| An economy in which the government uses coercive powers (command and control) to answer the three questions of allocation. In this type, some allocation decisions are undertaken by markets, the vast majority are made through central planning. Two notable command economies of the 20th century were the economic systems of China and the Soviet Union. Follows the ideas of Karl Marx. | An economy, or economic system, that relies on both markets and governments to allocate resources. Markets allocate resources through voluntary choices made by living, breathing people. Government forces allocation through involuntary taxes, laws, restrictions, and regulations. Both play important roles in an economy. Sweden and Canada are examples of mixed economies. Follows the ideas of John Maynard Keynes, and John Stuart Mill. |
It has become a rallying cry for many business leaders of the second estate who oppose government intervention, regulation, or even taxation. It is based on a belief that markets alone can achieve an efficient allocation of our resources. While no country has a pure market economy, one that comes close is the United States. Follows the ideas of Adam Smith. |
| Command | Mixed |
Market |
| Everyone is taken care of, no one is left wanting for the basic necessities | People have the freedom to choose and make decisions |
Consumers influence goods and services produced |
| No huge variation in prices, because they are controlled | Government provides essential services (health care, welfare) to people in need. |
Rewards provide incentive to improve |
| The products that are sold are limited in variety | Businesses are limited in what they can do because of the restrictions placed on them by government |
Consumers may be manipulated by advertising |
| The government controls every, or almost every aspect of people's lives | Higher taxes are necessary to pay for government expenses |
The economy is not steady resulting in periods of unemployment |
