Governments intervention in the economy of a state or country is not a new phenomenon. This intervention has been the reason for the fail and growth of many economies based on the intervention and the measured applied and to what extent. Many nations’ founding fathers’ designed road maps for how the economy would shape according to the vision they had for their states. The ultimate goal of this was to see growth among its citizens and return the country as well.
There are two schools of thought regarding government interference in the economy; those who agree with it and those who disagree with it. According to President Roosevelt, the need for government interference in the economy was by way of recruiting more workers and adding to the labor force of the state.[1] Many unutilized resources can be reorganized and appropriated properly. Nature offers her bounty, and the efforts made by people have only improved it. However, for these activities to bear fruit, the government has to impose strict supervision of banking, credit, and investments and an end to speculation with other people’s money. International trade relations come secondary to building a strong national economy as these relations rely very strongly on a state’s ability to transact with another.
The government has a responsibility towards its people in ensuring that their work is valued, such that the amount of work they do is proportional to the wages they enjoy. Theodore Roosevelt mentions that a man cannot be a good citizen unless he has a wage more than sufficient to cover the bare cost of living.[2] He believes that the right to regulate the use of wealth is in the interest of the public. For the government to run, its citizens have to be willing to enjoy the rule that it provides. In that sense, the government, by regulating labor laws, women, and child labor laws both in the state and nationwide, can ensure that the citizens can sustain an acceptable standard of living.
There are also those of the school of thought that government intervention in the economy only weakens the citizen’s rights. President Herbert Hoover is one of these schools. He explains that decentralizing government services seeks to strengthen communities’ liberties. The opposite means that communities agree to subject themselves to bureaucracy without their voice and control of their destiny. The government was devised that through ordered freedom, every man has equal opportunity to reach their highest achievement to which he is capable.[3] On the other hand, government centralization restricts individual opportunities, and its spread destroys initiative and character. This character is incorporated into an individual and the community by assuming responsibilities and not escaping from them, in this case, by giving them to the government. This shouldering of responsibilities on the government may lead to creating a superstate where every individual is a servant of the state. This is a state where presidents like Lincoln did not want to bring about.
In Lochner v New York, the purchase of labor is protected by the fourteenth amendment, but exercising such power is limited by the state.[4] The state dictates the hours in which one can work, thus constituting legal days’ work. This means that even for special circumstances in where one may need to work more hours to earn more, the government prevents one from doing so and, in so doing, limits the amount of money one earns. These interventions are based upon health, morals, and safety. They, however, show that the individuals cannot contract independently on labor without government intervention that may, in some cases, prove to be a stumbling block towards growth.
The government’s intervention in the economy is only welcome until it restricts people from reaching their goals. To prevent exploitation by some individuals on others, government intervention is necessary. Labour laws enacted by the government try to ensure that employees get fair wages according to their work output. For the good of the public, the governments should not intervene in the economy. People should be let to discover on their own what works for them and what they need to do to grow themselves. This deters laziness among individuals when they realize that their development is based on their hard work and determination.
References
Theodore Roosevelt announces the new nationalism (1910)
President Herbert Hover applauds limited government (1931)
President Franklin D Roosevelt says government must act (1933)
Lochner’s excerpts “Lochner v New York, 198 U.S 45 (1905)”
[1] Theodore Roosevelt, The New Nationalism: New York,1910)
President Franklin D Roosevelt says government must act (1933)
[3] President Herbert Hoover applauds limited government (1931).
[4] Lochner’s excerpts “Lochner v New York, 198 U.S 45 (1905)”