Describe the size of the government in capitalism?

Answer 1

There is not one particular size of government in a capitalist society. In laissez-faire capitalism, the government would have few if any roles, since the underlying theory is that the market controls all.

What we typically call "capitalist" countries, such as the U.S, Britain, Japan, etc, all have different levels of governmental involvement in society, depending on how they evolved and what their citizens want. Of the large, market-oriented economies today, the U.S. probably has the most liberal (as in not imposing controls, not politically) government. Even here we have extensive government involvement, through the Treasury Department, the Federal Reserve, and other economic institutions.

The next question is how big government in a free market economy should be. In my view, we do need some government involvement in the economy to curb the excesses and to establish stable conditions. Monopolies are not the optimal form of business, and government is necessary to keep these from happening. Patent protection, which would not occur in a "pure" capitalist system, is good for society and for the economy overall, needs to be enforced by a central government. Many costs of production are not explicitly borne by the industries that make them, such as pollution, and environment degradation, and need to be mitigated by government. Without regulation, we could see bank failures and financial instability. Alos, many people would not agree with what occurs to those at the margins of society without any governmental intervention.

While I would argue that the government in the U.S and other countries has become larger than it needs to be, there is a place for it in the economy, and so it must be of some size to ensure the market remains vital and that people have the best opportunity to succeed.

Answer 2

In laissez faire, which is the truest form of capitalism, there can still exist a government, only this government would have no control over the economy, and would do absolutely nothing to regulate it/ stimulate it. This is what is called a market driven economy, where competition and consumers determine the best prices for goods.

Answer 3

the government really shouldent have any input in the economy, other then a minumum wage, but the green movement have forced that,along with unions getting too much power, thats why american car componies r goin under, becuase of the unions, they cant make any money due to high pensions