Solution of 3Hs in Market, Command&Mixed

• The solution of three "Hs" in Market, Command and Mixed Economy:
• Capitalist Economy/Market Economy: The first method is to solve these problems through market or price mechanism. That is, what goods are to be produced and what quantities, which methods for production are to be employeed for the productivity of goods and how the output is to be distributed, should be decided by the free play of the forces of demand and supply. In such an economic system, capital and other means of production are the private property of the individual and private enterpreneurs who undertake the work of production. Consumers have freedom to buy the goods they want. In such a system, those goods are produced mere for which there is greater demand and those goods are produced less for which there is less demand. The demand and supply of various goods determine the prices and quantities produced of various goods. This method of solving these capital problems through market mechanism is used by a free-enterprise capitalist economy.
• Command Economy: In this method, t'd solvition of upshots basic problems is not achieved through the free working of demand and supply of goods and factors. But to solve these problems which has been called by several names, such as planning commission, planning ministry or planning board.
What goods to be produced, and what quantities and how they be produced, how should they be distributed among the population and how much should be invested to bring about economic growth are all decide by the central planning authority. These type of solutions had been adopted by former communist countries such as Soviet Russia, Cuba, Poland, China, etc.
• Mixed Economy: The government interferes in in the working of the capitalist economy through several policy instruments because it has now been realised that the unfettered functioning of the market mechanism or the forces of demand and supply, results in wide economic fluctuation price instability and unemployment and lack of economic growth. In other words, with the free working or the market mechanism or the forces of demand and supply, the achievement of the objectives of economic stability, full employment and rapid economic growth is not possible. During 1929-33, when all the capitalist countries, there occured a great depression which resulted in wide spread unemployment among the population them famous economist John Maynard Keynes laid on the adoption of appropriate fiscal and monetary policy so as to achieve the objective of full employment. Therefore, economist call these so-called capitalist countries as mixed capitalist enterprise system or simply mixed economy. It is worth noting here that the nature of the mixed economy of Bangladesh is different from that as the mixed economics of America and England. In Bangladesh, Government not only regulates and controls the private enterprise and market mechanism through the monetary and fiscal measures and direct controls but also itself undertake the work of production. Various industries and power production have been set up in the public sector.