Is a social democracy and mixed economy the best form of government?
Yes. Distribution of income is more equal in social democracy’s. “Marginal propensity to spend” is larger in smaller earners then larger earners. That means that in poorer people spend a higher percentage of there earnings then rich people. This means that hard free market countrys (I.e. America) have a unequal distribution of income, and so the wealth accumulates with the rich instead of being injected back into the circular flow of money. Also, benefit systems and high taxes mixed with minimum wage (As in socialist countrys) provide a blanket for unemployed peoples so that they dont become homeless (And perminatly leave the workforce) and yet the still have an incentive to find a job (As minimum wage is manipulated to be higher then benefits).
