Market Economy in the United States

by: Adriel McMahan

Promoting and Securing Competition

The government helps ensure competition by creating anti-monopoly laws. These laws keep companies from dominating the economic market. One of these laws is the Clayton Act of 1914, which makes it illegal but not criminal. By having these laws in place, the government can ensure fair competition in the market, and a choice for the people.

Protecting Private Property Rights

"The fifth amendment to the constitution states that 'No person shall be . . . deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation.'" The citizens of the United States are safe to own property knowing it will never be taken away from them without some wrong doing. The rights will be around as long as the market economy is.

Promoting Equity

The government meets people in the middle and helps them understand their rights. It says in the Declaration of Independence that "all men are created equal." The government treats all people equally and gives them each the same rights, and they can take these rights and do what they want. Each person has the same right to be successful as the person beside them.

Providing Public Goods and Services

Goods and services such as public education, sanitation, police services, fire protection, libraries, infrastructure maintenance, and street lighting are provided by the government through tax dollars we pay. These services help keep the government running even though they do not make profit. Without these services, crime rates would be up, roads would be unsafe to drive on, and health would not be an easy thing to keep.

Resolving Externalities and Other Market Failures

The government must be involved in the market place to keep externalities from happening. Without this intervention, the market would fail. There has to be laws to make sure one company does not run a monopoly, or deals are carried out like they were promised. The government provides public health, welfare programs, and law enforcement. Without these programs, the market would fail.

Stabilizing and Promoting Growth

To ensure the stability and growth of the government, it is dependable. "They maintain the stability of the currency, enforce and defend property rights, and provide oversight that assures private citizens that their transaction partners in the marketplace are held accountable." This allows people to invest money and open businesses trusting that they can count on the government.

Using Regulations and Deregulation Policies to Affect Consumers and Producers

"Regulation is action by a government or another authority to help make sure that the economy is as fair as possible. Not equal, but fair. That is a really big distinction and one that plays out in economic history." Deregulation is when the government reduces or eliminates industry restrictions to improve the ease of doing business. The government helps keep everything fair and running so that consumers and producers can continue to be free and run businesses.