The essay is about the pros and cons of various economic Essay
The essay is about the pros and cons of various economic systems and the governments influence within them. The title can be stated as: To what extent should the government regulate the economy ? By Indian In a public enterprise economy, the government has the power to nationalize any or all industries which can lead to devastating consequences. One the countries famous for doing this was the Soviet Union. Joseph Stalin, the then dictator of the Soviet Union instituted two domestic policies that would eliminate any capitalism in Russia. He would institute rapid industrialization and the acclimatization of agriculture.
This would be known as the Five Year Plan. Stalin wanted to change all private owned farms into state owned farms as he thought this would improve agricultural productivity. This grain was then expected to feed all the urban workers and any surplus would pay for programs and factories related to industrialization. He would put down a certain quota that the farmers needed to reach by a certain amount of time. However the farmers were not allowed to take grain away from what they were growing for the state until they met the quota. This led to a massive famine of 1932-33
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At first the peasants resisted the idea of collective farms and so Stalin purged the land of any that opposed it. In 1929, Stalin needed to finance his industrialization plans so he raised the quotas of grain in the Ukraine by forty percent. By raising the quotas so high, the farmers would not be able to produce enough food to feed themselves and as it was illegal for them to take any until the quotas were met. Those farmers that did not appear to be starving were suspected of hoarding grain. In the end the death toll in the Ukraine was over six million people dead.
This clearly shows how when the government has the power to nationalize industries like agriculture, devastating results can occur. The Russian government was trying to progress itself forward economically at any price even the death of its citizens. This type of government presence in the economy should not be promoted due to the serious problems it can cause. In a system that promotes Ergonomics, lower end families get less social services due to less government intervention. In the sass’s in the United States, Ronald Reagan was elected president and vowed to cut taxes, reduce government intervention in the economy and balance their budget.
He thought this would encourage people to buy more and thus boost the economy. At first he cut twenty five percent from the income tax which to many would be a good thing. However families that earned 10 000 dollars a year only saved about 120 dollars in taxes while families that earned over 80 000 dollars saved nearly 15 000 dollars. By cutting taxes across the nation, he had to reduce money given to social programs, some of which many would help the poor more than social programs did before. Between 1983 and 1985 Reagan cut funding by 30 billion dollars, all of which was set aside for programs to help the poor.
Certain programs like Medicaid, a service which helped pay medical bills for millions of people received a two billion dollar cut. This would result in many people losing their coverage and thus they would have to pay these bills on their own, something which many people could not do. By this time there were nearly thirty five million people who were considered to be poor and another thirty million who were near poor. Other cuts included millions of children being cut from recasts and lunch services offered by schools, many of which needed this food as they could not afford anything else.
This clearly shows how too little government intervention can be very devastating to those with lower incomes. The Reagan Administration set out to boost the economy but ended up making things worse for over 60 million Americans. They wanted the poorer people to work harder in order to be able to support themselves more and rely on the government less. In the end too little government action can result in unfavorable circumstances for many people so he solution could be to have more government intervention.
In an economy with very little government involvement, there is competition that allows for high quality goods to be produced. In today’s world technological companies like Sony, Philips, C.V., Panasonic and others seem to be competing the most among The computer industry is definitely one of those sectors in which the majority of this competition takes place. Companies like Dell, Intel, and many others are always trying to buy over new customers with all the new technology. In order to get all these customers, these companies are constantly reducing something bigger and better so that the average person can afford it.
In recent years Alienate has been offering very high end computers that are used almost strictly for computer gaming. There has also been Dell which offers nearly the same however some of the hardware that comes along with Dell PC’s isn’t as good as some of the parts on Alienate computers. However Dell has sold millions of PC’s over the past few years and has nearly tripled the sales of Alienate computers. This is all due to the prices and service that both PC companies offer. Both provide two ear warranties and around the clock technical support.
The best Dell PC offers high quality video cards, lots of memory, speed and a monitor included for around two thousand dollars Canadian. If you buy the PC off their internet site you receive an immediate 200 dollar discount as well as a free upgrade to a component such as a bigger monitor. The Alienate PC sells its PC unit for around three thousand American which is around five thousand dollars Canadian. It offers all the latest hardware so the fastest speed, the fastest video cards, the most memory and cases that are custom painted.
All these parts may be the best there are but the Dell computers offers parts that are only slightly worse than those of the Alienate. Due to the fact that the Alienate parts are all brand new, a consumer pays nearly three thousand dollars more for the Alienate. This is also why Dell computers sell much more than Alienate. Due to the fact that computers are so versatile these days, parts can be changed at any time to accommodate the consumers demands. By fifty percent. This example shows how competition between these and other companies in the computer industry keep coming up with new hardware and technology.
In this case where there is little to no government intervention, the PC companies keep the industry afloat and due to all the competition among them, there aren’t any monopolies controlling it. In cases like these government intervention should stay limited to allow the industry to flourish on its own. In an economy with too little government intervention, monopolies can form and dominate the market. Monopolies can be defined as being companies that dominate a market in a capitalist economy where there isn’t any competition. N the mid to late sass’s there wasn’t any legislation in the United States that prevented monopolies room forming as they never thought they would occur. However an ambitious young man by the name of John D. Rockefeller changed all of that. At first he set out to be part of the oil business but soon found out that the most money was made in refining oil as it held the lowest risks. During this time the price of oil Jumped up and down constantly from time when it was twenty dollars a barrel to times when it was ten cents a barrel. Len 1870 Rockefeller struck a deal with many refining companies and united them together’ n the state of Ohio.
At this time he was refining only about five recent of the oil output. Soon however that number grew as he constantly struck new deals with various companies to give his cut backs. One in particular was the railroad company, in turn for letting them transport his refined goods they would give him information about competitors shipments. This greatly aided Rockefeller in waging lengthy price wars that would devastate competitors. By the sass’s he united all his refineries to create the Standard Oil Trust. By this time he controlled ninety to ninety-five percent of all refined oil in the United States.
With all this power and lath he soon expanded to other areas of the oil sector including extraction, transportation, research and marketing. As he controlled all of these factors he was able to drive his competitors into bankruptcy and then buy them out. Near the end of the century Standard Oil made is almost impossible for new companies to get started as he would repeat the same thing over again. However the American government finally caught on to what Standard Oil was doing and filed a lawsuit against them as they were in breach of the Sherman Anti-Trust Act. Due to the abuses that Standard
Oil created to the economy they were dismantled into over thirty companies. This shows us how with too little government involvement during the sass’s to the sass’s allowed for this massive monopoly to form and utterly crush all competition. When a society has monopolies like this leading a sector of it’s economy, nothing but abuses and sabotage can happen. The government should have intervened more during that period to prevent Standard Oil from growing to be that big. There was definitely too little involvement by the government and it should not be promoted in any economy.