Role of Government in a Mixed Economy - Political environment, Business Environment Video Lecture | Business Environment - B Com

hey guys today we're gonna talk about
the role of government in a mixed
economy again download the notes I got
some charts to fill out and some
different things to kind of do today
we're gonna start with a review of our
four types of economies once again and
then we will cut over into the role of
the government and our mixed economy in
the United States alright so let's get
going
types of economies we have four types
all right traditional command market and
mixed and each one is unique and brings
its own things to the table and it's
important that we realize what they
bring and how they are and in what ways
they influence everything else a
traditional economy is one where there's
little trader barter a little commerce
I'm not producing to make money I'm not
producing to provide you know lots of
extra funds for myself alright I
probably don't run a business but I'm
probably focused on staying alive and
making sure that I am providing for my
family and for myself so that we can be
sufficient and live and that's a
traditional economy alright don't have
big trucks carrying things from one
country to the next it's mostly if I'm
trading I'm trading with my neighbors
all right so it's a subsistence style of
farming Inuit communities in the North
definitely use traditional economies
when they provide for their their their
people and it's one way they kind of
look at it next you're going to see a
command economy a command economy is one
in which the government owns the factors
of production and also decides what in
how things will be produced and how much
of that thing will be produced right
economy that where this is it now
there's very little say there's very
little options there's there's not a
whole lot in that economy for many
people and it's important for us to
realize that all right but but what it
does do is it allows for for the
community to provide for the community
in a way command economies were very
popular between the 1940s through the
1990s when the Soviet Union was still
around you saw a lot of command
economies in the Eastern Bloc countries
the buffer zone between
free West Europe and the Eastern Europe
under communist rule and basically
that's where we see if we look around
the world today we'll see is some
resemblance of a command economy in
China and again they're moving a little
bit away from it as well as Cuba and
those are the two largest ones that
probably most most known about so we
definitely I see them moving away from
that command economy style idea but it
is there the Soviet Union is a prime
example of it at a young age you were
determined what you were gonna be when
you grew up and where you're gonna work
and the government basically trained you
for that position without you know maybe
that's not necessarily looking at your
skills your creativity or anything else
like that a market economy is one in
which the decisions are made purely by
the markets they're not controlled by
the government they're not controlled by
by anything but what the consumers
desire and what the suppliers supply
alright so what we see with that is we
see this kind of idea that it's 100%
controlled by our supply curves and our
demand curves and it's the only thing
that makes this market happen
realistically this market does not exist
is there's not really a chance for it um
the government will always try to get it
kind of get its hands in there and want
to make sure that we are are definitely
going about making sure that this is
taken care of so this is an economy in
which decisions about production again
are controlled by the markets not by a
government not by anybody else
we're little examples are really hard to
find because it doesn't exist but you
can kind of think of maybe you know off
off government style transactions things
that the government doesn't necessarily
support or believe in could be a way to
kind of get an idea of what the market
is what a market economy is like the
last one is the type that we have here
in the United States and a mixed economy
as an economy in which the government
has some say and the government has some
say in other areas but mostly we're
allowed to kind of be predetermined big
part of a mixed economy is this idea of
entrepreneurship right if I have if I
come up with an idea I can go out and I
can set forth and I can come
I ate and I can make money all right I
know quite a few small business owners
and that's kind of what they've decided
to do is they're they're going after
that trying to kind of fit things
through and get things taken care of all
right but the government works with the
markets and they decide things now in
the United States a prime example would
be subsidies that we pay farmers for
things like milk wheat and soy all right
obviously those are things that we want
to have in our country we grow them here
but it's probably not very lucrative or
it's too costly and maybe the government
will get inside to to kind of provide
farmers with a little bit of additional
incentive to produce more milk all right
um
the government doesn't really command
anything really they just kind of wish
for these things and they provide these
things from there when we talk about the
roles of government we talk about just
basically that you know the government's
gonna be involved and you're not gonna
get away from governments it's very very
difficult to do the government will
always see itself as sort of a middleman
a mediator something along those lines
to make sure that it's getting what's
necessary getting what's needed right
the government in a mixed market economy
provides an essential role they provide
an essential role they they don't
interfere with most aspects but they do
things that protect the consumer protect
the citizenry and protect the people and
in the the goods and the services of the
nation as a whole we're gonna look at
six different roles that the government
plays in our economy of six different
things the government should be doing
and how they do it
the first one is maintaining legal and
social framework this is basically the
government's gonna set rules for
businesses and corporations to work with
them right we don't have this idea that
like I can go and do whatever I want my
competition is competing I'm just going
to you know knock them out and and take
all their things we have laws in place
and that's what the government does is
it maintains the laws set forth for
doing business so like let's say that we
have a government agency like the
Environmental Protection Agency they
could provide legal and social framework
to
attack the air from toxic chemicals and
if you decide to break it you're going
to be fine and it's gonna be the way
that the EPA tries to force you into
compliance and you start to kind of see
that so two really good examples of is
our protections of private property
through copyright law through patent law
and through intellectual property
you know the songs that you download off
of YouTube again that's probably not the
most legal way to get music I would
recommend buying it but basically you're
you're taking somebody else's private
property you're taking that recording
artists private property alright and
they want to protect the common good the
EPA protecting the environment making it
safe for everyone to live in is a prime
example of one thing that they can do to
make it so that we protect the common
gut protecting all of our people the
next is they want to maintain
competition the government will have
specific rules to relate to competition
you know ultimately the government is
trying to protect us the consumer by not
allowing one person or one company to
control the entire market for a product
what we're doing is we are allowing more
competition we're allowing more
innovation and rail allowing things to
happen in a way that's more beneficial
to the consumer it's great I can go and
I can buy a TV that's five years old
most still works but what about all
these new TVs if we didn't have this
competition we could all be buying TVs
that were five six seven 10 years old
and not know about these new
technologies these new cool things that
the TVs can do two really good examples
of this would be the Microsoft antitrust
case which we already looked at and we
kind of saw how that played out and what
ultimately happened remember write
yourself to one on the appeal that they
didn't have to break up their company
for including different parts of
Microsoft's Office and Microsoft's web
browser into the windows package next we
saw the Department of Justice reviews
mergers when we talk about airline
mergers the Department of Justice is all
over that to make sure that we as
consumers of air travel have a better
price than what could happen if we only
had one
and that's things that we've done we've
looked at these for almost a hundred
years in our country over a hundred
years we've been examining the Trust's
and the mergers of companies to make
sure that one company's not gaining too
strong of a market hold the next one is
to provide public goods and services
right this one is a little iffy and this
one gets a little more political because
the government should be providing these
goods and services but how the
government provides them can be a
different story
all right provide services that
individual businesses cannot or should
not provide the cannot is is they're not
capable of doing it because it's too
large of a scale this should not would
be if one company control that what
would happen now we're seeing a huge
huge debate around the country
discussing that neutrality with this
public goods and services should the
government step in to provide us with
net neutrality is a question that's
going to unfold over the next couple of
years all right but when we talk about
public goods and services what we're
talking about is we're talking about
goods for the use of all citizens parks
recreation areas state forests national
forests roads bridges dams you name it
if it's one of those big things like an
airport a seaport a harbor the public
good is is that item and the government
is providing it for the use of all
citizens now obviously some harbors are
meant for different things and some
airports are meant for different things
but for the most part it's all there
also public schools government's
providing for your education all right
the state government of Indiana puts a
pure pupil dollar amount on you the
student to make sure that you guys have
the opportunity to get an education so
the school takes in money for each
student in the in the building and has
to kind of balance their costs with that
there would be two examples of providing
public goods and services the next one
is to redistribute income the government
will redistribute the income from the
wealthy businesses and citizens to the
less wealthy businesses and citizens and
they'll call it something clever not
redistributing the income but there call
it a tax
all right and what will happen with this
taxing this is kind of gonna get a
little iffy but what will happen with
this tax is some of the tax money will
go to providing for the federal
government other parts of our tax would
go to providing for health care for
people providing for social security
retirement for people providing for
different different things for different
people all right and we may see it also
with subsidies to make sure that we're
kind of doing that all right but when we
look at this we're talking about food
assistance programs and tax returns if
you work for the whole year and you pay
more taxes in but the government decides
you should they'll give you back that
money if you don't work you might get a
welfare it's checker or food assistance
program to make sure that your what
you're able to eat and it's really
important because the government is
doing this to provide for its citizens
all right to provide for that domestic
and tranquil safety of all citizens like
the preamble it says and they're doing
it in a way that is kind of difficult
and different and things that become
very political eyes so what you see with
that is you see this idea of the
government taking some things and
providing it for them so I pay my taxes
all the time and you know every year I
tend to get money back it's just the way
that works the withholding that we do is
is we are withholding enough that you
know we ultimately have to pay amount in
taxes and my wife and I pay over every
year we need to also stabilize the
economy that's one thing the government
needs to do the government maintain and
the economy and try to eliminate swings
like big ups and downs in the economy
recessions and depressions and peaks and
expansionary systems and we're going to
talk about that coming up but basically
the government will maintain it and try
to do its best the government does not
want large changes a big swing and
unemployment is bad right a huge swing
and inflation is bad we want to make
sure that things like unemployment and
inflation excuse me are staying very
steady and and allowing for that so when
people become unemployed and besides
that unemployment insurance which would
be redistributing the income
we see things like job training programs
or we see the Federal Reserve but we're
gonna jump into the Federal Reserve and
talk about the Federal Reserve probably
after Thanksgiving but the Federal
Reserve does quite a few things to
provide and stabilize the economy and
the economy is really bad the Federal
Reserve created in a way not literally
but in a way more money for the citizens
to have and then ultimately when it was
when the economy started to get better
they started to pull some of that money
out of the economy to keep things you
know nice and balanced and that's how we
see the stabilization of the economy
when we talk about that so it's really
important that we see a stable economy
it makes a government feel good it makes
it everybody feel good the last one is
to correct externalities and this will
be to take steps that make the
consequences of actions in the economy
less less strong less dangerous less
impactful then before government doesn't
want to see issues that like if one
company closes and they're like seven
other companies have to close because
they all supply the large corporation so
what they'll do is they'll make sure
that these things are corrected and
they'll do things like bailout General
Motors bailout Chrysler all right so
that when you see these American car
makers what you see is you see this idea
that you're starting to kind of have you
know the government protecting these
things and making sure that these things
are are good to go the last one would be
the American Recovery and Reinvestment
Act of 2009 the stimulus package we
tried to to correct the economy
correctly externalities during that
period by providing people with job
training job programs road construction
so forth and so on to make sure that we
could see our economy growing in a way
that we really wanted to see it grow in
summary we talked about the four types
of economies the command the traditional
the market and the mixed and we also
talked about the six roles of government
including maintain a legal and social
framework maintain competition for
public goods and services redistribute
income stabilize the economy and correct
externalities now we will continue
talking about these and groups of two
over the course of the next couple days
all right which will take us through the
end of next week and we will be on
Thanksgiving break so thanks for
watching I appreciate it I look forward
to seeing you guys take care