Economic interventionism

Economic interventionism, sometimes also called economic statism and state interventionism, is an economic policy perspective favoring government intervention in the market process to correct the market failures and promote the general welfare of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud and enforcement of contracts and provision of public goods. Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, or addressing market failures. Economic interventionism, sometimes also called economic statism and state interventionism, is an economic policy perspective favoring government intervention in the market process to correct the market failures and promote the general welfare of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud and enforcement of contracts and provision of public goods. Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, or addressing market failures. The term intervention assumes on a philosophical level that the state and economy should be inherently separated from each other; therefore the terminology applies to capitalist market-based economies where government action interrupts the market forces at play through regulations, economic policies or subsidies (state-owned enterprises that operate in the market do not constitute an intervention). The term intervention is typically used by advocates of laissez-faire and free markets. Capitalist market economies that feature high degrees of state intervention are often referred to as mixed economies. Liberals and other advocates of free market or laissez-faire economics generally view government interventions as harmful due to the law of unintended consequences, belief in government's inability to effectively manage economic concerns and other considerations. However, modern liberals (in the United States) and contemporary social democrats (in Europe) are inclined to support interventionism, seeing state economic interventions as an important means of promoting greater income equality and social welfare. Furthermore, many center-right groups such as Gaullists, paternalistic conservatives and Christian democrats also support state economic interventionism to promote social order and stability. National-conservatives also frequently support economic interventionism as a means of protecting the power and wealth of a country or its people, particularly via advantages granted to industries seen as nationally vital. Such government interventions are usually undertaken when potential benefits outweigh the external costs. On the other hand, Marxists often feel that government welfare programs might interfere with the goal of overthrowing capitalism and replacing it with socialism because a welfare state makes capitalism more tolerable to the average worker. Socialists often criticize interventionism (as supported by social democrats and social liberals) as being untenable and liable to cause more economic distortion in the long-run. From this perspective, any attempt to patch up capitalism's contradictions would lead to distortions in the economy elsewhere, so that the only real and lasting solution is to entirely replace capitalism with a socialist economy.