How would increasing the role of the public sector in a mixed economy most likely affect consumer sovereignty

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28 July, 10:10

How would increasing the role of the public sector in a mixed economy most likely affect consumer sovereignty

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Cesar Mcconnell · Answer 1

A mixed economy is an economic system in which the state intervenes heavily in private economic processes. However, this is not a central administration economy, since a market economy always works in the background.

Mixed economies are characterized, among other things, by a high degree of interlinking of business and politics, a large participation of the state in publicly significant companies, an economically active bureaucracy, strong regulation and strong government interventions in the economy.

A strong state intervention, especially in developing countries, is often justified by the fact that an industrialization process should be started. If this succeeds, the state can often be observed as a supervisory body.

Now, if in a mixed economy the state begins to take greater powers, there is a possibility that it will harm the private sector, taking away the possibilities of obtaining profits, thereby limiting its investment will. In addition, the ability of individuals to choose is limited, due to the greater regulation of the economy by the state.