Mixed Economies: Balancing Government Intervention and Market Forces

3. Mixed Economies Money is entrusted to believers for use as gods purposes - 1 Timothy 5:4, 8, 16

4. Mixed economy Democratic socialism Nationalization Neo-conservatism Welfare capitalism Recession Depression Keynes Galbraith Inflation Fiscal policy Monetary policy Supply-side economics Demand-side economics Reaganomics Thatcherism Mixed Economy Terms

5. Private Enterprise to Mixed Economy • It was the great depression that began to develop mixed economies in nations • Remember Roosevelt’s New Deal and this brought government intervention and control into the American economy. • These ideas have been modeled in many other economic systems.

6. Also, remember the ideas set forth by John Maynard Keynes. Keynes believed that government intervention and spending was necessary in an economy. • There have also been instances were economies that have traditionally been planned begin to introduce elements of the market economy. A crumpling Soviet Union and current day China are good examples of this reverse process.

7. To what extent can nations favour one form of economic system over another? • Supply-side economics • Reaganomics • Thatcherism • Trickle-down economics • Keynesian economics • Demand-side economics

8. To summate, why do we have mixed economies? • Difference between theory and practice. • Nations have to meet the demands of changing circumstances and therefore take the most useful features of the command and market economies • Economies always change • Economics is often determined by political leadership in the nation. • For example, there had been an ebb and flow of the amount of socialist features in the Canadian economy over years; this reflects the political ideology of the nation in power or the changing circumstances of the country.

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10. Debt Deficit Regulation Deregulation Crown corporations Privatization Progressive taxation Canada Terms

11. Nationalization versus Privatization • Nationalization state ownership and control of land and/or interests • Privatization the sale of government-controlled or –owned assets to the private sector

12. Crown Corporations (a form of nationalization) • A business enterprise owned by government and operated by a government management team • Eg) Canada Post • Crown corporations can be privatized: • Air Canada, Petro-Canada, Via Rail

13. Other examples of privatization: • Alberta • Registries • Liquor stores • AGT (the future became friendly) • Deregulation of natural gas and electricity

14. Why do governments privatize? • Ideology • money

16. Canada • To a large extent, Canada operates like a market economy. Market forces determine a lot of what happens in the Canadian economy. • Though this is the case, there are still elements of the Canadian system that have shades of a planned economy. • Elements of planned economy in Canada are: • Crown corporations  corporations that are owned by the government. At one time, Petro Canada, Via Rail, and Air Canada were entirely crown corporations. • Marketing Boards  control the marketing of a particular commodity. The Canadian Wheat Board is an example.

17. Foreign trade is often regulated more that in countries that are more market oriented. • Canada also has many social programs such as Medicare are needs to be paid for with higher taxes. • The extent to which the Canadian economy is controlled by the government ebbs and flows over time.

19. Debt, deficit and taxes • Deficit annual short fall in revenue • Debt accumulated deficits • Taxes • Progressive taxes—the higher wealth, the more you pay in taxes • Flat tax—everyone pays the same taxes Advantages? Disadvantages?

21. Welfare capitalism • Social-insurance • Transfer programs • Direct transfers • Indirect transfers

24. Social welfare system State monopoly Five-year plans Indicative planning Devaluation Restructuring “cradle-to-grave” system Sweden Terms

25. Sweden There are many sections of the Swedish economy that are privately owned. An example of this is agriculture. • There are state monopolies in Sweden, where the government owns and operates vital facilities such as railways, airlines, etc. • Sweden functions on a system of indicative planning. This is indirect government planning that uses targets as guidelines to coordinate private and public decisions.

26. Trade unions are very important in Sweden. The have a lot of power and make sure that workers are represented. • Sweden has mass social programs that provide a “cradle to the grave” social security system. It is the responsibility of government to look after all individuals.

27. Policy issues: • strengthen the economic incentives to work, so as to reduce welfare dependency and boost labour supply. • This will involve tax reductions, cuts in unemployment benefit and lower employers' unemployment insurance contributions.

37. Provision must be made for irregularities, human error and sin Galatians 6:1