When it comes to identifying the role of government in their conception of the market order, many if not most “conservative” economists still assume that government must be responsible for a social safety net that includes Social Security, some form of government-provided health care, and unemployment compensation; must have discretionary monetary and fiscal powers to support supposed desired levels of employment and output; must regulate industry to assure “competitive” conditions in the market and “fair” labor conditions for workers; and must directly supply certain goods and services that the market allegedly does not provide.
Indeed, many people who claim to be “on the right” believe that government should institute some or all of these “public policies.” It should be appreciated, however, that the very notion of “public policy,” as the term is almost always used, supports government intervention in the market in ways that are simply inconsistent with a genuine free market economy.
Interventionism as public policy is not consistent with the free market since it intentionally prevents or modifies the outcomes of the market. Here are the eight points of the interventionist economy:
The private ownership of the means of production is either restricted or abridged by government.
The full use of the means of production by private owners is prohibited, limited, or regulated by government.
The users of the means of production are prevented from being guided by consumer demand through a network of government regulations, controls, prohibitions and restrictions.
Government reduces the impact of market supply and demand on the success or failure of various enterprises while increasing the impact of its own influence and control through such artificial means as price and production regulations, limits on freedom of entry into segments of the market, and direct or indirect subsidies.
Free entry into the domestic market by potential foreign rivals is discouraged or outlawed through import prohibitions, quotas, domestic content requirements, or tariffs, as well as capital controls, and restrictions on freedom of movement.
The monetary system is regulated by government for the purpose of influencing what is used as money, the value of money, and the rate at which the quantity of money is increased or decreased. And all these are used as tools for trying to affect the levels of employment, output, and growth in the economy.
Government’s role is not limited to the protection of life, liberty, and property.