Government Intervention

1. Arguments for Government Intervention to improve equality

1.1. Fairness.

1.2. Inherited wealth.

1.3. Diminishing marginal returns to income.

1.4. Rawls Social Contract.

2. Arguments for Government Intervention

2.1. Market Failure

2.2. Macroeconomic intervention

2.3. Greater Equality

3. Subsidies

3.1. The government gives certain sectors subsidies to produce goods. The government gives subsidies to lower prices on goods so exports increase.

4. Wages

4.1. Governments can create a minimum wage for all workers. The government determines that anything lower then the minimum wage is not enough for a person to live on.

5. Market Interventions

5.1. Appropriate interventions are thus indirect in nature and have three general aims:

6. · to improve market infrastructure · to improve information · to improve institutional infrastructure.

7. Disaster Assistance

8. The biggest advantage of government intervention is preparing for disaster situations, with the ability to deploy manpower and resources immediately.

9. Government Intervention to Overcome Market Failure

9.1. Public Goods.

9.2. Merit Goods / Positive Externalities.

9.3. Negative Externalities.

9.4. Regulation of Monopoly Power.

10. Arguments against Government Intervention

10.1. Personal Freedom.

10.2. Market is best at deciding how and when to produce.

10.3. Governments liable to make the wrong decisions

11. Tariffs put a tax on imported goods to make domestic products more competitive.

12. Tariffs

13. Taxes

14. A government can levy taxes on its citizens in order to create social programs, build infrastructure and create a military.

15. Environmental Interventions

16. Government intervenes to protect "open access resources" such as water and air.

17. Social Interventions

18. Government provides a number of programs to aid individuals in transition such as Social Security, unemployment insurance and health insurance programs