Question

What factors caused American businesses to develop into a mixed economic system rather than some other type of economic system?

Answer 1

A mixed society or an economy is one which takes the advantage of both capitalism and government intervention in business. Capitalism is an ideology which says that in the long run those firms which survive in the market place are the ones that freely can enter or exit a market and there are no restrictions on trade.

On the other hand, a conservative or a communist system is one which was previously adopted in countries such as Russia and China and banked high on doing well for all.

The US economy has grown primarily because of the adoption of a mixed approach to managing the economic system. The reason for this is that while capitalism allows for higher customer and consumer satisfaction since companies tend to produce those goods that are high in demand and allow for innovation to happen so that they can stay competitive in the business environment, on the other hand government can intervene in areas wherever required to prevent unfair practices and to bring in regulations that help in overall welfare and equal distribution of income.

Capitalism and Socialism are two extreme ends which solve no purpose. While socialism tends to have the downside that excessive government organizations tend to be inefficient, Capitalism if gone unchecked can lead to serious problems for the economy which translate into unchecked profits and unfair trade practices at times.

Thus the economy of USA has been rightly balanced by adopting a mixed approach to managing its resources. Capitalists have no restrictions of entry and exit in most areas while the government implements schemes to closely monitor any wrongdoings in the same. This promotes a balance between capitalism and socialism which is very good for the society and has readily been adopted by other countries such as China and India also which are gradually developing themselves as the largest centers of economic and social development.

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