Stormin Norman
24th June 2002, 22:08
Here is a brief description of how I think the government should get involved in the free market.
When 'the book' is mentioned, I am speaking of a microeconomics book that I used a couple semesters ago. Originally, this was an answer to a question posed by the professor of that class.
Lockean liberalism, also classic liberalism, with its root word libertas, meaning freedom, is the basis for our political system. Locke stated, and Jefferson agreed, that men are born with inherent rights. These being, life, liberty, and pursuit of property, the right to the fruit of our labors, and the right to determine our own motivations. Locke believed that government was formed in order to protect these rights from certain rouge elements that might not live by this code of ethic. When government fails to protect these rights or utilizes its monopoly of power to oppress the people, it is within the people’s right to dissolve the government through violent means if necessary. Men gave government the right to legislate and enforce the laws, provide for the national defense, and levy taxes. Government should not get involved with the market mechanism. We should look at market failures individually and decide what government’s role, if any is required.
First, economies suffer from severe business fluctuations, a.k.a the boom and bust cycle. Today we live under a government umbrella that protects us from this market reality. We reap the rewards brought about by the progressive era and continued through Johnson’s great society administration. These newly created entitlement programs invite further government intervention into our lives. Is a population that is dependent on the government in a dangerous position? One only has to look to the former Soviet Union to see how dangerous this can be.
Second, the market distributes wealth unequally. I only ask whether or not this is truly a market failure. Shouldn’t our pay be based on our merits and ability to produce? Furthermore, who gives another man the right to live by my utility and my competence? Is it in humanities best interest to unfairly compensate men of lesser ability and therefore discourage men of great ability. Welfare programs often hurt the ones they seek to protect as people fail to realize their full potential. This sort of compensation often includes income caps that insure that people remain in their current positions in order to get their subsidy. The most unfortunate result of welfarism is the hate and resentment that it breeds among fellow men.
In continuation, the book notes that monopolies allocate resources inefficiently. Does this do any worse than central planning? The book also notes that large firms can embark on research and development that might not be accomplished under perfect competition. The advances in technology, which have enhanced our lives, as a result, far outweigh monopolies ability to charge higher prices. Moreover, I don’t think any industry can be effectively monopolized unless it is done by government decree. Monopolistic industries are constantly under the threat of being bought out by larger firms or a conglomeration of smaller firms.
Its also a fact that markets do not provide public goods. These goods include, police and fire protection, military, highway systems, and arguably education. In fact, this is true. This is one of the reasons governments are implemented by men. It is well within the scope of government to create these programs and charge fair compensation for their use.
Finally, it is important to discuss the problem of externalities caused by market failure. We’ll use the example in the book of air and water pollution. Clean air and clean water are also public goods that benefit everyone. It is in the public’s interest and the responsibility of the government to insure the safety of these resources. An effective tax on the level of emissions from industry, as well as certain direct controls are necessary. A firm who knowingly evades the regulations and the level of toxicity is a certain danger, criminal law enforcement is necessary. If people die as a result then the death penalty should be brought down against the individuals who perpetrated the crime.
In conclusion, the government should stay out of the market unless it is absolutely necessary for the public welfare. Government should only be used to insure the rights that Locke and those who live under his principle know to be true. When these rights are threatened either through ignorance, negligence, benevolence, or malicious actions it is necessary for government intervention.
When 'the book' is mentioned, I am speaking of a microeconomics book that I used a couple semesters ago. Originally, this was an answer to a question posed by the professor of that class.
Lockean liberalism, also classic liberalism, with its root word libertas, meaning freedom, is the basis for our political system. Locke stated, and Jefferson agreed, that men are born with inherent rights. These being, life, liberty, and pursuit of property, the right to the fruit of our labors, and the right to determine our own motivations. Locke believed that government was formed in order to protect these rights from certain rouge elements that might not live by this code of ethic. When government fails to protect these rights or utilizes its monopoly of power to oppress the people, it is within the people’s right to dissolve the government through violent means if necessary. Men gave government the right to legislate and enforce the laws, provide for the national defense, and levy taxes. Government should not get involved with the market mechanism. We should look at market failures individually and decide what government’s role, if any is required.
First, economies suffer from severe business fluctuations, a.k.a the boom and bust cycle. Today we live under a government umbrella that protects us from this market reality. We reap the rewards brought about by the progressive era and continued through Johnson’s great society administration. These newly created entitlement programs invite further government intervention into our lives. Is a population that is dependent on the government in a dangerous position? One only has to look to the former Soviet Union to see how dangerous this can be.
Second, the market distributes wealth unequally. I only ask whether or not this is truly a market failure. Shouldn’t our pay be based on our merits and ability to produce? Furthermore, who gives another man the right to live by my utility and my competence? Is it in humanities best interest to unfairly compensate men of lesser ability and therefore discourage men of great ability. Welfare programs often hurt the ones they seek to protect as people fail to realize their full potential. This sort of compensation often includes income caps that insure that people remain in their current positions in order to get their subsidy. The most unfortunate result of welfarism is the hate and resentment that it breeds among fellow men.
In continuation, the book notes that monopolies allocate resources inefficiently. Does this do any worse than central planning? The book also notes that large firms can embark on research and development that might not be accomplished under perfect competition. The advances in technology, which have enhanced our lives, as a result, far outweigh monopolies ability to charge higher prices. Moreover, I don’t think any industry can be effectively monopolized unless it is done by government decree. Monopolistic industries are constantly under the threat of being bought out by larger firms or a conglomeration of smaller firms.
Its also a fact that markets do not provide public goods. These goods include, police and fire protection, military, highway systems, and arguably education. In fact, this is true. This is one of the reasons governments are implemented by men. It is well within the scope of government to create these programs and charge fair compensation for their use.
Finally, it is important to discuss the problem of externalities caused by market failure. We’ll use the example in the book of air and water pollution. Clean air and clean water are also public goods that benefit everyone. It is in the public’s interest and the responsibility of the government to insure the safety of these resources. An effective tax on the level of emissions from industry, as well as certain direct controls are necessary. A firm who knowingly evades the regulations and the level of toxicity is a certain danger, criminal law enforcement is necessary. If people die as a result then the death penalty should be brought down against the individuals who perpetrated the crime.
In conclusion, the government should stay out of the market unless it is absolutely necessary for the public welfare. Government should only be used to insure the rights that Locke and those who live under his principle know to be true. When these rights are threatened either through ignorance, negligence, benevolence, or malicious actions it is necessary for government intervention.