THE BENEFITS AND DRAWBACKS OF GOVERNMENT INVOLVEMENT

The degree to which states should interfere in the economy is a substantial economic question.

From one end, free-market financial experts say that government interference should be restricted to just the most fundamental functions, such as private protecting property and the preservation of peace and order.

Marxists economic experts, on the other hand, say that the government should interfere in all aspects of the economy to ensure the most efficient and equal allocation of resources. 

Main sector of government intrusion include:

 

Support public benefits (for example, national defence) by universal taxing

Basic health service and training criteria must be met.

Regulation and preservation of the environment

Monopolies’ authority should be limited.

Worker rights legislation.

Government-Intervention-Pros-And-Cons

Arguments for Government Involvement Equality. There will almost certainly be tremendous disparity and destitution in a free economy. This is not because of a meritocracy, but rather because of unjust benefits of luck (inherited wealth, superior education). Ministries can step up to offer a basic safety net, such as unemployment benefits or a basic wage for the ill and disabled. This enhances net economic wellbeing and allows people to escape the harshest forms of poverty. This government involvement can also help to avert societal unrest caused by severe inequality.

In a free economy, public utilities are rarely offered since there is no monetary incentive for enterprises to supply commodities that people may enjoy absolutely free. States can offer national defence, law and order, and fund these services through public taxes. Environmental protection is also a benefit to society; there seem to be a growing number of regions where a state is required to deal with challenges such as wildfires, sea level rise, and strain on freshwater resources.

Education:

Merit goods are under-consumed in free-market because people underestimate the personal benefits and/or ignore the external benefits. This leads to an underprovision of health care and education. Government intervention to provide free education can lead to a significant improvement in the quality of life for people who are educated. There are also many positive externalities to the rest of society. A well-educated society can improve labour productivity and economic growth.

Change in consumer habits. Usage of deplorable commodities such as alcohol, cigarettes, and opioids can result in both personal and substantial social consequences (e.g. crime). If the government finds harmful items, it can gradually modify consumer habits by imposing higher taxes or launching marketing campaigns. 

Infrastructure strategizing 

Another free market constraint is underinvestment in quasi-public products such as roads and trains. This can result in transportation congestion. Authorities may prepare for future transportation patterns and invest in the necessary roads and trains.

Disadvantages of government intervention

Government blunder 

Failure of government is a word used to indicate how government action can produce issues of its own. For instance, the administration may make choices based on short-term political motives that result in inefficiency. Tariffs imposed by the government to safeguard domestic economy, for example, might ignite a trade war, causing the economy to decline.

Pros of intervention

The state may offer public healthcare, ensuring that nobody ever dies as a result of inability to pay.

It is just to have universal public healthcare.

Health care is seen as a fundamental right and is essential to a good standard of living.

Universal healthcare can boost long-term work efficiency because healthier workers can work over longer periods of time and have fewer sick days.

Public healthcare can help reduce the stress and costs associated with falling bankrupt due to medical expenditures. Sudden medical costs create bankruptcies in the United States, where the private sector plays a big role. (66 percent of bankruptcies are due to medical expenses – CNBC)

Resize in government services. The government may acquire drugs in bulk and provide specialised services.

Instead of charging for drugs, the state may supply them for free.

Cons of intervention

People who wish to pick their own private insurance and doctors may find that state provisions limit their options.

Profit incentives may exist in the private sector to reduce prices and provide inventive new therapies that are wanted.

Services provided by the government may be constrained by tax income. It is more likely that services will be rationed, resulting in longer waiting lists and the absence of some treatments.

Higher taxes will be required for government health care. Too high taxes may reduce motivation to work.

So overall if we see both sides have some or the other issue and benefit for one of the party in play.