The Proper Role of Government in the Economy

Discussion of what should be the objective of government involvement in the economy and the degree of that involvement.

The appropriate role of government in the economy is an issue that has been long debated. Several hundred years into the debate, no solid answer exists. Throughout the 20th century alone, several different forms of governance have been attempted, and while some have been more successful than others, the prevailing mixed economy (limited laissez faire) used in most developed countries seems to offer a reasonably decent solution. The key to this form of economy, it seems, is flexibility; with the government more active at some times than others. Good leaders know where the strengths of capitalism lay and what its limitations are. The proper role of government, in this broad sense, is to maximize the benefits of capitalism by staying out of the economy, but exerting some influence in areas where capitalism is deficient.

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