Economic interventionism
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Economic interventionism or economic planning is an action in a Market economy taken by a government, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy.[citation needed] Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting equality, managing the money supply and interest rates, increasing profits, or addressing market failures. The intervention may to direct, or indirect as in the case of indicative planning. When this economic planning is extensive, the economy is referred to as a planned economy.
Economic interventionism is often associated with the political left which believes that certain market outcomes are undesirable or ineffective and ought to be mitigated. Economic interventionism is sometimes practiced by national conservative, fascist and right-wing parties with the thinking that the free market can damage national traditions, social order, or the authority of the state itself.
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[edit] Types of interventions
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.
[edit] Effects
Economic intervention can be seen by more economically right-wing entities as damaging to the economy. Economically left-wing entities see economic interventionism as a way of ensuring that firms adhere to the social boundaries of that country. It is difficult to suggest precisely what effects it will have on a given society.Economic planning has many after effects like a socially engineered future scope for the economy.
[edit] See also
[edit] External links
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