Government Intervention And Its Effects On The Economy Essay example

840 Words May 19th, 2016 4 Pages
Neoliberalism stated that free markets had more stability than Keynesianism described, because the risks in market can be predicted in advance and prices will always objectively reflect possibilities. However, Keynesianism believed that government intervention will stable the economy. According to this article, the author agrees that Keynesianism is better than neoliberalism in spite of some weaknesses. I am convinced by her claim that government intervention will more stable than free market and government intervention have some serious shortcomings that the government will pursuit of individual self-interest through political which will opposite to free market, however, government intervention still have advantages when market failure.
In the beginning, government intervention causes that corruption is perfectly justifiable. Since people would like to socialize the risks and privatize the remunerations, it will be hard to in the allocation of resources for optimization. Also, government intervening will have monopoly tendencies due to the difficulty of coordinating China’s huge bureaucracy. So it leads to government pay attention to benefit rather than efficiency. For example, Chinese past government intervening policies caused the negative outcome which is corrected by China’s leaders through anti-corruption campaign. The government privatizes some state-owned enterprises, to the extent that market competition can check the behavior of corporate managers. In the meanwhile…

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