Relations Between Market Economy and Civil Government

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Table of Contents

Introduction
Political and Economic Regulations
Government Action from the Perspective of the Economic Theory
Government Action from the Perspective of the Christian Ethics
Conclusion
Bibliography
Footnotes

Introduction

The role of the government in the development of the state economy and the evolution of its markets needs to be revisited in order to evaluate the opportunities for positive change. The system of capitalism, which has been in place for centuries, has been working very efficiently so far it despite producing numerous issues, including inequality and the lack of opportunities for minor companies.

Socialism, in turn, offers rigid control over the market, which means that the governmental supervision may assist in addressing some of the current concerns and regulating trade-based relationships more successfully. Overall, the control that the government exerts over the market needs to be curbed so that private entrepreneurship could evolve. Although socialism offers greater control and, ultimately, more certainty in managing the market, capitalism provides greater freedom, which is much more important for structuring market relationships properly.

Political and Economic Regulations

The introduction of legal standards that allow coordinating transactions within markets is one of the foundational reasons why as a concept, governmental intervention in the economy is an important and desirable phenomenon. However, when the government seizes control over every aspect of market relationships, it stifles economic growth, depriving companies of the opportunity to develop independent and flexible business strategies.

Infrastructure and the Government

Although the introduction of laws and legal standards for managing economic transactions is one of the governmental functions that it mentioned most often when considering the issue of governmental intervention into the market, the changes that the state makes to the infrastructure are also very noticeable and having a significant impact on companies’ performance. In turn, the role that infrastructure considerations play in business and especially in international collaboration is not to be underrated at any cost.¹

In turn, government authorities may need to learn about the specifics of companies’ performance, the characteristics of the industry, and other factors before making changes to the infrastructure.² As a result, the alterations such as the increase in the management of logistics, communication between suppliers and their customers, and many more processes will be improved.

However, the specified opportunity does not imply that governments tend to use it often. For the infrastructure to be improved in the way that facilitates faster business development, one needs to be fully aware of every aspect of the transactions and processes that occur within the said business and its industry. While governments can have general knowledge about the latter, the unique processes taking place in companies are typically unfamiliar to government authorities. Even if the latter are made aware of key issues, most of the nuances will fly over their heads, which means that a lot of opportunities will be overlooked. ³ Therefore, the role of the government in improving the infrastructure is mostly nominal and typically concerns very generic changes.

Equity Promotion as the Focal Point

Finally, the civil government play a critical role in promoting equity within the target setting. The role of the government as the vehicle for increasing the levels of equity has is quite big given the opportunity to shape the existing policies and affect the representation of vulnerable groups. At the same time, it is important to keep in mind that socialism in its essence erases important individual characteristics, thus preventing the principles of equity form being introduced into relationships. As a result, the interactions within a market may be impeded heavily by the attempt at an artificial rearrangement of resources and the intrusion into the natural processes with the help of which the market regulates itself.

In essence, the concept of equity is not alien to the capitalist market; quite the contrary, once the notion of equity is established, opportunities for collaboration and effective management of trade processes will become possible. Therefore, as a model for improving market relationships, socialism is unlikely to lead to possible outcomes due to the unnatural changes made to the target economic setting.

Government Action from the Perspective of the Economic Theory

Economic Intervention as a Necessary Regulatory Measure

In order to explore the effects of the state intervention into the market environment, one will need to apply several theoretical perspectives to the specified issue. As emphasized above, the use of governmental interventions is often seen as a powerful regulatory mechanism that allows keeping the interactions in the market within the set limits. As a result, the participants cannot overstep the set boundaries and engage in fraudulent activities. Therefore, in the specified scenario, the government action is necessary in regulating the market since it addresses inequalities in the market and leads to the corrections of specific problems.

In turn, the latter may arise as a result of misbalance in market characteristics such as employment rates, demand and supply, and other essential factors that define the choices made by the parties involved in economic transactions. Therefore, applying the socialist theoretical framework, one will realize that the government has an important function in regulating markets.

Government Intervention and Neoclassic Theory

Approaching the issue of government intervention from the standpoint of the Neoclassic Theory, one will have to accept the fact that markets are typically self-sufficient and capable of regulating themselves. According to the main tenets of the Neoclassic Theory introduced by Thorstein Veblen, markets are natural and spontaneous as economic phenomena, which renders any governmental intervention into their internal processes meaningless.⁴On the one hand, the described perspective allows for a healthy development of trade. On the other hand, the Neoclassic Theory implies that markets also incorporate the inherent sense of right and wrong when it comes to addressing various dilemmas.

However, the Neoclassic Theory is not the only way of looking at economic relationships. While the framework in question can be considered a legitimate viewpoint, it still lacks the support of appropriate evidence. In fact, the one that can be collected by observing the current economic landscape indicates the opposite, pointing to the fact that the socialist principles would have destroyed the opportunity to develop business and offer companies the room to breathe and be innovative.

Therefore, the introduction of the government action as the countermeasure against the possibility of unethical projects implemented by some companies to take the helm in the target market should be considered as unnecessary. Although the government action can become a moderating tool that alleviates the risks of fraudulence. it is only true in the situations that imply the government’s complete understanding of the basic principles of market relationships and the necessity for companies to evolve. Indeed, applying the principles of the Keynesian Economic Theory framework to the target setting, one will notice that the government is most likely to impede the development of healthy economic relationships.⁵

In addition, to understand the power dynamics within the economic realm, one will need to consider the extent to which the key participants of the said relationships influence each other. According to von Mises “For the government, in operating these enterprises, is subject to the supremacy of the market, which means it is subject to the supremacy of consumers.”⁶ Therefore, there is a tangible influence that market has on the government and its decisions. Moreover, the importance of the choices made by consumers define the efficacy of companies and, consequently, the performance of the state, primarily, its GDP⁷. Thus, integrating the principles of moral values into the target environment and promoting honesty and trust as the building blocks for effective economic development becomes a crucial goal.

Government Action from the Perspective of the Christian Ethics

Promotion of Moral Values: Containing the Threat of Fraud

In light of the issue discussed above, the significance of the government action gains extra significance when viewed from the position of Christian ethics. Since the significance of fairness and unity is reinforced in Christianity, the government action in this case can be seen as the measure aimed at guiding participants of economic transactions. As a result, the decisions made in the process will align with the standards of Christian morality, which suggests equal and fair treatment of fellow Christians.⁸ Therefore, from the perspective of Christian ethics, government action is an absolute necessity as the means of supervising the economic environment and preventing fraudulent actions from taking place.

Christian Church and Anti-capitalism: The Basis for Socialist Ideas

However, when aligning the capitalist principles with the needs and values of the participants of market relationships, one should remember that there is an inherent contradiction between the interests of the market and the general postulates of the Christian ethics. Namely, the very essence of the Christian Church can be considered as anti-capitalist, with the emphasis on sharing and the promotion of global well-being representing the goal that is unattainable by capitalist standards.

In fact, the Christian Church has made several important statements defining its negative position toward capitalism and lenience toward socialism. For instance, Pope Francis has criticized the current technological paradigm heavily, outlining its negative effects on thee environment and encouraging the transfer to the previously accepted mode of economic issues management.⁹ The described contradiction may impede the promotion of capitalism as the healthiest approach toward managing and navigating market relationships, which suggests that a compromise should be located.

In fact, the influence of the Church may become the foundation for prompting the government action, which is a rather undesirable outcome for the parties involved in business interactions. Thus, the issue of capitalism and the Church needs to be examined a bit closer.

When Church Approves of the Government Action

To a certain extent, the ideas that the Christian church promotes have a lot in common with those of socialism. Therefore, in most scenarios, the church is likely to prompt the development of socialist interactions within the market. With a strong ethical paradigm that nullifies the possibility of capitalism-geared competition in the market, it creates the perfect premises for the creation of the socialist economic structure.

Moreover, the focus on unity, which has been at the helm of the Christian philosophical ideas for quite long, the socialist thinking is likely to be spread in a most efficient way across the community, encouraging people to accept the said notion. Therefore, from the perspective of the Christian Church, when the government’s policies align with the foundational tenets of the Christian philosophy and the essential Christian values, the government action is more than desirable.

However, since socialism is unlikely to have a healthy effect on the development of the global market, as established above, it is necessary to find a compromise between the position of the Church and the needs of the modern global market. With the promotion of socialist views, the threat of having the global market being stifled by the principles that encourage the governmental intrusion into trade relationships increases exponentially. Thus, a compromise between the views of the Church and the current trends in the global capitalist market have to be identified.

The focus on what constitutes the core of the Christian philosophy might be a reasonable solution to the identified concern. As explained above, the Christian Church represents a contraption of multiple philosophies and ideas, yet the ore values that it represents are fairly simple and easy to follow. Namely, the ideas of compassion, unity, honesty, support, and integrity as the foundational principles of Christianity can and should be incorporated into the modern market economy. With the specified notions, the foundations of capitalism will remain in their place, while the key threats that are inherent to the capitalist market will be contained. Thus, the delicate balance between the principles of the Christian Church and those of the free trade will be established and maintained.

In addition, it is worth keeping in mind that the principle of the separation of the church and the state exist for a clear reason. Specifically, to avoid cross-cultural confrontations, it is important for the government to maintain neutrality toward any religion without promoting any of them, including Christianity. The adoption of Christian values will imply that the rest of the postulates of the Christian religion need to be accepted into the framework of the government’s decision-making and functioning, in general, which will disrupt the balance established to encourage diversity and equality.¹⁰ Therefore, the separation of the church and the state needs to continue, which means that the application of Christian values directly to the management of economic relationships and decision-making is barely possible.

Conclusion

The relationships between market economy and civil government have been admittedly convoluted and rather strained due to the presence of conflicting interests, which suggests that the capitalist model should be preferred to the socialist one when establishing business relationships. While the participants of market relationships strive to implement the principles of free trade and encourage the development of regulations for promoting the development of trade, government often reduces the extent of experimentation with economic options.

The specified role that the state authorities play in moderating marketing relationships is understandably frustrating to companies and is believed to inhibit business development. The specified issue suggests that the extent to which the government defines business development should be restricted to the creation of general environments for positive trade relationships and the development of regulations that prevent companies from engaging in fraudulent actions..

Therefore, although the government action should not be underrated when it comes to addressing market relationships, one should remember that, when taken to an extreme, the increase in governmental control lads to deplorable outcomes, including the drop in companies’ performance, mainly due to the government’s lack of perspective and deep understanding of market processes. Therefore, the influence that the government action has on economy can be considered as neutral, with the importance of ethics and the promotion of collaboration and unity remaining some of its most important functions.

The specified argument means that the socialist framework for managing market interactions is less applicable to the idea of free market and compliance with people’s freedoms, including the freedom to participate in entrepreneurship than that one of capitalism.

Bibliography

Casado-Perez, Vanessa. The role of government in water markets. Taylor & Francis, 2016.

Diesing, Paul. Science and Ideology in the Policy Sciences. New York, NY: Routledge, 2017.

Ekstedt, Hasse. Economics, Ethics and Power: From Behavioural Rules to Global Structures. New York, NY: Routledge, 2018.

Robinson, Nathan J. Why You Should Be a Socialist. New York, NY: St. Martin’s Publishing Group, 2019.

Sunstein, Cass R. The ethics of influence: Government in the age of behavioral science. Cambridge, UK: Cambridge University Press, 2016.

von Mises, Ludwig. Economic Policy: Thoughts for Today and Tomorrow (3^rd edition). Auburn, AL: Ludvig von Mises Institute, 2006.

Wells, Samuel and ‎Ben Quash. Introducing Christian Ethics. New York, NY: John Wiley & Sons, 2017.

Footnotes

Vanessa Casado-Perez, The role of government in water markets (Taylor & Francis, 2016): p. 7.
Ibid.
Ibid.
Paul Diesing, Science and Ideology in the Policy Sciences (New York, NY: Routledge, 2017): p. 152.
Ibid.
Ludwig von Mises, Economic Policy: Thoughts for Today and Tomorrow (3^rd edition) (Auburn, AL: Ludvig von Mises Institute, 2006), p. 13.
Nathan J. Robinson, Why You Should Be a Socialist (New York, NY: St. Martin’s Publishing Group, 2019), p. 21.
Samuel Wells and ‎Ben Quash, Introducing Christian Ethics (New York, NY: John Wiley & Sons, 2017): p. 250.
Cass R. Sunstein, The ethics of influence: Government in the age of behavioral science (Cambridge, UK: Cambridge University Press, 2016): p. 5.
Hasse Ekstedt, Economics, Ethics and Power: From Behavioural Rules to Global Structures (New York, NY: Routledge, 2018): p. 106.

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