Welfare Capitalism Essay

1815 words - 7 pages

Welfare Capitalism. Well & Fair for Everyone.What extent of government regulation allows the citizens of the country the maximum amount of liberty? How much should the government intervene to protect the consumer? These are questions that every society must answer when developing their economic system. And for each question there are multiple answers. Some believe that little to no regulation is necessary, that the market place has natural laws of its own. Others disagree, saying that it is the government's duty to protect the individual from the evils of the free market. Both solutions have definite attributes. The first answer describes a system of capitalism, or lassiez-faire. Adam Smith, the philosopher credited with the development of this ideology, argued that the actions of each individual, motivated by self-interest, would work together for the good of society. Smith said that in order for this to work, the marketplace had to be competitive. If the government were to implement regulations, it would counteract the natural forces of the market place and cause unfair restrictions. In theory this form of capitalism is highly productive, but in practice is seems that it does not benefit all, as Smith predicted. Under this type of economic system, it is often the worker who falls victim to circumstances such as exploitation and poverty. Lassiez-faire permits the infringement upon an individual's liberty by other citizens. Although Adam Smith would describe these situations as part of the natural business cycle, modern society has reached a point where such abuses are no longer tolerable. It is at this time that the government must step in, and provide regulations that protect the individual. Once the government begins intervening though, it is easy to become overzealous and assume total regulatory control. Such an idea is called central planning, when the government controls the entire economy. Karl Marx was among the first to fully develop this idea. Marx argued that a country's industries should be nationalized, eliminating private property, competition, and the profit motive. With these gone, Marx said that the citizens would be free from exploitation and greed and would therefore be more content than ever before. Thus, the individual would be protected from the evils of capitalism. Again, in theory this may be effective, but in practice does not create the freedom that Marx desired. When the government determines income distribution and chooses employment, workers may become unmotivated, and their productivity will therefore decline. Since everything is for the good of the state, citizens are forced to conform and individual freedoms are restricted. Central planning creates the infringement upon an individual's liberties by the government. It is now obvious that government must step back from the economy. It seems that Marx misinterpreted human nature, and in doing so his entire philosophy crumbled. It can be seen then, that neither of...

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