What is Best for Our Economy?

I feel that in regard to the United States economy, the government should intervene as little as possible. In order to reach goals such as full employment and low inflation, a limited government role will continue to be effective in the years to come. We should rely on Adam Smith's "invisible hand", which according to the text, says that "businesses seeking self interest through profit will simultaneously promote the public or social interest of the nation."

With one of the strongest economies in the world and minimum government intervention, the United States will continue to prosper. Capitalism has been a major contributor to this nation's economic growth and overall success. In a capitalistic society, the factors of production (land, labor, capital, entrepreneurial ability) are privately owned and are primarily used to earn a profit for one's business. Under capitalism, businesses have many rights which include: the right to private property, the right to own a business and keep all profits, the right to freedom of competition, and the right to freedom of choice. I feel these rights reflect many of the basic principles that are written in the Constitution. Therefore, if the government were to infringe upon these rights, it could be interpreted as a violation of the Constitution.

Despite being limited, the government plays an important role in a capitalistic society and should continue to do so, most importantly by protecting the basic rights I just discussed. It is important for the government to maintain our free market system and minimize the interference of the free exchange of goods and services. In addition, they should continue to allow businesses to write contracts that are enforceable in court. Keeping taxes to a minimum allows businesses to prosper as well as helping the economy grow. Also, greed, corruption, and illegal activities of businesses are closely watched in order to prevent major problems from occurring, such as the Enron disaster.

Observing and maintaining diversity should also be a high priority for the government. Although the constitution protects minorities from unfair treatment, there is still racial discrimination occurring today. There are some business owners that will hire based solely on race and/or religion. This act itself is a violation of the Constitution. By allowing the government to regulate the diversity of employees, they can enforce businesses to hire based on the quality of a person's work ethic, not their race or religion.

Although I feel an increase in government intervention would have a negative impact on the economic growth of this country, it is important to understand the few possible benefits of a more socialistic type of society. Socialism, which focuses on social equality, is very important to some individuals. If the government intervened and issued higher taxes, they would be able to redistribute money to less fortunate members of the population through various government programs, for example: free education, health and childcare.

However, too much government intervention in a socialistic society can severely hurt the country's economy. An excess in government restrictions may make it more difficult to start up a business. In addition, there is no motivation to work diligently and help the business prosper if the government takes away the hard earned profit from taxes. As a result, many entrepreneurs may not have the desire to start up their own business in this society. Consequentially, more and more entrepreneurs are leaving these countries and creating their businesses in capitalistic countries where the government issues lower taxes.

In conclusion, it is evident that a society leaning towards capitalism will have a stronger economy. Although a government is important, it should have limited intervention in the economy. Too much intercession can be the downfall of an economic status. Americans should continue to engage in a free-market system, and rely on the principle of the "invisible hand." People will continue to work hard and facilitate the growth of the economy as long as they have the incentive for reward from their business. Therefore, I feel the United States must sustain capitalism and limit government mediation.