Every Economy Is a Mixed Economy

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I have replied to Nick in this thread, deploring what tends to get ignored or neglected in formalistic-stereotypal economics: the fact that economies are first and foremost social and political events:

The points you are making in your above comment are very important. One of the biggest dangers in development economics is compartmentalisation. Every country is an individual. Stereotyping is the beginning and the texture of ideology, and ideology is misrepresentation. Paying attention to details and specific circumstance is of the utmost significance in devising sensible policies. But somehow we humans feel attracted to ideal types and overly categorical dichotomies as between puristic conceptions of "free markets" and "socialism". Every economy is a mixed economy, with elements of a spontaneous nature and elements of political intervention. As you rightly argue "the political and institutional aspects" are at least as important as specific (types of, say industrial) policies, and I would suggest that without a good grasp of concrete politics and institutions one is bound to fail to understand the character and individuality of a country, i.e. the conditions for success and failure specific to it.

See also Free Trade and Imaginary Markets