Difference Between Capitalism And Mixed Economy

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The scope of capitalism is global because the large organizations that dominance business and enterprise seek to expand to as many countries as possible. The international rules of engagement and business laws often vary, because different countries have different regulations with regard to foreign intervention. Capitalism is a system that integrates several countries around the world under the umbrella of one or a few more dominant superpowers. The main source of funds to fuel a capitalist economy often comes from just a few countries, often one, but the policies affect a multitude of others across the globe.

The scope of a mixed economy is usually based within single nations because there are different degrees to government interventions, free markets and private ownership. A mixed economy is an economic system characterized by profit as a primary motive, private ownership of production methods and economic coordination. Unlike a capitalist economy, a single government wields control over the mixed economy within its jurisdiction and oversees the implementation of laws and regulations (Stilwell, 2006). This makes most of the prosperous countries around the world be associated with this system, with most supporters viewing it as a conciliation between free-market capitalism and state socialism.


In a capitalist society, financial regulation and economic coordination are often determined by the largest and most powerful countries. A majority of the business interacted and operations carried out in a capitalist society benefit a social hierarchy where there will always be poor nations. The regulation of the system is almost non-existent because the large corporations that take advantage of the dismissive trade barriers maximize their profits as a primary objective. It is difficult to place one oversight regulatory committee in a capitalist system because access to capital and resources are the fundamental elements of determining success.

In a mixed economy, however, there are regular instances of economic interventionism and strong regulatory oversight. Each government is responsible for ensuring the prosperity of business within their countries by setting up laws favorable for both local and international businesses. A majority of the industries are privately owned, meaning that there are only a few social services and public utilities under public ownership (Abbot, 2001). The level of regulation is very high, and most companies must be accountable for most of their activities and operations in the community. A mixed economy is a characteristic of countries with democratically elected governments where there is significant control over activities harmful to society.

Social Welfare

A capitalist economy has almost no beneficial social welfare programs that cause significant positive differences to the local communities. A majority of multinational companies operate on the simple premise of profitability and rarely engage in community and societal projects. Capitalism does not promote the interests of the people, but rather the profitability of large corporations that rely on natural resources located in a multitude of countries around the world. The principles of capitalism always put the well-being of the community second to gaining profits and achieving corporate growth and development.

A mixed economy, however, is strongly characterized by strong social welfare programs that seek to boost living standards of the citizens. A majority of the richest countries in the world have mixed economies, and this is characterized by the high average standards of living the citizens can enjoy. Nordic countries offer the best definition of ‘welfare states,’ and this is backed by the fact that they have mixed economies (Lahti, 2010). Aspects such as maintaining employment standards, environmental protection and standardizing welfare are characteristics of governments in mixed economies. There is a sense of accountability for the prosperity of the population within most mixed economies around the world.

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