Question

What is the appropriate role of government in a modern capitalist economy? Connect it to the current situation in the United States (the pandemic and the economic crisis it has precipitated).

Answer 1

The appropriate role of the government is of moderator & regulator in the modern capitalistic economy. By, saying this, it means that government should act as a moderator in normal business circumstances, ensuring free and fair competition by passing laws and helping consumers and labors to get their rights protected. Though, the government does not intervene in day to day affairs of the business. But, when there is a problem in the economy in terms of slowdown, COVID-19 pandemic and other major issues, then government should take the role of regulators to frame new policies, its implementation and direct businesses to what to do and what not to do in the form of strict advise. It will help government protect the economy in better ways. It is due to the reason that it is the government and agencies that come ahead to protect the economy and capitalist businesses run away from the problem. In present scenario also, it is the government that came up with $3 Trillion package, lockdown measures and direct payment to unemployed people. So, government should acquire the role of moderator & regulator in present day economic scenario.