Should governments today play a greater role in their economies?Should governments today play a greater role in their economies?

Expert Answers
vdavenport eNotes educator| Certified Educator

This is certainly a question that simply put can be restated: more government control or more individual freedom of choice.  The more direct control a government, at any level, has on the economy it is able to directly impact the "winners and losers" within the economy.  If the government leadership favors your business, you will be more likely to have laws and regulations written that can improve your chances of becomine successful.  This is a major reason why lobbyists and that industry spend more every day on lobbying members of Congress than a Congressman makes in a year.

When a business is more heavily regulated, the cost of doing business will go up for the business and that cost will be passed along to the consumer.  For example, OSHA regulations require workers to be certified in something to make them a better employee or a safer employee.  The cost of the worker going to that certification training and the cost of the training itself, including the lost time of the employee working, are added up by the business and put into new jobs that the employee will do in the future.  This is done to help with the bottom line (profit) of the company because if the company is not going to be able to have a profit that allows the owners to remain in business, then the business will close. Another example of how regulation by government can impact business, during a speech given earlier this year, our President stated that if a company wanted to open a new coal mine, he would not oppose the idea because the regulations that will be put own such a business would make it impossible to be profitable.  An example of eciding "winners and losers" through government control and action, not the marketplace itself. 

Tax breaks is an area of large dispute, especially at local and state levels.  Do these tax breaks and incentives for certain businesses to come to a city or state create new tax revenue and new jobs enough to offset the breaks in paying taxes that the company has been able to acquire by the government.

Government must be involved in the economy but the amount of control is directly related to the level of choice that the people have within that economy.  The proper role of government involvement, in my opinion, is the strongly look for the best methods of making sure the consumer is protected from fraud and dangerous business practices and the workers are given a safe environment to make a living in.  When government moves beyond those areas, creating an incentive for business to set up "differing roads to success for different businesses" then the government has gone too far. 

pohnpei397 eNotes educator| Certified Educator

This is, of course, only a matter of opinion.  In addition, the answer would vary a lot because different governments play very different roles in their economy.

In the United States, many people think that the government should play a larger role.  They say that there should be more government regulations to ensure that the markets do not get us into trouble again.  This is what the financial regulation bill that is before Congress right now wants to do.

Others, however, argue that it was government regulation that got us into this trouble in the first place.  They say that if the government would have left the market alone the banks would not have made so many dumb loans.  They say the government pushed the banks to loan to more people and that's why they made so many bad loans.

People who know way more about this than I do disagree with one another.  No one really knows the answer.

Ashley Kannan eNotes educator| Certified Educator

The answer to this is dependent on personal and political beliefs.  I think that the current economic crisis might also play a role in how individuals perceive this answer.  Certainly, there is a line of logic that suggests greater government intervention in the affairs of the economy helps to weaken the strength and resolve of the market.  At the same time, there is an argument to government being able to help out the individuals and institutions who have become casualties to the marketplace.  Political reality dictates that leaders who say during an economically trying time, "Let the market work itself out," do not get elected for additional terms.  At the same time, a very compelling argument can be made that governments are needed to enact regulation and legislation to ensure that individuals do not manipulate the market for their own benefit, causing the economic crises that plague individuals.

besure77 eNotes educator| Certified Educator

It is strictly a matter of opinion and there are pros and cons to a greater government controlled economy-I guess it just depends on how you look at it. I think it has a lot to do with social responsibility. Should governments be more responsible for the economy or should it depend more on the private sector? This argument can go both ways.

If government played a bigger role in the economy some would say that the United States would not be in the economical position it is in right now.

On the flip side, many people who are against a more government controlled economy think that if the government had more control then the rich would get richer and the poor would get poorer.

krishna-agrawala | Student

Most of the countries in the world, including the ones that claim to follow a capitalistic or free economic system find it it in the interest of the people and the country to play increasingly greater role in controlling and managing many aspects of the economy. For example, all countries find it necessary to have laws to regulate the conduct of joint stock companies, banks and other financial institutions, conduct of stock exchanges and commodity exchanges, and multitude of other economic activities. Then there are laws to prevent monopolistic practices and for consumer protection of various types.

Government influences prices of goods and services by differential taxes and by price floors and ceilings. Most common among these rare minimum wages act. Then government may give subsidies to some of the economic activities. For example, USA gives incentives to farmers to grow or not grow certain crops.

Also governments may directly own and operate certain means of production. For example, most of the road infrastructure in most of the countries is owned and operated by governments. Other economic activities commonly owned and managed by governments include mail service and railways.

Thus irrespective of what common people may think and argue, the people in charge of managing affairs of countries do accept the need for greater government role in economies and act accordingly. However there are some countries where the government role was very high in the past, but now they are engaged in reducing the government involvement.

lindsey117 | Student

I guess a better way of putting it is what are the pro's and cons of them being more involved? I do believe that governments should have a greater role in regulating economies and I am interested in just opinions, they will help me further advance my own view on the situation.