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Government Intervention and Its Disadvantages Should our economy be run by a doctrine that was made popular by a group of French writers called physiocrats in the mid-1700s This doctrine is called laissez-faire and it literally means to let or allow to doThe Family Education Network It is a theory of economic policy which states that government generally should not interfere with decisions made in an open competitive market These decisions include policies such as setting prices and wages According to the doctrine of laissez-faire workers are most productive and a nations economy functions most efficiently when people can pursue their own economic interest freely The economy of the United States is no where close to being a laissez-faire system In fact government spending and intervention in the economic sector has ballooned According to the Federal Money Retriever in 1998 alone the government spent over 37733526000 in agricultural commodities loans marketing and stabilization The role of government has grown to a point where the benefits of government intervention are far outweighed by the negative effects on the economy as a whole One of the major areas in which the government intervenes is in the agricultural sector of the economy The government has three ways it can intervene and help its producers These ways include price policies direct payments and input policies Price policies have the largest effect on producers Tariffs quotas and taxes are just a few examples of price policies While these policies bring revenue into the government in the end they hurt consumers Each of these policies raise the prices of both imported and native goods They are designed to help stabilize prices and give the native producers a chance to compete with foreign goods Under the doctrine of laissez-faire the government would not interfere with prices and the native producers would be forced to lower their prices giving the nations citizens a better deal in the market The use of
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