Welfare Capitalism

Essay by PaperNerd ContributorUniversity, Bachelor's January 2002

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Welfare Capitalism. Well & Fair for Everyone.

What extent of government regulation allows the citizens of the country the maximum amount of liberty? How much should the government intervene to protect the consumer? These are questions that every society must answer when developing their economic system. And for each question there are multiple answers. Some believe that little to no regulation is necessary, that the market place has natural laws of its own. Others disagree, saying that it is the government's duty to protect the individual from the evils of the free market. Both solutions have definite attributes. The first answer describes a system of capitalism, or lassiez-faire. Adam Smith, the philosopher credited with the development of this ideology, argued that the actions of each individual, motivated by self-interest, would work together for the good of society. Smith said that in order for this to work, the marketplace had to be competitive.

If the government were to implement regulations, it would counteract the natural forces of the market place and cause unfair restrictions. In theory this form of capitalism is highly productive, but in practice is seems that it does not benefit all, as Smith predicted. Under this type of economic system, it is often the worker who falls victim to circumstances such as exploitation and poverty. Lassiez-faire permits the infringement upon an individual's liberty by other citizens. Although Adam Smith would describe these situations as part of the natural business cycle, modern society has reached a point where such abuses are no longer tolerable. It is at this time that the government must step in, and provide regulations that protect the individual. Once the government begins intervening though, it is easy to become overzealous and assume total regulatory control. Such an idea is called central planning, when the government...