Last week in my Business Law class, we had to read this newspaper article our professor handed out to us; it is called Free-Market Economist Changes Tune. The gist of the article is basically about how the government needs to intervene in the free market system and impose regulations. To quote from the author, Richard Posner "a modern economy needs effective, comprehensive government regulation." How will the government know if the regulation is effective? The only way I can think of is by trial and error. Or maybe the government will get input from the companies within the market and go off the feedback.
From what I remember in class, it is not always best that the government intervenes in the market, and makes all these regulations or restrictions. Yes sometimes the market benefits from the restrictions, but from our book, it says that "restriction on trade wastes resources and creates lost gains from trade." So, for example, putting a tariff on trade raises the price and decreases the quantity bought.
On the other hand, a plus to having regulations and restrictions is that it can limit, say pollution companies put out into our world.Or, allowing companies to buy patents on their products. Because patents give room for more innovation to take place.
What would the market be like without government regulations or restrictions?
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The government would be nonexistent or useless without it's intervention in the market system. On the other hand total government intervention would be the existence of a totalitarian government which has total control of the people can be harmful to any country. Socialism is a sort of oligarchy that concentrates the power, wealth and resources to a small group of society that controls the capital and unequal distribution to the rest of society. This plays off of the Communistic style of governing as well as the once Soviet Union. It eliminated the need for monopolies, unequal distribution of goods, unemployment, and exploitation of talents. This would not work here in America no matter how many government officials try to copy other forms of government systems as we are today leaning toward a socialistic society. Government regulating citizens lives and putting restrictions on things is not a way to run a free society as we live in. This is because we need monopolies, exploitation of resources and talents to better our society and allow free trade, otherwise this would be the Soviet United States instead of America.
ReplyDeleteSunny make a good point. I was recently doing some philosophy homework and happened across a newer, but still deceased philosopher, Bernard Williams. He makes a strong argument against Utilitarianism, which we learned about last week. In practice the theory sounds great, and just. Let us maximize everyone's happiness.. That part is spot on, as is the goal of political science. However, the problem with Utilitarianism is that it attempts to reduce every situation and action into a "This or That" kind of thing. There are plenty of dilemmas in this theory, but the point is, we cannot control the free will of people. That is why communism has always faltered. The communistic theory is basically utilitarianism by absolute force. It would govern our actions to the point of using a calculus type of effect to determine an outcome in all situations.
ReplyDeleteAnd that's where it fails.
You CANNOT use math to determine the mind of a human! We are all too damn crazy.
And provided we did, there would be a society of people without a will, soul, mind or individuality, which is, in essence, a large part of what communism did and has been seen to fail.
I totally agree with both ShawnHutto and Sunny. The government cannot regulate and put restrictions on stuff to run a free society. That's what stuck out most to me. Also, there are no, none WhatSoEver mathematical equations or problems that Can determine the mind of a human being! And we are all very different. I don't know if we are All crazy, maybe to some extent. Plus, I really don't see how and why the government can seriously think they can run a free people. I thought one of their duties is to look out For the people.
ReplyDeleteMaybe I would have totally agreed with you (Sunny) if I had commented on your post before learning the material in chapter 18. A little bid of Rawls Maximinum Principles and Utilitrarianim would not hurt society. Sometimes and usually all the time we, need a government. I acknowledge the benefits that come from exploitation and monopoly. Through the work of the invisible, many technological and scientific advances had been made like vaccines, medicine, and other forms of technology that many take for granted. Monopolies are one way to fund science, but there are other ways too. Governments could subsidize science and buy patents, but I think Adam Smith is right about westerners, that we need incentives, and the invisible hand is the most powerful driver in the western economy. No, I probably wouldn't have agreed with you even before learning about Positive and Normative Economics. Like Dr. Hampton said we are the fortunate ones, the genetic lotteries. I would bet that you would beg to differ on your argument if you were the one being raped and pillaged(Exploited). There is no such thing as a free lunch; many people have died in the wars and bloodshed helped to create technology and science, there are many people that go hungry because someone wanted to hoard wealth, there tends to be a cycle, and for every high there is a low. I agree with Nozick theory of Justice, egalitarian in a way, but I believe the government should intervene when someone is hoarding wealth. Why? because I agree with the Utilitarian view and the Maxinum Principal. I would believe that a person would have low marginal value after so much wealth, but I guess society has proven me wrong. I do respect hard work and a free market, and when 1% of the population owns the majority of the wealth and people are hungry, they need to be in the Psychiatric institute, not in business. Exploiting the resources usually ends up destroying the habitat; therefore destroying your home. Yeah, we can always criticize the government, but I am grateful for having a government like the United Stated and my Tribe. I am not saying they are perfect, but they do some good things that many of us take for granted. Principle of Economics Governments could improve markets, (Mankiw). I just hope Obama does not cut the space program. Because if mainstream society were to agree with you, than we best be looking for a new planet to exploit, because we will destroy our homes pretty quick at this rate, pollutions from development and the possibility of a nuclear blowout, these are what come with the package. Just hope our weapons are the strongest, so we don't become exploited ourselves when we encounter the aliens. These arguments are deeply tied into Philosophy and Ethics.I knew this class had to teach philosophy and ethics somewhere down the road. Like I said in the opening paragraph, Maybe I would have totally agreed with you if I had commented on your post before learning the material in chapter 18.We are both right and both wrong at the same time, this is what happens when ethics and philosophy get applied. America is not too bad, at least the leaders stuck some values into the law, many are very similar to the Native North American values. America could be better, but it could also be worse. I am more than grateful for the material life I live in, but the same time there is too much unethical activities in this county including distribution of wealth and exploitation. I guess there is a tragedy of the commons here in America because the ideas of individualism, capitalism, and attitude of the Frontiersman. So we better hope Obama does not cut the space program. Amway’s, wealth is usually distributed here the U.S. I would bet that you and I both receive a fair share of it even though we are not aware of it. Where I come from, people give almost all their wealth away, once a year. Many American value individualism and must be forced to share. Public transportation, roads, and tuition grants all come from government-enforced taxes, so I believe I should end my argument here.
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