Questions & Answers
1. Why does government intervention in the economy appear necessary?
“Government is best that governs least” is the statement, which is popular among the supporters of the minimalist-government view or laissez-faire economy. However, to some extent government intervention in the economy is what a healthy society really needs, especially when the situation of market failure occurs. Indeed, there are certain areas where “an invisible hand of market” alone won’t do its best.
Firstly, the marketplace can’t provide the society with public goods (also known as collective goods), since it is practically impossible to exclude non-paying consumers from Continue reading...