Which economic system combines individual business ownership with state ownership of essential services?

The correct answer is democratic socialism. This economic system is characterized by the coexistence of private ownership of businesses alongside government ownership or control of essential services, such as healthcare, education, and public transportation. In democratic socialism, the aim is to balance the benefits of capitalism—such as innovation and efficiency—with the social welfare provided by state intervention. This system seeks to ensure that essential services are available to everyone, promoting equality and reducing disparities within society.

Democratic socialism promotes policies that are aligned with democratic governance while advocating for social ownership or regulation of key resources to ensure that the basic needs of the population are met. This approach allows for market mechanisms to operate but incorporates a strong role for the government in ensuring that social justice is upheld.

In contrast, communism advocates for the complete abolition of private ownership, leading to collective ownership of all means of production without a market system, which goes beyond the mixed approach found in democratic socialism. Capitalism emphasizes private ownership and minimal government intervention in the economy, focusing primarily on individual profit rather than collective welfare. Mercantilism, an economic theory prevalent from the 16th to the 18th century, is centered around state control of the economy to bolster national power primarily through trade. Therefore, the defining characteristics of