Question

a. In what ways is economic prosperity the result of free trade and individual initiative and in what ways is it the result of social activism, laws and regulation that limit competition, and government subsidies and assistance?

b. In what ways is economic prosperity the result of social activism, laws and regulation that limit competition, and government subsidies and assistance?

c. Do we owe modern economic prosperity to individual initiative and global free trade or to non-market activism and institutions?

Answer 1

Ans a= Laissez-faire is an economic notion which originated in the 18th century . It opposed any governmental intervention in corporate affairs. Its a French terminology which translates as ‘leave alone’ . The driving dogma is that the less the state is involved in the economy, more prosperous business is—& by extension, the whole society . Laissez-faire economics are a main element of free market capitalism. Since natural self-regulation is the soundest kind of regulation, these economists claim that there’s no requirement for industrial/ business affairs to be complicated by governmental intervention. As an outcome, they oppose any kind of legislation / oversight; they’re against minimum wage level, duties, trade restrictions, & business taxes. In fact, these economists view taxes as a penalization for production.

A combination of the right political circumstances and the development of science & know-how, in part because of the augmented public investment, has allowed private players & public leaders to capitalize on the potentials created by an ever more prosperous & interconnected community. The ability to bring governmental authority & private markets together is the divider between mass prosperity & widespread destitution, illiteracy, & poor health. Markets are amazing arrangements for coordinating decentralized acts around the pivotal signal of prices. The advantages are clear & simple to understand. On the other hand, the market failures which make public authority an important part of the mixed economy are complicated, multifaceted, & not as effortlessly summed up.

Ans b=

• The state attempts to combat market inequities thru regulation, taxes, & subsidies.
• The state may also intervene in markets to foster overall economic fairness.
• Maximization of social welfare is one of the most common reasons for governmental intervention. Instances include elimination of monopolies & regulating negative externalities such as pollution.
• The state may at times intervene in markets to foster other aims, like national unity& advancement.

Ans c=

• Laissez-faire is an economic doctrine of free market capitalism.
• This was outlined by the French Physiocrats in the 18th century.
• Subsequently ,free market economists built upon the concepts of laissez-faire as a way to economic prosperity, although detractors have opposed it for promoting inequalities.