Government Intervention in Business Essay Example | Topics and Well Written Essays - 2000 words

Government Intervention in Business - Essay Example The government as well makes sure that the welfare of the people is put as priority at all times, (at least in theory). This becomes evident with Government Owned and Controlled Corporations, wherein some governments enter into the manufacturing or distribution of fast moving consumer goods to post a more competitive price range for its people rather than the good produced by multinational corporations- this is very evident in third world countries especially in the fields of pharmaceutical corporations and basic commodities such as rice and oil. The government also subsidizes some semi government owned companies, or agencies which delivers basic commodities to the people. Example of which are in the fields of energy, transportation, food (rice). This is done, in order to avoid the monopoly of certain markets and private corporations which usually dictate the market price of goods that sometimes are higher than what the lower class could afford. Disadvantages of government intervention in business can be felt if the government no longer regulates but prevents business from doing its vital functions. Too much government control suffocates the economy. This can sometimes be evident through the different taxes, tariffs and trade regulations that governments post in order to protect, propagate or hinder a certain market. An example of which is that sometimes, As Stated 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". However, the economy of the United States is no where close to being a laissez-faire system. Based on studies, government spending and intervention in the economic sector has ballooned. 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(Ringer, 150). In the United States, one of the major areas in which the government intervenes is in the agricultural sector of the economy. The government has three ways it can intervene and help its producers. These ways include price policies, direct payments, and input policies. Price policies have the largest effect on producers. Tariffs, quotas, and taxes are just a few examples of price policies. While these policies bring revenue into the government, in the end they hurt consumers. Each of these policies raise the prices of both imported and native goods. They are designed to help stabilize prices and give the native producers a chance to compete with foreign goods. Under the doctrine of laissez-faire, the government would not interfere with prices and the native producers would be forced to lower their prices, giving the nation's citizens a better deal in the market. The use of taxes is one of the government's favorite ways to make its presence known in the economy. While this method seems blatantly obvious, many of the ways the government uses the money collected by taxation is not. Some of the money it takes is used to fund other programs designed to "protect" consumers and to "create" jobs. Because of