Question

Proposition: The government ought to do nothing to support either small businesses or fast-growing businesses, but let the market decide among firms of all kinds. Support or oppose this proposition.

Answer 1

In my view I agree with the Keynesian approach which finds the role for government to play in the free market operation because if capitalism is left without any supervision it has the tendency to lead towards monopolist structure leading to socially inefficient outcome, further also from the defense and political standpoint too it becomes necessary sometime for the government to intervene in the free market operations For Example Government may wants to avoid the market consolidation by an organization from hostile nation in critical product/ services.

Also, in terms of nascent industry or small businesses sometimes it is essential from the government stand point to protect and develop them by interfering through tariffs on imports so that allowing the industry to grow and in future the social cost in terms of higher consumer cost can be covered through higher output and efficiencies .