question archive Why would people who basically favor free markets seek government intervention into the operation of those markets?
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Why would people who basically favor free markets seek government intervention into the operation of those markets?
Free-market is a type of economic system in which the price and quantity of goods and services offered in the market are purely determined by the market forces. This type of economic system is highly vulnerable to produce market failures that have negative effects on the economy, society, and environment. Therefore, even people, who favor the free market, know that the government must intervene in specific circumstances. For instance, there are industries in which the number of firms is so small or the market power belongs mostly to one company affecting the competitiveness and the market prices. There are also some industries that the government needs to undertake because it is more efficient when only one firm operates them such as electricity, water, and gas distribution. Another example is the industries in which workers or consumers are endangered due to the quality of the product or the working conditions. In conclusion, there are specific occasions in which government intervention is necessary and beneficial for society and workers when the economic system is a free market.