How does the U.S Gov't...
1. Promote & secure competition in a market economy?
Markets are the basic coordinating instruments in a current market economy, not central preparation by government. A market brings buyers and sellers of a certain good or service into contact with one another. The range of sellers and buyers are listed on the supply and demand sides of numerous markets, and the result of these choices is the creation of a system of prices to distribute goods, services, and resources. These prices provide signals to participants in markets, helping them to make choices projected at furthering their interest.
2. Protect private property rights in a market economy?
One of the most significant requirements of a capitalist economic system and one of the most misunderstood concepts, is a strong system of property rights. For decade’s social critics in the United States and throughout the Western world have criticized that “property” rights too often take precedence over “human” rights, with the result that people are treated unequally and have unequal opportunities. Inequality exists in any culture. But the supposed conflict between property rights and human rights is a figment. Property rights are human rights.
The United States government upholds copyright and patent programs to guarantee everybody is able to profit from their original creative works. Of course, financial profit isn't the only reason to copyright or patent something: The programs are simply meant to give a creator legal control over when, where and how his or her creation is published or used in the United States. U.S. protection is extremely broad -- most kinds of creative work are copyrightable -- but it's also fairly amorphous, full of subjective interpretations and legal details. Something that is copyrighted may not be reproduced, published or copied without permission from the copyright-holder. U.S. copyright law says that all "original works of authorship" created after January 1, 1978 in a fixed tangible form are protected for the period of the creator's life plus 70 years. Companies hold copyrights for 95 to 120 years depending on whether or not the work has been published. A huge variety of creative work falls under this "original works of authorship" criteria, but the U.S. Copyright Office group’s copyrightable material into eight general categories:
•Pictorial, graphic, and sculptural works
•Pantomimes and choreographic works
•Motion pictures and other audio-visual works
3. Promote equity in a market economy?
Access to markets lies at the middle of economic opportunity. It is a fundamental Accomplishment for policies to provide people with skills and resources to follow a life of their Choosing. Enquiries of the design of market-related reforms and macroeconomic procedure are often distributed to hard-headed ministry of finance types, instruction and trade economists, financial professionals. By distinction, policies for equity, including those for managing the consequences of market and instruction conditions, are typically considered the domain of the social subdivisions, infrastructure services, justice systems and (for some) the tax policy. This division of labor is overpoweringly incorrect. The first set of policy domains is as important for equity as the second. This chapter is concerned with the design of policies for markets and for macroeconomic management. The combination of failing markets and unequal effect, usual in developing countries, is mainly spiteful for equity. It comes in many methods, almost all bad for equity, and most also bad for growth and overall development, at least in the long term. High levels of inequity—specifically unequal power unchecked by institutions—is typically bad both for the resourceful functioning of markets and for the sound behavior of macroeconomic policy. It is the interaction between unequal power and weak institutions that is most costly for development. The associations in cross-country patterns support this.
4. Provide public goods & services in a market economy?
Markets do well in providing most goods and services of everyday life such as groceries, restaurant meals, clothing, movies and cars. However, there is a role for government in areas where markets fail or are inefficient. Some roles of government contain protecting the environment, helping the poor and providing nationwide defense. In these cases, there is a role for government to provide economic security and foster competition. Governments also provide public goods. Public goods are those that cannot easily be restricted to those who pay for them. For most public goods, consumption by one person does not decrease the amount of the goods available to others. Political views differ about how wide the role of government should be in managing the economy. But even those who favor a mainly market-oriented economy usually concede that markets also need a background of a rule of law to function well, in which the government enforces contracts and protects property rights. The paradox of good government is that it must be strong enough to perform its appropriate roles, but weak enough that it does not intervene excessively in people's lives. Although there is a role for government, we cannot assume that it will perform that role well. There are and have been policies that hurt the poor, harm the environment and protect cartels. But some goods and services must be produced by the public sector or government. Public goods and services are paid for through tax dollars and are available to everyone, even those who do not pay taxes. That means taxpayers have an incentive to use public goods, and try to get more of them produced, while shifting tax burdens to others. This is known as “free riding.” Public goods are characterized by shared consumption and non-exclusion.
5. Resolve externalities and other market failures in a market economy?
Positive externalities are benefits that are infeasible to charge to provide; negative externalities are costs that are infeasible to charge to not provide. Generally, as Adam Smith explained, self-centeredness leads markets to produce whatever society want; to get rich, you have to sell what the community is willing to buy. Externalities weaken the social benefits of individual selfishness. If selfish consumers do not have to pay producers for benefits, they will not pay; and if self-centered producers are not rewarded, they will not produce. A treasured product fails to appear. The problem, as David Friedman aptly explains, "is not that one person pays for what somebody else gets however that nobody pays and nobody gets, nevertheless the good is worth more than it would cost to produce."
6. Stabilize and promote growth in a market economy?
A strategy enacted by governments and central banks to keep economic growth stable, along with price levels and unemployment. Ongoing stabilization policy includes monitoring the business cycle and adjusting benchmark interest rates to control total demand in the economy. The goal is to avoid irregular changes in total output, as measured by Gross Domestic Product (GDP) and large changes in inflation; stabilization of these factors generally leads to moderate changes in the employment rate as well. There is the view that such a system is inherently stable, with market forces tending to direct the economy to a smooth growth path.
To support growth, economies need sound legal systems, effective guideline and transparent corporate governance practices. These issues reinforce effective disclosure that is important to well-functioning markets. Sound social frameworks and attention to the long-term impacts, including on the environment, of investment choices and business procedures are also important for sustainable growth. Timely and accurate information assists shareholders in exercising control and investors in allocating funds to their most productive uses. In support, governmental authorities should ensure that corporate reporting assists them in monitoring markets and in identifying vulnerability.
7. Use regulations and deregulation policies to affect consumers and producers in a market economy?
Government regulation affects much of the economy. The purpose of regulation is to generate social or economic benefits that would not occur naturally in a pure market economy, or to avoid hidden costs that the market economy does not fully reflect. Benefits of regulation may be real, as with the prevention of accident, injury, or disease, or the decrease of damage from pollution. Benefits may be subjective, as with guidelines that modify the distribution of wealth or income by means of price supports, subsidies, or transfer payments. The benefits of regulation are not without costs. Regulation of drugs may prevent the introduction of products with harmful side effects, but it may also delay the release of lifesaving products. Inspection of food may prevent disease, and safety features on cars may prevent injury, but they also raise the price of food and transportation. The benefits and the costs of regulation are generally hard to measure exactly. Whether a regulation provides a clear benefit or a clear cost is often difficult to determine. It is important to try, however, in order to help policy makers and the public make wise decisions as to whether and how much to regulate. Since the 1970s, deregulation has succeeded in increasing overall economic welfare and sharply reducing prices, generally by about 30 percent, for transportation—including air travel, rail transportation, and trucking, and for natural gas and telecommunications. Few industries remain subject to classic economic regulation in the United States. The transportation industry is one of the most well-known industries to feel the effects of deregulation. In 1887, Congress established the Interstate Commerce Commission (ICC), which regulated the railroad industry. Over time, the ICC came to regulate the trucking industry as well. The ICC licensed all truck operators, and it required new entrants to prove they were "necessary for the public convenience" in order to obtain licenses.