Economic intervention

[swatiraohnlu]

Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy. Economic interventions common in contemporary governments include targeted taxes, targeted tax credits, minimum wage legislation, union shop rules, contracting preferences, direct subsidies to certain classes of producers, price supports, price caps, production quotas, import quotas, and tariffs. Demand management and Keynesian economics (helicopter money) are sometimes cited as mild forms of economic planning, designed to overcome cyclical instability inherent in market economies, or to make market economies function properly in a desired fashion.

 

[swatiraohnlu]

Advocates of free market or laissez-faire economics tend to see government intervention in the economy as harmful, due the fallacy of central planning, the law of unintended consequences, and other considerations. Economically left-wing entities can see economic interventionism as a way of ensuring that firms adhere to the social boundaries of that country and that they often outweigh potential negative unintended consequences. It is difficult to suggest precisely what effects it will have on a given society.