Role of the State in Economic Development

Defects of the Free-Enterprise System

A century ago, there was a general bias against interference by the State in the running of industry. It was a tacitly accepted formula that the business of the government was to govern, to preserve law and order and to defend the country from invasion. Likewise, it was considered that the business of industry was to make things affordable to the consumers. Interference by industry in politics was fatal to good government, and interference by the State in industry was fatal to efficient production. Business influences, it was argued, are apt to corrupt politics; and political influences are apt to corrupt business. The wisest course for a government to follow ...

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