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Reasons for and against Government intervention
Reasons for and against Government intervention
Published: 2013/01/02
Channel: Economics Alex
Evaluating Government Intervention
Evaluating Government Intervention
Published: 2016/05/13
Channel: tutor2u
Government intervention in the market
Government intervention in the market
Published: 2014/12/11
Channel: OER Africa
Government Intervention - Economics AS Level Unit 1
Government Intervention - Economics AS Level Unit 1
Published: 2014/04/22
Channel: Dani's Revision Channel
Economic interventionism
Economic interventionism
Published: 2016/08/22
Channel: WikiWikiup
Economic interventionism
Economic interventionism
Published: 2016/01/22
Channel: WikiAudio
Economics of natural disasters: Moral hazard, government intervention and insurance
Economics of natural disasters: Moral hazard, government intervention and insurance
Published: 2011/12/31
Channel: libreechangetv
Interventionism, Trump
Interventionism, Trump's Economic Policy, and the Boomerang Effect (Abby Hall Pt. 2)
Published: 2017/05/25
Channel: The Rubin Report
Does US economy need more or less government intervention?
Does US economy need more or less government intervention?
Published: 2016/07/30
Channel: Fox News
Game Economic Interventionism
Game Economic Interventionism
Published: 2014/08/25
Channel: stoyan denev
Government Intervention Series:  Introduction and Overview
Government Intervention Series: Introduction and Overview
Published: 2016/01/01
Channel: Brad Cartwright Economics
How Government Intervention Hurts The Economy
How Government Intervention Hurts The Economy
Published: 2011/02/01
Channel: intelligentright
Theo--Economic interventionism
Theo--Economic interventionism
Published: 2011/02/07
Channel: kanokaaa
Government Intervention in Economy
Government Intervention in Economy
Published: 2016/11/28
Channel: Macro Econ
The Reality of State Intervention
The Reality of State Intervention
Published: 2012/04/24
Channel: Big Think
Dr. Thomas Sowell on Government economic intervention
Dr. Thomas Sowell on Government economic intervention
Published: 2016/10/09
Channel: Past Patriot
Economics A2 Level Unit 3 - Government Intervention in the Market
Economics A2 Level Unit 3 - Government Intervention in the Market
Published: 2015/05/27
Channel: Dani's Revision Channel
Market failure and government intervention
Market failure and government intervention
Published: 2015/08/06
Channel: Mrs. McConnell's Concurrent Economics
AS Economics Intervention #4: Maximum prices to correct under-consumption
AS Economics Intervention #4: Maximum prices to correct under-consumption
Published: 2015/03/06
Channel: Mark Seccombe
Nature and Scope of Economic Interventionism | George Reisman
Nature and Scope of Economic Interventionism | George Reisman
Published: 2010/05/18
Channel: LibertyInOurTime
Gov Unit 4 pgs 26 28 Economic Intervention
Gov Unit 4 pgs 26 28 Economic Intervention
Published: 2014/08/07
Channel: Joseph Barros
Inside Story - Obama
Inside Story - Obama's economic intervention
Published: 2010/07/22
Channel: Al Jazeera English
The Progressive Reformers: Advocating Government Intervention in the Economy
The Progressive Reformers: Advocating Government Intervention in the Economy
Published: 2017/02/23
Channel: Harrison Berryhill
A Critique of Jamaica
A Critique of Jamaica's Economic Intervention
Published: 2011/03/09
Channel: cfpvideocontest
HKDSE Economics Government intervention - Quota (配額) Part 1
HKDSE Economics Government intervention - Quota (配額) Part 1
Published: 2015/06/29
Channel: First Page Education (Economics & Business tutorial in HK)
Chapter 5 Government Intervention  Spotlight on China and Germany
Chapter 5 Government Intervention Spotlight on China and Germany
Published: 2016/02/03
Channel: Darwin Dhas
'Free markets' depend on state intervention
Published: 2008/10/06
Channel: TheRealNews
Fun with Market Failures and Government Intervention
Fun with Market Failures and Government Intervention
Published: 2016/08/02
Channel: MichaelEconLauck
Theresa Key - Economic Intervention w/ Diane Hochman
Theresa Key - Economic Intervention w/ Diane Hochman
Published: 2012/10/06
Channel: Key Solution Experience Live
Against Economic Arguments for Government
Against Economic Arguments for Government
Published: 2014/09/05
Channel: John Vandivier
limits of government intervention in the economy and it
limits of government intervention in the economy and it's failures
Published: 2010/10/14
Channel: Flinttalk Radioa
AS Economics Intervention #5: Buffer Stocks to stabilise prices
AS Economics Intervention #5: Buffer Stocks to stabilise prices
Published: 2015/03/10
Channel: Mark Seccombe
Government intervention in the market:  Price ceiling
Government intervention in the market: Price ceiling
Published: 2012/11/18
Channel: lostmy1
The Free Market vs.Government Intervention: An Economic Panel Discussion
The Free Market vs.Government Intervention: An Economic Panel Discussion
Published: 2011/11/27
Channel: SRU Young Americans for Liberty Cestrone
Government Power vs Economic Power (by Ludwig von Mises)
Government Power vs Economic Power (by Ludwig von Mises)
Published: 2017/10/27
Channel: Man Against The State
Economic Update - (Old News) Government Intervention 5-19-10
Economic Update - (Old News) Government Intervention 5-19-10
Published: 2010/05/19
Channel: Wes Bridel
Environmental Market Failure and Government Intervention
Environmental Market Failure and Government Intervention
Published: 2013/05/19
Channel: EconplusDal
Government intervention - price ceilings
Government intervention - price ceilings
Published: 2016/04/16
Channel: Mohamed El-Ashiry
Government Intervention - Producer Subsidies
Government Intervention - Producer Subsidies
Published: 2016/04/17
Channel: tutor2u
Government Intervention
Government Intervention
Published: 2015/07/08
Channel: Keshe Foundation Spaceship Institute
Yaron Answers: Capitalizing On Government Intervention
Yaron Answers: Capitalizing On Government Intervention
Published: 2012/11/13
Channel: Ayn Rand Institute
Government intervention in the market:  Minimum wage
Government intervention in the market: Minimum wage
Published: 2012/11/18
Channel: lostmy1
AS Economics Intervention #2: Indirect taxation
AS Economics Intervention #2: Indirect taxation
Published: 2015/03/06
Channel: Mark Seccombe
IDB funded state intervention, aimed at addressing hinterland housing needs...
IDB funded state intervention, aimed at addressing hinterland housing needs...
Published: 2017/10/09
Channel: DPI | Department of Public Information
AS Economics Unit 1 Revision :  Government Intervention and Government failure
AS Economics Unit 1 Revision : Government Intervention and Government failure
Published: 2014/06/03
Channel: The Revision Guide
MCQ Revision: Government intervention in a market
MCQ Revision: Government intervention in a market
Published: 2017/11/02
Channel: tutor2u
Government Intervention and the Structure of Social Capital | by Chris Coyne
Government Intervention and the Structure of Social Capital | by Chris Coyne
Published: 2014/07/24
Channel: V for Voluntary Library
1.3 Government Intervention - Subsidies
1.3 Government Intervention - Subsidies
Published: 2017/04/07
Channel: Richard Baum
Abby Hall and Dave Rubin: Military Intervention and the Surveillance State (Full Interview)
Abby Hall and Dave Rubin: Military Intervention and the Surveillance State (Full Interview)
Published: 2017/05/26
Channel: The Rubin Report
1 3 Government Intervention HL content
1 3 Government Intervention HL content
Published: 2016/02/16
Channel: Richard Baum
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WIKIPEDIA ARTICLE

From Wikipedia, the free encyclopedia
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Red tape binds 19th century documents, the origin of phrase "red tape" to criticize economic interventionist laws and regulations

Economic interventionism (sometimes state interventionism) is an economic policy perspective favoring government intervention in the market process to correct the market failures and promote the general welfare of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud and enforcement of contracts and provision of public goods.[1][2][3] Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, or addressing market failures.

The term intervention assumes on a philosophical level that the state and economy should be inherently separated from each other;[4] therefore the terminology applies to capitalist market-based economies where government action interrupts the market forces at play through regulations, economic policies or subsidies (however state-owned enterprises that operate in the market do not constitute an intervention). The term "intervention" is typically used by advocates of laissez-faire and free markets.[5][6]

Capitalist market economies that feature high degrees of state intervention are often referred to as mixed economies.[7]

Political perspectives[edit]

Libertarians and other advocates of free market or laissez-faire economics generally view government interventions as harmful, due to the law of unintended consequences, belief in government's inability to effectively manage economic concerns, and other considerations. Government officials tend to be naturally disposed to seek more power and authority, and the money that usually goes with those things, and this quest often takes the form of economic interventionism which they then seek to justify. Many modern liberals (in the United States) and contemporary social democrats (in Europe) are inclined to support interventionism, seeing state economic interventions as an important means of promoting greater income equality and social welfare.[citation needed]

On the other hand, Marxists often feel that government welfare programs might interfere with the goal of overthrowing capitalism and replacing it with socialism, because a welfare state makes capitalism more tolerable to the average worker.[8] Socialists often criticize interventionism (as supported by social democrats and social liberals) as being untenable and liable to cause more economic distortion in the long-run. From this perspective, any attempt to "patch up" capitalism's contradictions would lead to distortions in the economy elsewhere, so that the only real and lasting solution is to entirely replace capitalism with a socialist economy.[9]

Political conservatives of the nationalist variety also frequently support economic interventionism as a means of protecting the power and wealth of a country or its people, particularly via advantages granted to industries seen as nationally vital.[citation needed]

Effects[edit]

Typical intervention strategies under different conditions

The effects of government economic interventionism are widely disputed.

Regulatory authorities do not consistently close markets, yet as seen in economic liberalization efforts by states and various institutions (International Monetary Fund and World Bank) in Latin America, "...financial liberalization and privatization coincided with democratization".[10] One study suggests that after the lost decade an increasing "diffusion of regulatory authorities" emerged,[11] these actors engaged in restructuring the economies within Latin America. Latin America through the 1980s had undergone a debt crisis and hyperinflation (during 1989 and 1990). These international stakeholders restricted the state's economic leverage, and bound it in contract to co-operate.[12] Multiple projects and years of failed attempts, for the Argentine state to comply, the renewal and intervention seemed stalled. Two key intervention factors that instigated economic progress in Argentina, were substantially increasing privatization and the establishment of a currency board.[12] As one can see this exemplifies global institutions including the International Monetary Fund and the World Bank instigate and propagate openness to increase foreign investments and economic development within places including Latin America.[3]

In Western countries, government officials theoretically weigh the cost benefit for an intervention for the population or they succumb beneath coercion by a third private party and must take action.[13] Also intervention for economic development is at the discretion and self-interest of the stake holders, the multifarious interpretations of progress and development theory could mean.[14] To illustrate this during the 2008 debt crisis; the government and international institutions did not prop Lehman Brothers up therefore allowing them to file bankruptcy. Days later when AIG waned towards collapsing, the state spent public money to keep it from falling.[13] These corporations have interconnected interests with the state. Therefore, their incentive is to influence the government to designate regulatory policies[13] that will not inhibit their accumulation of assets.[8]

In Japan, Abenomics is a form of intervention with respect to Prime Minister Shinzo Abe's desire to restore the country's former glory in the midst of a globalized economy.[15]

U.S. government interventions[edit]

U.S. energy sources and sinks

President Richard Nixon signed amendments to the Clean Air Act in 1970, that expanded it to mandate state and federal regulation of both automobiles and industry.[16] It was later further amended in 1977 and 1990.

"One of the first modern environmental protection laws enacted in the United States was the National Environmental Policy Act of 1969 (NEPA), which requires the government to consider the impact of its actions or policies on the environment. NEPA remains one of the most commonly used environmental laws in the nation. In addition to NEPA, there are numerous pollution-control statutes that apply to such specific environmental media as air and water. The best known of these laws are the Clean Air Act (CAA), Clean Water Act (CWA), and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) commonly referred to as Superfund. Among the many other important pollution control laws are the Resource Conservation and Recovery Act (RCRA), Toxic Substances Control Act (TSCA), Oil Pollution Prevention Act (OPP), Emergency Planning and Community Right-to-Know Act (EPCRA), and the Pollution Prevention Act (PPA)."[17]

United States pollution control statutes tend to be numerous and diverse, and many of the environmental statutes passed by Congress are aimed at pollution prevention, they often need to be expanded and updated before their impact is fully realized. Pollution-control laws are generally too broad to be managed by existing legal bodies, so Congress must find or create an agency for each that will be able to implement the mandated mission effectively.[17]

During World War I, U.S government intervention mandated that the manufacturing of cars be replaced with machinery to successfully fight the war. Today government intervention could be used to break the U.S dependence on oil by mandating U.S automakers to produce electric cars such as the Chevrolet Volt. Recently, Michigan Gov. Jennifer Granholm (D) said, “We need help from Congress,” namely, renewing the clean energy manufacturing tax credit and the tax incentives that make plug-ins cheaper to buy for consumers.[18] It is possible that government mandated carbon taxes could be used to improve technology and make cars like the Volt more affordable to consumers. Unfortunately, current bills suggest carbon prices would only add a few cents to the price of gasoline, which has negligible effects, compared to what’s needed to change fuel consumption.[18] Washington is beginning to invest in car manufacturing industry by partially provinding $6 billion in battery-related public and private investments since 2008, and the White House has taken credit for putting a down payment on the U.S. battery industry that may reduce battery prices in the coming years.[18] Currently, opponents believe that the carbon dioxide emissions tax, that the U.S. government introduced, on new cars that is unfair on consumers and looks like a revenue-raising fiscal intervention instead of limiting harm caused to the environment.[19] A national fuel tax means everyone, no matter what vehicle they drive, will pay the tax. The amount of tax each individual or company pays will be proportional to the emissions they generate. The more they drive, the more that they would need to pay.[19] This tax is supported by the motor manufacturers, however stipulations confirmed by the National Treasury, state that minibuses and midibuses will receive a special exclusion from the emissions tax on cars and light commercial vehicles, which comes into effect from September 1, 2010. This exclusion is because these taxi vehicles are used for public transport, which opponents of the tax disagree with.[19]

During George W. Bush’s 2000 campaign, he promised to commit $2 billion over 10 years to advance clean coal technology through research and development initiatives. According to Bush supporters, he fulfilled that promise in his fiscal year 2008 budget request, allocating $426 million for the Clean Coal Technology Program.[20] During his administration, Congress passed the Energy Policy Act of 2005, funding research into carbon-capture technology to remove and bury the carbon in coal after it is burned. The coal industry received $9 billion in subsidies under the act, as part of an initiative supposedly to reduce U.S. dependence on foreign oil and reduce carbon emissions. This included $6.2 billion for new power plants, $1.1 billion in tax breaks to install pollution-control technology and another $1.1 billion to make coal a cost efficient fuel. The act also allowed redefinitions of coal processing, such as spraying on diesel or starch, to qualify them as “non-traditional,” allowing coal producers to avoid paying $1.3 billion in taxes per year.[20]

The Waxman-Markey bill, also called the American Clean Energy and Security Act, passed by the House Energy and Commerce Committee in 2010, targets dramatic CO2 reductions after 2020, when the price of the permits would rise to further limit consumers’ demand for CO2-intensive goods and services. The legislation is targeting 83 percent reduction in CO2 emissions from 2005 levels in the year 2050.[21] A study by the EPA estimates that the price of the permit would rise from about $20 a ton in 2020 to more than $75 a ton in 2050.

The US Office of Management and Budget (OMB) shows that federal subsidies for coal in the United States were planned to be reduced significantly between 2011 and 2020, provided the budget passed through Congress and reduces four coal tax preferences: Expensing of Exploration and Development Costs, Percent Depletion for Hard Mineral Fossil Fuels, Royalty Taxation, and Domestic Manufacturing Deduction for Hard Mineral Fossil Fuels.[22] The fiscal 2011 budget proposed by the Obama administration would cut approximately $2.3 billion in coal subsidies during the next decade.[23]

See also[edit]

References[edit]

  1. ^ Ellen Frankel, Paul (1980). "Laissez Faire in Nineteenth Century Britain: Fact or Myth". Literature of Liberty. iii (4): 5–38. Retrieved 5 February 2012. 
  2. ^ Karagiannis, Nikolaos (2001). "Key Economic and Politico-Institutional Elements of Modern Interventionism". Social and Economic Studies. 50 (3/4): 17–47. JSTOR 27865245. 
  3. ^ a b von Mises, Ludwig (1998). Interventionism: An Economic Analysis (PDF). New York: The Foundation for Economic Education. pp. 10–12. 
  4. ^ Lu, Catherine. "Intervention". Encyclopedia of Political Theory. SAGE. Retrieved 5 February 2012. 
  5. ^ von Mises, Ludwig (1998). Interventionism: An Economic Analysis (PDF). New York: The Foundation for Economic Education, Inc. pp. 10–12. 
  6. ^ Brown, Douglas (November 11, 2011). Towards a Radical Democracy (Routledge Revivals): The Political Economy of the Budapest School. Routledge. pp. 10–11. ISBN 978-0415608794. 
  7. ^ Brown, Douglas (November 11, 2011). Towards a Radical Democracy (Routledge Revivals): The Political Economy of the Budapest School. Routledge. pp. 10–11. ISBN 978-0415608794. The political definition refers to the degree of state intervention in what is basically a capitalist market economy. Thus this definition 'portray[s] the phenomenon in terms of state encroaching upon market and thereby suggest[s] that market is the natural or preferable mechanism 
  8. ^ a b Pierson, Chris (1999). Gamble; et al., eds. Marxism and Social Science. Urbana and Chicago: University of Illinois Press. pp. 176–77. 
  9. ^ Schweickart, David. Democratic Socialism. Encyclopedia of Activism and Social Justice (2006): http://orion.it.luc.edu/~dschwei/demsoc.htm: "Social democrats supported and tried to strengthen the basic institutions of the welfare state – pensions for all, public health care, public education, unemployment insurance. They supported and tried to strengthen the labor movement. The latter, as socialists, argued that capitalism could never be sufficiently humanized, and that trying to suppress the economic contradictions in one area would only see them emerge in a different guise elsewhere. (E.g., if you push unemployment too low, you'll get inflation; if job security is too strong, labor discipline breaks down; etc.)"
  10. ^ Karagiannis, Nikolaos (2001). "Key Economic and Politico-Institutional Elements of Modern Interventionism". Social and Economic Studies. 50 (3/4): 19–21. JSTOR 27865245. 
  11. ^ Jordana, Jacint; David Levi-Faur (Mar 2005). "The Diffusion of Regulatory Capitalism in Latin America: Sectoral and National Channels in the Making of a New Order". Annals of the American Academy of Political and Social Science. 598 (The Rise of Regulatory Capitalism: The Global Diffusion of a new Order): 102–24. doi:10.1177/0002716204272587. JSTOR 25046082. 
  12. ^ a b de Beaufort Wijnholds, J. Onno. "The Argentine Drama: A View from the IMF Board" (PDF). The Crisis That Was Not Prevented: Argentina, the IMF, and Globalisation. FONDAD. Retrieved 2 February 2012. 
  13. ^ a b c Lanchester, John (November 5, 2009). "Bankocracy". London Review of Books. 31 (21). 
  14. ^ von Mises, Ludwig (1998). Interventionism: An Economic Analysis (PDF). New York: The Foundation for Economic Education, Inc. pp. 1–51. 
  15. ^ del Rosario, King (15 August 2013). "Abenomics and the Generic Threat". Retrieved 15 August 2013. 
  16. ^ (January 22, 2011). 40th Anniversary of the Clean Air Act. Environmental Protection Agency. Retrieved July 8, 2012.
  17. ^ a b Laws and Regulations, United States. Pollution Issues. Retrieved July 8, 2012.
  18. ^ a b c (August 3, 2010). Electric Carmakers Focus on Incentives, Not Carbon Prices. Carbon Offsets Daily. Retrieved July 8, 2012.
  19. ^ a b c (August 13, 2010). State puts cart before horse on vehicle carbon tax. Carbon Offsets Daily. Retrieved July 8, 2012.
  20. ^ a b (June 7, 2007). U.S. Coal Facts. The Indypendent. Retrieved July 8, 2012.
  21. ^ WRI summary of H.R. 2454, The American Clean Energy and Security Act
  22. ^ (March 3, 2010). US 2011 budget may cut coal subsidies. Retrieved July 8, 2012.
  23. ^ (February 2, 2010). Obama budget would cut coal subsidies. McClatchy. Retrieved July 8, 2012.

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