lesson
Mixed system
Introduction
After you have worked through this section of learning unit, you should be able to:
- describe the main features of a mixed economic system
In the real world, the majority of economies are mixed – that is, they combine elements of command, market and even traditional systems in varying degrees. Each nation has a different emphasis on the three basic types of economic systems.

For example, the USA puts greater emphasis on the free-market mechanism, but it also has a government and some socialist programmes. By contrast, many countries in Europe have a greater degree of government involvement in economic decisions, while still being primarily market oriented. Some elements of the traditional system exist in most economies as well, for example, a son who takes over his father’s business, not because he wants to do what his father does, but rather out of a sense of duty or religious motivations.
Watch the following section of the video clip about the mixed system from 13:43 minutes until the end:
Activity
Now do the following activities:
The South African economy can best be described as which type of economy?
Think again.
The South African economy does have elements of a traditional system, but it is not the predominant (principal/leading) system. The predominant economic system in South Africa is mixed because the country has elements of a market system, a command system and a traditional system.
Think again.
The South African economy does have elements of a command system, but it is not the predominant (principal/leading) system. The predominant economic system in South Africa is mixed because the country has elements of a market system, a command system and a traditional system.
Think again.
While the market plays a dominant role in the South African economy, it is not purely a market system. The predominant economic system in South Africa is mixed because the country has elements of a market system, a command system and a traditional system.
Correct!
The predominant economic system in South Africa is mixed because the country has elements of a market system, a command system and a traditional system.
In a mixed economy, society answers the “what”, “how” and “for whom” questions through a free-market system only.
Think again. The statement is false.
A mixed economy combines elements of a market economy and a command economy. The economic problem is therefore answered partly by the free market and partly by a central authority.
You are right! The statement is false.
A mixed economy combines elements of a market economy and a command economy. The economic problem is therefore answered partly by the free market and partly by a central authority.
The economic problem is solved through the combination of efforts by the public and private sectors.
You are right! The statement is true.
Some goods and services are produced privately where the price is determined by the market system, and some goods and services, such as healthcare and national defence, are provided by government (i.e. the public sector).
Think again. The statement is true.
Some goods and services are produced privately where the price is determined by the market system, and some goods and services, such as healthcare and national defence, are provided by government (i.e. the public sector).
Which one of the following types of economic system is typically characterised by full public ownership of property?
You are right!
Typically, under a pure command system, the government or some central authority owns all the property in that economy. We thus refer to “full public ownership” of property with no scope for private ownership.
Think again.
Typically, a pure market economy is characterised by “full private ownership” of property. Full private ownership leaves no scope for public ownership, and as a result, a pure market economy does not have a government or central authority.
Think again.
A mixed economy has elements of a command and a market economy with varying emphasis placed on each, depending on the particular economy. A mixed economy is therefore characterised by public and private ownership of property.