Free Market Economy: A Case Study

a) The economy today under a system in which the government’s sole purpose is to protect private property and contracts would be very different than our present economy. For example, the entire system of subsidies used extensively by the United States would be non-existent, and this would produce a completely different national economy and infrastructure. Early infrastructure was heavily subsidized by the U.S government including the Erie Canal and most railroads (Wood, January 16, 2015). So, in the hypothetical world of a completely free market U.S. Constitution, it can be surmised that major infrastructure projects would have been either not accomplished or perhaps taken a longer period to build. Tax rates under a government which only takes the amount required to protect the community provides a substantial difference from the current system of government. For instance, in this theoretical government the rates of taxation would possible be lower for all income brackets, and this would allow more people to keep the money they earn and spend it as they see fit. However, since the government needs only enough …show more content…
With fewer restrictions on businesses, but enough regulation to ensure protection of private property, an economy would have the ability to grow unhampered. Heilbroner and Milberg explain, “as capitalist seek money, they invest in machines and equipment as a result…their workers produce more [and thus] society’s output grows” (Ch.3, page.48). The differences between the two economies might not be size as much as areas of growth and focus. Due to lack of government involvement (i.e. subsidies, tariffs, and redistribution) the free market economy perhaps explored different avenues of research, industry, and business that are very different from the current