Scholars have not yet come to a consensus about the relationships between the government and the private sector. The main question is whether the state should intervene in the distribution of wealth and commodities or not. Approximately, twenty years ago, the United States of America chose the policy of non-intervention, and adhered to it until recent events, particularly the world economic crisis, which eloquently demonstrated that such an approach might eventually have detrimental consequences. Naturally, market economy gives certain independence to private enterprises, but probably the role of the government should not be limited only to observing, because its primary function is to regulate the relationships in the society. People, who object to the government intervention, often argue that private enterprises are quite able to resolve their problems on their own, however, as recent events have proved the states assistance may sometimes be very helpful.
Probably, it is necessary to present different views on this problem. For example, Robert Reich in his essay “Why the Rich are Getting Richer and the Poor Poorer” discusses this issue in terms of global economy. He says, “All Americans used to be roughly in the same economic boat. Most rose or fell together as the corporations they were employed became more productive and languished”(Reich, 1).The author mostly focuses on the process of globalization, in his opinion; American companies are inclined to offshore production to developing countries, and it results in the unemployment among the United States workers. Additionally, Reich analyzes constant computerization of US production, making human resources virtually unnecessary. Certainly, one cannot deny that such dynamics is a natural course of events, but Reich does not propose any amendments to the situation, which has recently emerged. His views on the problem of poverty remind Darwin’s natural selection theory, according to it, only the strongest can survive or “swim” as Reich puts it. For nearly twenty years, the government of the United States has pursued such laisser-faire police and let those, who cannot swim, sink.
It stands to reason that competition is a necessary condition for further development of the society, but it does not mean the state should focus only on short-term bets. Perhaps, investments in those companies, which are now on the verge of bankruptcy, can break even and even pay dividends. Unfortunately, the government of the United States resorts to intervening measures only in the cases of emergency as for instance “the Great Depression” or recent crisis.
The opponents of such approach can say that the government intervention may result in its dominance over the private sector and that blatantly violates the Constitution of the United States. Nonetheless, it should be taken into consideration that the Constitution does not prohibit the state to assist those companies, standing on the brink of financial meltdown. Moreover, it can be done not only in the case of emergency (economic crisis) but on the regular basis.
The philosophy of non-intervention has been subjected to heavy criticism by such scholars as John Galbraith. In his many works, he expresses the opinion that the government has the right to influence the private sector. In his article, “The Position of Poverty” he discusses the causes of this social phenomenon and analyzes the attitude of the government to this issue. Galbraith says that there is the so-called “insular poverty”, or a group of people closely associated together, who live beyond poverty level (Galbraith, 2). In his opinion, the main cause of this phenomenon is the attitude of the government to this issue, in other words, the state simply turns a blind eye to them.
The question arises whether the government should act as an equalizer. As we know, in the course of history, certain attempts have already been made to restore the equilibrium between the upper and lower classes (or the rich and poor, to be more exact), but these attempts lead to violence and bloodshed, as for instance, in the Soviet Union. This is the main argument that the supporters of non-intervention philosophy may advance. In addition to that, they may say that people are not created equal in terms of intelligence, talent, diligence, etc. At first glance, it may seem that such explanation is quite logical, but it does not account for the existence of the so-called “insular poverty”
According to John Galbraith, the main reason for it is poor education and employment opportunities (Galbraith, 2). The author argues that it can be ascribed to the racial problem, which undoubtedly exists in the American society, though it seems that there is some other reason. Unwillingness of the government to support those, who live in such “poverty islands”, creates a vicious circle, very difficult to break. The concept of intervention does not imply redistributing the wealth or commodities, it can be interpreted as assisting the people, who urgently need it.
Among the measures that should be taken, it is possible to single out the following ones, first, as Galbraith suggests the government should offer educational opportunities to the children, whose families living beyond the poverty level (Galbraith, 3). Naturally, there are scholarships and grants, supposed to help them, but they are insufficient. It seems that the United States of America can afford to make such step. Providing additional funding to the educational institutions cannot be quickly repaid, but the United States has always focused on long-term results.
The main problem that the US government may face in the near future is the necessity to make heavy investments in the public sector, for example, transport, housing or educational institutions. However, it is not an overwhelming task, which can never be accomplished, because the economy of the US has many resources in its possession, but it seems they have never been fully used. Recently, the United States has attached primary importance to the external problems, such as the War in Iraq, whereas internal concerns of the country appear to be ignored. The main task of the newly elected president, Barack Obama is to reorder the countys priorities, and make the government focus on the problems that are currently more stressful than the war with terrorism.
It should be borne in mind that separate attempts of the government are not enough for eradicating poverty, a considerable shift in the public opinion, especially the attitude towards the lower classes, should be made. As a rule, people are inclined to disregard what seems to them unpleasant or annoying. Very often, we make ourselves believe that the problem of poverty does not exist, and try to fence off it. Probably, it is necessary to understand that it is a disease, which may eventually lead the society to the collapse.
Bibliography
John Galbraith. “The Position of Poverty”.
Robert Reich. “Why the Rich are Getting Richer and the Poor, Poorer”.