Essay Sample on Government Intervention in the Economy

Introduction

Government intervention in the economy is essential as it determines and improves the outcomes in the free market to prevent unsustainable growth. Government intervention helps address issues such as environmental preservation, reallocation of resources, distribution and redistribution of income, and stabilization of the economy. The government also intervenes to resolve social problems such as unemployment and maintain an acceptable standard of living. While some proponents insist on the ideologies of communism and government intervention, others think that the government should limit its role and power in the economy as it presents unnecessary infringement of freedom. This essay, therefore, seeks to give an in-depth analysis of the proponents and opponents' argument for government intervention in the economy.

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Proponents of Government Intervention in the Economy

The Clayton Antitrust Act

The first proponent of government intervention in the economy is the Clayton Antitrust Act, an amendment that was passed by the United States Congress in 1914. The Clayton Antitrust Act focuses on various topics such as price fixing, price discrimination, and unfair business practices. The Act was enacted to regulate the big corporations that used price fixing tactics and anti-competitive mergers to dominate the markets, and section 2 of the Act provides "That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities...."

The Act further declared actions such as boycotts, peaceful strikes, agricultural cooperatives, picketing and labor unions as legal according to the federal law. The Act prohibited local price cutting and exclusive sales. Section 4 of the Act gives the right to any individual who institutes a private lawsuit claiming that he is injured by an act that is against the antitrust laws. Section 7 of the Act provides for adequate guidelines for mergers and acquisitions of companies.

President Franklin D. Roosevelt Says Government Must Act, 1933

The second proponent of government intervention in the economy is President Franklin D. Roosevelt. President Franklin Roosevelt in his inaugural speech tried to assess the damage caused to the economy and proposed changes to improve the economy of the country. The President in his statement noted that "Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade..."

President Roosevelt proposed a New Deal that would reshape the economy's structure of the country by employing and giving financial security to the citizens. President Roosevelt was determined to end the great depression that had caused the collapse of stock markets. His speech gave people a sense of optimism and hopes to fight for his program the New Deal, and in part states that "The only thing we have to fear is fear itself." The New Deal was to introduce reforms in the social and economic spheres. The speech emphasized the need for regulations aimed at resolving the country's economic and social problems. President Roosevelt believed that the federal government had the power to get the country out of its depression by implementing work relief programs, emergency relief programs, banking reform programs, and agricultural programs. His speech also emphasized the need for the Social Security Act, union protection programs and programs that would help the migrant workers and farmers.

Opponents of Government Intervention in the Economy

President Herbert Hoover Applauds Limited Government, 1931

President Herbert Hoover believed in Limited Government intervention in the economy, and his limited response did not help the Americans during the struggle of the great depression. The Americans needed government intervention, but President Herbert Hoover's philosophy denied the Americans government aid. He instead appealed for the spirit of volunteerism, asking the Americans to try and believe in individualism and begged the businesses entities to retain their workers. This philosophy of limited government only drove the economy into economic turmoil. President Hoover believed in individualism citing that hard work pays and that the citizens could overcome hardships, and therefore refused to give government handouts to the people.

President Hoover thought that government aid destroys character and initiative of the American people. The president refrained from implementing regulations economic activities such as the stock markets. President Hoover initiated charity events urging wealthy people to donate to the poor and helped the state and private relief agencies alienate poverty, but his efforts were not sufficient to eradicate the widespread poverty and the economic turmoil. According to President Hoover, economic struggles were meant to test their character and courage, and the Americans were supposed to maintain the ideals of the American system and come out stronger in character, faith, and courage.

The Supreme Court Accepts Limits on Working Women's Hours: Muller v. Oregon, 1908

The Supreme Court verdict in the case of Muller v. Oregon can be quoted as the other opponent of intervention in the economy because the case upheld a law that limits the workday for the female wage to only ten hours. The case expanded the state's involvement in the sector of protective labor legislation. This case emphasized its decision basing its logic on the medical and social explanations that there is need to protect the female gender because overworking them is harmful to their health. The court agreed and claimed that females are the mothers of society, and this gave the government access to implement laws that regulate the workplace by gender. This intervention by the government denied women the same privileges and rights as other fellow citizens to bargain in the market and contract without restrictions. The Supreme Court decision laid disability on women by applauding the limits on working women's hours.

Conclusion

This essay has identified some of the proponents and opponents of government intervention and the importance of intervention that enhances sustainable growth. From the proponent's view such as the Clayton Antitrust Act, government intervention helps regulate price fixing, price discrimination, and unfair business practices. The Act was enacted to impose regulations on big corporations that used price fixing tactics and anti-competitive mergers to dominate the markets. Another proponent is President Franklin Roosevelt, and in his inaugural speech, he tried to assess the damage caused to the economy and proposed changes to improve the economy of the country. On the other hand, there are those who oppose Government intervention such as President Herbert Hoover who believed in limited government, and appealed for individualism and in return led to the widespread poverty and economic turmoil. Other opponents include the Supreme Court decision in the case of Muller v. Oregon that denied women the same privileges and rights as other fellow citizens to bargain in the market and contract without restrictions. From the above arguments, it is safe to conclude that government intervention is essential in the economy.

Bibliography

Norton, Mary Beth, Jane Kamensky, Carol Sheriff, David W. Blight, and Howard Chudacoff. A People and a Nation, Volume II: Since 1865. Boston: Cengage Learning, 2014.