by musashisamurai » 29 Apr 2018, 06:21
willie23 wrote:Is it really the Governemnt’s place to step into the economy and mess with prices and stuff? What about educating the public throughly on the dangers of over drinking alcohol...and if they wish to continue to destroy their own bodie’s then they can. Everyone has the right to do as they wish to themselves as long as it does not endanger other people or infringe on their own rights, and increasing the price on a product will not really stop the over consumption, it will only make things harder on the businesses and the poor. In the USA it is illegal to drive drunk, and that makes sense. But a minimum unit pricing seems like a solution that will not work. And from there, where does it go next?
At the same time, I am no economist. Am I missing something here? As far as Governemnt intervention in the business areas...I have always thought that the Governemnt should stay out of it.
Most Respectfully,
Willie
The government controls and sets prices all the time, often to great effect. While competition is great, not every industry or service translates well to it-for example, healthcare and capitalism as seen by comparing America to literally every other Western country-and a certain degree of policing is important. Setting a minimum wage for example is important because otherwise Ricardo's Iron Law of Wages would have a number of salaries shrink to levels that simply won't enable low-income Americans to make any money (and since those citizens are massive consumers, higher wages == better economy). Even the thinkers behind laissez-faire economics like Adam Smith (founder of economics) or Thomas Jefferson (president, huge supporter of it) knew the government needed to get involved at time. Smith pointed to the government's role in risky, high capital endeavors that had great public interest-in his day, making canals, highways, and exploring the world to find new trade routes. Nowadays, this would probably still translate to transportation infrastructure but also include emergency services and research/research grants. Jefferson meanwhile buys the Louisiana Purchase and hires explorers to traverse it.
Later in the 20th century, John Maynard Keynes was born. His economic theories, to the best of knowledge, have never been disproven. He essentially theoried that greater government, even deficit spending during recessions, would alleviate the recession and cause a resurging boom; during growth periods, governments should then save money for the next recession and spend their way out of the recession. Those theories would find some credit in the administration of FDR who used them for the New Deal, and the massive spending of WWII brought us out of the Depression. I guess you could say that the Axis used the same theory, but not for economic restoration.
In short, though, there's never been a period where the government has fully ignored the economy and many times where the government has caused large success. In my time, there have also been times where government neglect and deregulation have horribly effected the economy, such as repealing the Glass-Steagall Act and loosening financial regulations before 2008. I'm pretty sure that minimum pricing has been used in the USA/EU to help boost agriculture and maybe dairy, though I suppose that grants are more common. Price ceilings are more common AFAIK, especially with rent and insurance.
Another debate, another time, but I don't think the existence of government is one we need to debate. In this circumstance though, I think this is the Scottish government trying to impose a sin tax (which is less economic theory and more public health and political science) without the ability to impose an actual sin tax. Personally, I feel for them but raising the minimum price likely won't have the same effect as a sin tax since the new revenue can't be spent on alleviating the problem. Its like if my hometown which now does 5 cent 'taxes' on plastic bags decided the best use of that revenue wasn't some grants to promote high efficiency electronics or home improvements but instead should be used to build high pollution factories or oil wells. Its slightly worse because the sin tax half has a negative effect on consumers, and this implementation lacks the positive parts of it.
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