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The U.S. economy has traditionally depended on low government intervention to allow markets to work naturally....

The U.S. economy has traditionally depended on low government intervention to allow markets to work naturally. Discuss the theoretical background of this tradition. Does this tradition continue in contemporary markets, and do you think it is a healthy, advantageous tradition?

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The theoretical background is Adam smitths invisible hand. According to this theoretical model everybody led by his individual interests will led to maximum social and individual welfare. Therefore these Economists recommended laissez faire.yes it continues in contemporary markets although there are some restrictions. The great depression of 1929 and recent financial crisis of 2009 proved that no intervention policy is not good. Even Alan greenspan the champion of free markets called for intervention. But too much intervention like in case of ussr can be disastrous. The govt should regulate mainly through incentives and checking exploitation and unfair trade and monopolistic practices

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