Mixed economic system is a system that shows the role of government and private sectors in overcoming the economy problem so it does not happen in full mastery of a group of people over economic resources. Mixed economic systems are also referred to as economic democracy, welfare state, or Keynesianism.
The characteristics of mixed economy system are as follows:
a. The private companies also engage in economic activities, but the sectors concerning the livelihood of the people is managed by the government.
b. Most interactions occurred in the market economy, but the government still intervened with its economic policies. For example to protect consumers, the government is using pricing policies on (ceiling price). To protect the manufacturers, the government is using the basic price policy (floor price). Thus, government intervention do to make healthy economic life, prevent monopoly, and prevent and overcome if the economic crisis.
c. The existence of competition in economic activity, but does not lead to adverse competition because the government monitored.
In economic democracy must be avoided negative traits following:
a. System of free competition. This system shows the exploitation of humans and other nations. In addition, this system will lead to weakness in the structure and maintain the position of Indonesia in the world economy.
b. Etatisme system. This system provides an opportunity for the state and its apparatus is dominant. In addition, the system is urgent and deadly potential, creativity, and initiative of economic units outside the state sector.
c. Monopoly and unfair competition. Concentration of economic power in the form of monopoly should be avoided because it can harm the community. In addition, it will also lead to economic inequality.
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