The role of the state in the economy is a very current and debated issue. Should the government be narrowed down as an institution and an observer, or should it have an active role as a regulator and intervener? Especially the financial and bank crisis of 2008 raised the question of the government’s role within the economy – people wondered could the crisis have been avoided if we would have had stronger government intervention. Some people argue against a strong economic state, stating that too much interventions will slow down growth and possibilities. The laissez-faire implies that the economy simply cannot be tamed or controlled – whatever happens, let it happen.
For someone like me, who comes from a certified Northern European welfare …show more content…
The social-democratic welfare state model in Finland has proven to be very prosperous in both social and economic perspectives (even though the financial crisis has currently led to an economic slump in Finland). I am myself very much in favor of a state which has a strong role in the economy – as in I support the idea of the welfare state. Humans themselves are not able to handle the scarce resources of the world and especially the fair distribution of the wealth. It would be naïve to say that state are fully capable of this, but they definitely are better in pursuing that goal, especially when they act under the ideology of redistribution of wealth. Finland is a perfect example of this. During the 1960’s Finnish social scientist Pekka Kuusi published his book which concerned the relation between the state and economics. The main idea of the book discussed social politics and it stated that it should be executed by the …show more content…
Smith argued that the state should not have significant power over economies and this is probably the part where he is widely misunderstood. Smith was against mercantilism but not government regulation in general. In fact, Smith believed that the state should for example participate in the funding of education and battle against the unequal redistribution of wealth. Therefore it is fair to say that the Smithian ideas have some welfare state basis on them. What I personally disagree with Smith is his conception of an “invisible hand”. The invisible hand theory suggests that all people are virtuous and their pursuit for wealth will lead to better outcome for everyone. The theory also tends to justify the conception of laissez-faire. For me this theory tries to suggest that the state is not needed in order to create a better society – it says that people can do it themselves if not regulated. David Ricardo and Thomas Malthus also shared similar ideas with Smith. They both were also in favor for a state which intervened as little as possible; the government’s roles should rather concern the organizing of domestic matters, such as jurisdiction, suffrage and
For someone like me, who comes from a certified Northern European welfare …show more content…
The social-democratic welfare state model in Finland has proven to be very prosperous in both social and economic perspectives (even though the financial crisis has currently led to an economic slump in Finland). I am myself very much in favor of a state which has a strong role in the economy – as in I support the idea of the welfare state. Humans themselves are not able to handle the scarce resources of the world and especially the fair distribution of the wealth. It would be naïve to say that state are fully capable of this, but they definitely are better in pursuing that goal, especially when they act under the ideology of redistribution of wealth. Finland is a perfect example of this. During the 1960’s Finnish social scientist Pekka Kuusi published his book which concerned the relation between the state and economics. The main idea of the book discussed social politics and it stated that it should be executed by the …show more content…
Smith argued that the state should not have significant power over economies and this is probably the part where he is widely misunderstood. Smith was against mercantilism but not government regulation in general. In fact, Smith believed that the state should for example participate in the funding of education and battle against the unequal redistribution of wealth. Therefore it is fair to say that the Smithian ideas have some welfare state basis on them. What I personally disagree with Smith is his conception of an “invisible hand”. The invisible hand theory suggests that all people are virtuous and their pursuit for wealth will lead to better outcome for everyone. The theory also tends to justify the conception of laissez-faire. For me this theory tries to suggest that the state is not needed in order to create a better society – it says that people can do it themselves if not regulated. David Ricardo and Thomas Malthus also shared similar ideas with Smith. They both were also in favor for a state which intervened as little as possible; the government’s roles should rather concern the organizing of domestic matters, such as jurisdiction, suffrage and