<P> In general, a mixed economy is characterized by a pragmatic division of the means of production between private ownership and public ownership . Profit - seeking enterprise and the accumulation of capital remain the fundamental driving force behind economic activity, while markets are subject to varying degrees of regulatory control . Unlike a free - market economy, the government wields indirect macroeconomic influence over the economy through fiscal and monetary policies designed to counteract capitalism's history of boom / bust cycles, unemployment, and growing income and wealth disparities, along with playing a role in interventions and civic institutions that promote social welfare . Subsequently, many mixed economies have expanded in scope to include a role for indicative economic planning or large public enterprise sectors . Development of the public sector in mixed economies has tended to concentrate across universal civic requirements, such as health services, mass transportation, physical infrastructure, and management of public lands and resources . </P> <P> In reference to post-war Western and Northern European economic models, as championed by Christian democrats and social democrats, the mixed economy is defined as a form of capitalism where most industries are privately owned with only a minority of public utilities and essential services under public ownership . In the post-war era, European social democracy became associated with this economic model . </P> <P> Economies ranging from the United States to Cuba have been catalogued as mixed economies . The term is also used to describe the economies of countries which are referred to as welfare states, such as the Nordic countries . Governments in mixed economies often provide environmental protection, maintenance of employment standards, a standardized welfare system, and maintenance of competition . </P> <P> As an economic ideal, mixed economies are supported by people of various political persuasions, typically centre - left and centre - right, such as social democrats or Christian Democrats . Supporters view mixed economies as a compromise between state socialism and free - market capitalism that is superior in net effect to either of those . </P>

The american economy is called a mixed system because
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