Question

Explain the role of government in protecting the rights of individuals in a market economy.

Answer 1

Before getting into the way of how the government protects the rights of individuals and creates a market economy, it should be clearly known that without the government, there would be no market. Though markets are a natural phenomenon that follow laws like demand and supply but without the government there would be no laws that would exist to function them.

The government creates and maintains the market ways to protect individuals in the following ways:

i) Law and Order- It helps to structure the economy. The government creates a legal system that can punish the people who commit fraud.

ii) Rules of property- Without government, what you think of as your property might not be as yours as you think or want it to be. It is because of the laws that say that the payment for a good confers to a title to it. We see this especially with land known as "real estate".

iii) Market Standards- This point means that the government sees to it that the buyers and sellers are walking on the same path.

iv) Public goods- These goods are the things and services that the government provides that can be enjoyed by everyone and, once provided, cannot be denied to a particular subset of the population. One such example is public transportation.

v) Labour force- You might have heard that the government is not a job creator and in some ways that is true except for jobs like firefighters, public school teachers, soldiers, sailors etc.