Thursday, July 11, 2013
Economic policies of nations-3
Although in capitalism private enterprises is supreme but there are certain areas where the private enterprise refuse to participate and does not have the capacity or capital or may not make enough profit to justify its investment and that is when the government steps in and through taxes or by borrowing they collectively invest in such ventures where the public (willingly or unwillingly) become collective owners. For example defense, trains, foreign relations, security are some of the areas where the private enterprises does not want to venture into or they are restricted by their government because these are sensitive areas or they are for the collective good. Capitalism does not mean that there is free for all as the government can impose regulations if it feels that some individuals are abusing their freedom and they are not in the public interest. Governments can also restrict the entry of private enterprise where they fear that it is part of national security. So what is being practiced in the so called capitalist countries is a form of socialism with majority part of the private enterprise. In communist countries what is practiced is also some form of socialism as the government does not have the capacity or the will to provide everybody everything that they need. It should be the job of market forces and demand and supply that should determine economic policies of a state. And Economic policies should be not entirely based on one or the other ism but on the specific demands, needs and wants of the people otherwise people will find their own way to satisfy them.