The Mixed Economy
Neither a pure market economy nor a pure social economy exists in reality.
All economies exhibit instincts of social economy as well as instincts of a free economy. A mixed economy can be defined as one in which resources are allocated partly through the price mechanism and partly by the state. The advantages of such an economic system draw from the advantages of both the free economy and the socialist economy.
All economies are mixed - it is just a matter of degree of "mixture".
The economy of the U.S.A comes closest to being a free enterprise economy and that of the former USSR closest to being a social economy. Both of these, however, are more properly described as mixed economies because they each contain features of market economies and features of social economies.
The economy of the U.S.A comes closest to being a free enterprise economy and that of the former USSR closest to being a social economy. Both of these, however, are more properly described as mixed economies because they each contain features of market economies and features of social economies.
The difference being that in the USA, there is less government intervention in the economy and greater reliance on the price mechanism to allocate resources than in the former USSR. The balance between the role of the market mechanism and the role of the government differs markedly in different economies.