“Government should not interfere in the working of the market mechanism i.e. invisible hand of the market”. Do you agree?
In most instances, I would agree with the statement “government should not interfere in the working of the market mechanism i.e. invisible hand of the market.” The most efficient operation of the economy is when market forces, without regulation, are freely able to operate. Supply and demand will then determine market price. Since this represents the most efficient operation of the market, it should exist as much as possible. However, there are instances where I believe the government should intervene in our economy. There some services we must have. For example, water, natural gas, and electricity are examples. Since it costs so much to set up these utilities, there isn’t going to be competing companies providing these services. As a result, consumers would be at the mercy of the utilities to charge reasonable prices. With government regulation, charging reasonable prices is more likely to occur. Another time when government should intervene in our economy is during war. Without government intervention in both world wars, prices could have skyrocketed. This would have hurt the average American significantly. Therefore, depending on circumstances, there are times the government should intervene in the economy during war. The final time I feel government intervention should occur is when businesses are doing things that hurt society and consumers while benefitting themselves. There should be laws that protect consumers, workers, and the public from unfair business activities. Before the Progressive Era workers were getting hurt due to unsafe working conditions. Companies had no incentive to have safer conditions or to help those who were injured. Kids were often working very long hours instead of going to school. Food was often mislabeled or was unsafe to eat. The government stepped in with the passage of laws to protect people from unreasonable business activities. There have been other times in our history when government intervention has also occurred. Thus, while I feel the government should generally stay out of economy, there are times when I feel government action is justified.