It is in my opinion that government intervention, though necessary in certain circumstances, should be largely limited to its role in protecting property rights, upholding the rule of law, and maintaining the value of the currency. The market itself is best at deciding how and when to manufacture its goods and it is unnecessary for the government to step in to try and improve the efficiency of the economy. One should look to the entrepreneurial creativity of millions who are willing to risk their own resources and reputations in order to progress our country. Before you place your trust in such entrepreneurs however, you should gain an understanding of the differences between political and market entrepreneurship as well as how government subsidies can undermine our economy in such a deceitful manner. Before one forms an opinion on entrepreneurship, or on the big business tycoons who end up being dubbed as “robber barons,” you should understand the difference between the two types of entrepreneurs. You have the political entrepreneurs, who fit the classic mold of a robber baron, and who are commonly corrupt in the way they manage business. They take government aid, also known as a subsidy in this case, and have a propensity to waste the money, as it wasn’t theirs to begin with. They are not concerned with making a sound product, but with making as much profit as possible and getting the job done quickly, though not always efficiently. Furthermore, you have the market entrepreneurs who take little to no government aid and conduct business in an efficient manner. They are calculated risk takers who may take smaller steps towards their goal, but in doing this they learn how to do the work more efficiently, both time and cost wise. We... ... middle of paper ... ...the higher-income people will pay for it at full market price, the government intervenes once again upon the economy. Once one realizes that not all entrepreneurs are robber barons, but can be charitable, ambitious citizens, you will be better able to conclude what your opinion is on entrepreneurship as a whole. Whether you believe in the government jump-starting the economy with subsidies or in the power of the individual to compete in the market for themselves, it should be duly noted that the power of entrepreneurship is vast and full of determination. It should also be recognized that bailouts and subsidies can be detrimental if managed improperly. Government favoritism is not equitable to the smaller, private businesses who very well may be providing the superior merchandise but aren’t as publicized as the business that is receiving the subsidies.
Market entrepreneurs were known as risk-takers and charitable people. Many of them donated money to needy,
Free enterprise is a form of economy in which the government takes minimal control through regulation. In this form of economy the price and production of goods is decided by the consumers and producers and their wants and needs, and by considering how all of these can be met in the face of scarcity. While scarcity defines resources that are available against infinite wants and needs, it can also be used to describe the fact that future products do not yet exists and new markets have not yet been explored, and in order for consumers’ needs and wants to be met, entrepreneurs must invent new products and open new fields of study. Arguably, one of the most influential entrepreneurs in American history was Andrew
The politics of entrepreneurship that suffuses US elections is integral to the philosophy of the American dream, thus the notion that the highest office in the land is bestowed to the greatest entrepreneur seems quite apt.
In a laissez faire market, the market does not self-correct to prevent the economy from sliding into a deep recession as its proponents suggested. In fact, if the market is left to its own accord, during difficult times the economy will further weaken because manufactures will cut production, which will lead to higher unemployment, which will then lead to less disposable income, which will lead to a drop in consumer consumption, which will lead to a drop in sales and eventually another cut back in manufacturing. This is known as the Multiplier They are constantly advocating for less government in the market place. But to me it appears as if the 1% with 99% of all the money, are simply advocating for themselves. Without government interference they are free to create monopolies, gouge consumers, and sell products that are hazardous to the public.
In my opinion, government intervention in the private and public sector is a terrible idea because it stifles growth, innovation, and can create unintended consequences in the economy. I believe the economy performs best when the government intervenes as little as possible.
There are some positive effects government intervention could produce. These pros are, in fact, few, and questionable, at that. Take for instance, the situation with Microsoft. The government is sticking its nose in where it doesn't belong. Let's try and get passed that point for a moment and examine the good that could come out of government intervention.
Should our economy be run by a doctrine that was made popular by a group of French writers called physiocrats in the mid-1700s? This doctrine is called laissez-faire and it literally means to let or allow to do(The Family Education Network). It is a theory of economic policy which states that government generally should not interfere with decisions made in an open competitive market. These decisions include policies such as setting prices and wages. According to the doctrine of laissez-faire, workers are most productive and a nation's economy functions most efficiently when people can pursue their own economic interest freely. The economy of the United States is no where close to being a laissez-faire system. In fact, government spending and intervention in the economic sector has ballooned. According to the Federal Money Retriever, in 1998 alone, the government spent over $37,733,526,000 in agricultural commodities, loans, marketing, and stabilization. The role of government has grown to a point where the benefits of government intervention are far outweighed by the negative effects on the economy as a whole.
In micro-economics market failure is characterized by resource misallocation and subsequent Pareto inefficiency. Just as the invisible hand falters, so is the case that the unregulated markets are incapable of solving all economic problems. In laissez-faire economy, market models mainly monopolistic, perfect competition and oligopoly are expected to efficiently allocate resources for the “welfare benefit” of the society. However individualistic and selfish private interests divert the public benefits thereby prompting government intervention to correct the imperfection which may lead to disastrous economic impact. Although corrective intervention policies by government may not necessarily address the underlying imperfection induced by private sector inefficiency, it still becomes a necessary remedy to benefit the wider public if private entities are not allocating efficiency. Furthermore, as the largest contributor of the Gross Domestic Product, poor and untimely corrective measures could signal the failure of both the private and public interests. Effectiveness of the policies and mechanisms designed by the state in market intervention are fundamental in correcting any perceived market failure. Intervention however does not guarantee effective remedies expected by the economy and could lead to deeper market failures if the regulations “crowd out” the private sector but is the viable approach to address market failure.
Any government with total control is worth being feared and having a group of individuals who go against their government. With complete control, a government is capable of committing acts against their citizens, which can be perceived as “something good” from the government’s point of view. In 1984 by George Orwell, and “Harrison Bergeron”, by Kurt Vonnegut, the main characters, Winston and Harrison, feel oppressed by the government's acts and events, try to overthrow their government, and go through a realization of hopelessness and defeat.
The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.
Around the world, governments, mostly intervenes in the market in order to accomplish their policy objectives. The government’s policy objectives or goals could be related to economics, ranging from stabilization of prices, export promoting, encourage equal distributions for income and commodity protection. The examples as per above proves that government intervention is not only limited to economic effects also influences the society. There are two (2) types of usually regulated government interventions, which are automatic and discretionary. Automatic can ale defined as intervention which is based on rules and regulations. On the other side, government interventions which are discretionary mostly targets stopping, suspension or limitation of a certain contract market.
One thing that seems to fuel the division within existing political parties and the emergence of new parties is the question of whether we need more or less government intervention in our day to day lives. There are those that argue in favor of a small government, capitalist approach, while others maintain that Americans have been babied with so much government intervention that they are unable to get out there and pull themselves up by their own bootstraps. Then you have those on complete opposite ends of the spectrum that feel that the people should govern themselves and that government intervention is unnecessary. Polarized by those who feel that the government should run the show. So who decides the what, how and for whom, of our lives?
The first question posed is that of the relationship between the political and the economic market and what it is. The second is how much of a role government should play in the market (Gilpin,1987).The third question is whether the involvement of the government in the market will encourage or hinder economic growth. Lastly, how the world economic market affects the economies of those that are less developed (Gilpin,1987).
"Entrepreneurs who start and build new businesses are more celebrated than studied. They embody, in the popular imagination and in the eyes of some scholars, the virtues of "boldness, ingenuity, leadership, persistence and determination." Policymakers see them as a crucial source of employment and productivity growth. Yet our systematic knowledge of how entrepreneurs start and grow their businesses is limited. The activity does not occupy a prominent place in the study of business and economics.
Entrepreneurship is a key driver of our economy, wealth and the majority of jobs are created through entrepreneurship, and it also helps and educates people in terms of growth and realizing opportunities (Nolan, 2003). Entrepreneurship is also seen as one of the important contributing factor to local development (Nolan, 2003).