In a capitalist nation, there is a fine balance between the role the government plays in the economy, and how much market forces are allowed to run freely. In a purely capitalist economy, these market forces are allowed to run without any ‘check’, thus forming the unregulated business cycle. Yet this business cycle has flaws: severe ups and downs known as ‘boom and bust’. These drastic changes can lead from a time of prosperity, to one of recession, and then as it did in the 1930’s in the United States, to a time of depression, where the whole nation and the world economy was crippled. It is for this reason that the government has an obligation to play a moderate role in running a nations’ economy, helping to balance out these extremes and provide some sort of stability and security for all.

    One of the greatest tasks of the government in any society today is to provide for the needs of its people. This is why the government needs to step in and protect not only consumers, but also labourers from the dangers of an unregulated economy. In an unregulated system, such as that before the Great Depression, just about anything is possible, which usually comes at the disadvantage of consumer and workers and investors. The Stock Market Crash of 1929 showed how the unregulated buying, selling, and trading of stocks on credit could destroy a persons’ wealth when the market took a downturn. People lost everything, companies were forced to admit bankruptcy and the Republican government sat back and did nothing. The president of the United States at the time, Hoover was a Republican who believed that market forces should be allowed to fix itself with little or no intervention. The economy, however, didn’t bounce back as he expected by 1932 and in the meantime millions of Americans suffered from the Great Depression.

    Anti-trust legislation is yet another example of how the government needs to protect its people. Before legislation was passed big business monopolies were allowed to continue expanding without any sort of control. These monopolies that controlled huge sectors of the economy could drive the prices of a certain type of good up for the sole reason that they were the only company selling it. Consumers had no choice but to pay the exorbitant prices if they wanted the goods. A modern day example is the company Microsoft, whose monopoly on the computer software industry is unsurpassed. They were taken to court over this issue due to the legislation and were deemed to be too monopolistic. While they are appealing the conviction, it is large companies like Microsoft who force smaller businesses into bankruptcy and destroy competition out on the market. This reduces consumer sovereignty and erodes at the very principals of laissez-faire capitalism.

    Today most governments also protect labourers from being exploited. In the latter part of the 18th and early part of the 19th centuries, there was no legislation around to ensure that workers received a fair pay and safe working conditions. A prime example is that of Great Britain during he industrial Revolution when workers were paid next to nothing, days were long and gruelling, and they were daily susceptible to injury or death. Even today workers are still being exploited in third world countries being used to make goods for next to no pay. Companies in industrialized nations of the world maximize profit by hiring their labour out of these third world countries, and make more money than if they had hired workers in their own country. This widens the gap between the developed and the non-developed countries of the world. The government in a capitalist nation ensures that its own people are given a fair wage by enforcing a ‘minimum wage’ in all workplaces and that child labour is banned, but many companies still see a way around this. This is another flaw of capitalism which has businesses using their fellow man to make more profit for themselves and their shareholders; the ‘bottom line’.

    The free reign of market forces in an economy can lead to severe economic ups and downs. The government needs to provide a ‘safety net’ for all those at risk of being exploited by the system to ensure that everyone has their basic needs are met. In a purely capitalist nation it is truly ‘Survival of the Fittest’, but it cannot exist like that in today’s society. In 1932 when Franklin Delano Roosevelt was elected as president of the United States, he passed the New Deal. As a Democrat, Roosevelt was more willing to provide social assistance to the people than Hoover who preceded him. The New Deal provided much needed jobs and help to the unemployed and down and out of luck in the United States. Social assistance such as welfare, pensions and unemployment insurance were created during this time to help people. While the New Deal was controversial to many who though that the market economy should be left along to sort itself out, Roosevelt stood by his principles of interfering in the economy to alleviate severe hardships of millions of Americans citizens.

    It is this type of government intervention that drastically improves the lives of someone people in a capitalist nation. Instead of a government cutting spending on social programs it is imperative that there be protection for the chronically poor,, unemployed, young, aged and disadvantaged. Many say that by providing assistance to people will support laziness and get rid of the desire to move ahead that makes a capitalist nation so prosperous. This, however, cannot be the case, as at some point or another most will need some sort of assistance. By helping people out when they are in need, it produces the desire in people to go out and repay the generosity the government showed them. By showing compassion to those in need, the government is only ensuring that its economy will flourish later on as people take initiative once more to do their best.

    A prime example of a lack of government intervention in an economy that needs to be re-evaluated is the situation going o in the U.S south. When Hurricanes Katrina and Rita blew through the southern states, the significant regional disparity of the U.S was brought to the forefront. Large populations of African American people had residence in the south, and were the poor the government should have been taking care of, but instead were forgotten and left at the mercy of the weather. In their desperate time of need, as the little that they had was taken away from them the U.S government sat back for two days and opted for ‘laissez-faire’. This lack of assistance but also of humanity is why governments need to be working continually to ensure that no one is left behind. A high standard of living in a country says great things, but in a capitalist economy there is always a portion of people who are living below that standard. The benefits of capitalism are rarely seen by the impoverished that are left to fend for themselves in a vicious cycle. B no means should these people be given a free ride, but as people rebound and move up the social structure with assistance they will in turn pump more money into the economy and standard of living as a whole will go up for everyone.

    In a market economy there needs to be some sort of government intervention to keep in check the regulative forces of the market. By proving assistance to those who are unemployed, aged or disabled by means of unemployment insurance, pension and other social programs, the government is ensuring that their economies will in time have more money in them enforcing the basic capitalist desire for wealth. Government intervention in the workplace to ensure that workers receive a fair wage and are treated fairly is another obligation of the government. By ensuring that there is healthy competition within the market by means of anti-trust laws, the government is enforcing another principle of capitalism that there must be consumer sovereignty in the marketplace. By working to correct the flaws of capitalism by protecting people as the U.S government should have done immediately with people in the South after the hurricanes, or back in the 30’s when Hoover did nothing to help those suffering from the Great Depression, the government will not only win favour in the eyes of its people and help its economy in the long run, but it will also be strengthening the basic principles of capitalism that the nation holds dear.