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Certainly the invisible hand works most of the time to drive an economy stronger. But there are cases where government regulation is necessary to protect its citizens. Environmental regulations to control industrial pollution is one example. We have seen that the banking system does not have the built-in "checks and balances" normally in play with the the invisible hand (ie, pure capitalism). So long as government recognizes its role is to protect the citizens, and business recognizes that the government does have that role, then everything is fine. The problem arises when government becomes too altruistic and starts to look after the citizens like a mother hen watches over her chicks. Excessively generous social programs a even controlling the size and scope of government are examples where little by little the government becomes too large and too generous. It is one thing to provide a safety net for the nation's poor. It is quite another to try to "balance" society with income redistribution and overly generous social programs for those people at the bottom of the economic pyramid. All nations can expect to have people in society who cannot care for themselves, through no fault of their own. Those people need a safety net to make sure we do not have the walking dead fill our parks or seek shelter in a drain culvert. Any great nation has an obligation to provide a minimum level of help to the poor in proportion to its wealth. But there is a limit.Where you draw that fine line between vital government service and intervention and an overly protective, overly generous government intrusion into society is an eternal debate. It is important to realize that business and citizens are subservient to the rule of law as defined by the government. However, very few mechanisms are in place to control the scope and growth of government. Government has a close resemblance to Bermuda grass - it slowly but steadily spreads throughout society. The US Constitution is one of those rare mechanisms for contriol. In the final analysis, wiser heads in society must prevail and occasionally use some RoundUp to cut back the size and scope of government. This is where democracy trumps the excesses of both the government and the invisible hand - as we are seeing right now. Shall we call it the "invisible pendulum" of Democracy?
Certainly the invisible hand works most of the time to drive an economy stronger. But there are cases where government regulation is necessary to protect its citizens. Environmental regulations to control industrial pollution is one example. We have seen that the banking system does not have the built-in "checks and balances" normally in play with the the invisible hand (ie, pure capitalism). So long as government recognizes its role is to protect the citizens, and business recognizes that the government does have that role, then everything is fine.
The problem arises when government becomes too altruistic and starts to look after the citizens like a mother hen watches over her chicks. Excessively generous social programs a even controlling the size and scope of government are examples where little by little the government becomes too large and too generous. It is one thing to provide a safety net for the nation's poor. It is quite another to try to "balance" society with income redistribution and overly generous social programs for those people at the bottom of the economic pyramid. All nations can expect to have people in society who cannot care for themselves, through no fault of their own. Those people need a safety net to make sure we do not have the walking dead fill our parks or seek shelter in a drain culvert. Any great nation has an obligation to provide a minimum level of help to the poor in proportion to its wealth. But there is a limit.
Where you draw that fine line between vital government service and intervention and an overly protective, overly generous government intrusion into society is an eternal debate. It is important to realize that business and citizens are subservient to the rule of law as defined by the government. However, very few mechanisms are in place to control the scope and growth of government. Government has a close resemblance to Bermuda grass - it slowly but steadily spreads throughout society. The US Constitution is one of those rare mechanisms for contriol. In the final analysis, wiser heads in society must prevail and occasionally use some RoundUp to cut back the size and scope of government. This is where democracy trumps the excesses of both the government and the invisible hand - as we are seeing right now. Shall we call it the "invisible pendulum" of Democracy?
