed a largely
peasant society into the massive Soviet industrial economy. A third reason is that nations tend to evolve
over time, shedding some policies that do not work and adding new ones that do.
An economy can also evolve during times of crisis. The United States went through the Great
Depression, the worst period of economic decline in U.S. history, from around 1929 to 1939. Conditions
were so harsh that the government had to find solutions and established unemployment insurance, the
minimum wage, and bank deposit insurance. This was an example of a mostly capitalistic market
economy evolving into a mixed market economy. This evolution took place because the democratic
political system allowed people to demand changes.
The WHAT, HOW, and FOR WHOM Decisions
When we consider political parties and economic systems at the same time, the picture often becomes
muddied. For example, North Korea is often called the Democratic People’s Republic of Korea. This is
despite the fact that there is virtually no democracy there at all. Some mixed economies have a
political system based on democracy, while others do not.
A nation’s involvement in the three economic decisions can vary greatly. Some governments get
involved only in certain key sectors or industries and leave the rest to markets. The more socialistic a
country is, the more likely it is that its government makes major economic decisions. These
governments often say they make these decisions for the benefit of their people.
Shared Characteristics of Mixed Economies
Because there are so many different kinds of mixed economies it is difficult to describe them all. But
Figure 2.2 shows some of the more important ones.
Perhaps the most distinctive feature of a market or capitalistic economy is the private ownership of
productive resources and the freedom to use them as the owner wants. In this system, the personal,
freely made decisions of many individuals determine the allocation of resources.
Under socialism, private individuals own some of the productive resources, while the government owns
and uses the rest. The extent of government-owned resources varies from one socialist country to the
next. More socialist countries have the highest degree of government ownership. For example, in the
former Soviet Union the government owned everything. Yet in the socialist-leaning economy of
Venezuela, former president Hugo Chavez nationalized only some of the major industries to help pay for
his socialist programs. Another shared characteristic under socialism is that the more a country’s
economy leans towards socialism, the more likely it is for that country’s government to be communist.

Answer 1

That was well said. Was there a specific question, though?