Economic intervention
Economic intervention is when a nation’s government takes action to alter the economy for political purposes. In a free market economy, individuals and businesses have the ability to act in their own self-interest. Property ownership is protected by the courts, so individuals do not have to worry about the loss of their goods to other individuals. Copious amounts of economic intervention will result in a mixed economy, where government agencies will play a larger-than-normal role in the economic planning of the nation. Economic intervention when a nation attempts to create a sense of equality among the citizens within its borders. Types of economic intervention or planning include minimum wage laws, ability to unionize workers, price controls, tariffs, or import quotas and tax deductions or credits. Governments often use these plans to help create an economy free from unfair competition, which is the inability of one individual to achieve the same level of economic wealth as another person. Heavy-handed economic intervention will regularly result in a centrally planned economy, such as in socialist or communist societies. These economies rely on their government to direct the economy as necessary and provide the allocation of resources according to specific purposes [Smart Capital Mind].
Government intervention is when the government gets involved in the marketplace for the purpose of impacting the economy. It can regularly be a very controversial topic and is known to fuel political debate. Those that advocate for government intervention argue that the Law of Supply and Demand is not enough to keep the economy running smoothly, and this intervention will protect against abuses and guard the overall success of the economy. They argue that it is a responsibility of the government to ensure the best interest of the people and do what is necessary to reduce or eliminate poverty and hardship. Others believe that government intervention is not the answer to every economic problem, and their involvement typically does more harm than good [Study.com].
What is Economic Intervention?. Smart Capital Mind. Retrieved from: https://www.smartcapitalmind.com/what-is-economic-intervention.htm
Government Intervention in the Economy – Impact & Examples. Study.com. Retrieved from: https://study.com/learn/lesson/government-intervention-economy-overview-impact-examples.html