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Technically, all the economies of the world are mixed: it is just the balance
elements between market and planned elements that alters. Some countries are
nearer to command economies, while others are closer to free market
economies. So, for example, Hong Kong has some state - controlled industry,
while Cuba has some privately owned and controlled firms.
The aim of mixed economies is to avoid the disadvantages of both systems
while enjoying the benefits that they both offer. So, in a mixed economy the
government and the private sector interact in solving economic problems. The
state controls the share of the output through taxation and transfer payments
and intervenes to supply essential items such as health, education and defence,
while private firms produce cars, furniture, electrical items and similar, less
essential products.
The UK is a mixed economy: some services are provided by the state,
while a range of privately owned businesses offer other goods and services.
The Conservative government under Margaret Thatcher switched many
businesses from being state - owned and controlled to being privately owned as
part of its privatization programme. This has taken the UK economy further
away from the planned system.