Should the government take over the US free market economy?

Yes

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by W. H. Lindgren

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The wording of this question generates a misleading title because it presumes and assumes that the United States actually has a "free market economy." Factually, the US has what economists term a "mixed economy." Using that preferred term changes the nature of the debate. It is likely that if the nation actually functioned with free markets, then it would probably not be a good idea for the government to take over any markets.

However, since the country operates a mixed economy with various free markets, regulated markets, controlled markets, and exclusively governmental markets, then the discussion is whether more or fewer markets should be somehow "taken over" by government and to what degree any market may be controlled by government.

The question is further complicated by the wide-ranging levels of government. Debate would have to identify whether federal, state, county (or parish), city, township (or borough), or village government should actually take over some form of a market. One very quick example is in the "business" of garbage. Across the USA, there are varying forms of garbage handling from those that are managed by village, city, and county governments to those that are completely free market with private companies operating un-regulated service.

This single, specific market clearly illustrates the incredible diversity of how different "government" entities may or may not "take over" some part of the economy. And, yes, the federal government is in the garbage business-military installations, nuclear waste facilities, shipyards, etc., to name a small few.

It seems clear, then, that in a mixed economy there are free market functions alongside government controlled operations that can occur even in a single business field. In my own immediate region a totally un-regulated refuse company picks up all types of garbage in front of my house, while about seven miles North of my rural location city employees in city-owned trucks pick up garbage that must be separated and deposited in specific containers-which are then hauled to designated city-owned facilities, etc. Just a few miles makes the difference between a free market and a totally controlled government function.

The real debate is a political decision as to which parts of the US economy are best operated by government(s) and which may be best left to the private enterprise of free markets. Different answers abound. After the massive financial debacle of 1929 and the disastrous "economics" of the early Thirties, the federal government-with a large degree of consent by the American voters-stepped in with restrictive regulation of banking.

Over several decades, many of the restrictions on that market were removed, relaxed, or sort of overlooked. In the year of "ought-eight" un-regulated banking seems to have been demonstrated, once again, as a poor quality idea. Even so, the discussion clearly is not about whether the federal government should actually "take over" banking, but rather how heavy-handed the national regulations should be in order to avoid future unregulated financial crises created by the banks. The discussion is about how much and what nature of a take over will occur, not whether some elements will be taken over.

As a result of viewing the United States as a mixed economy, it becomes clear, for example, that the retirement business is partly governmental through Social Security, partly private through company pensions and/or 401ks, and partly "mixed within the mix" where quasi-governmental entities manage a mixture of personal, union, and private company funds.

Somewhat similarly, medical care ranges across the definitions in which we can view Medicare as a government program for seniors-though the recipients may choose to purchase forms of coverage from private companies. Conversely, some classes of armed forces veterans have medical coverage that is totally government operated through the VA Medical Centers.

It seems reasonable then to assert, for debate, that there may be some areas in which it makes sense for the government to "take over" and completely manage certain areas of the US economy. It seems very reasonable to most people that the Department of Defense totally operates the health care system for military personnel.

Based on this, perhaps, it was reasonable to argue, logically, for the federal government to "take over" all health care services for people over 65 years, plus all disabled citizens. In a mixed economy, why not? As a result, Medicare became a federal program.

Then, by extension, in a mixed economy with varying levels of government involvement in health care, the argument could be made that government should take over all medical services in the United States. This idea offends "free marketeers," but that notion has already been set aside for certain categories of citizens. It's not really a free market, so one more area of government involvement should not be that big a deal.

Defining the terms of the debate clearly changes the notion of a "free market," and then the concept of government involvement is equivalent to a "partial take over." So, yes, it is acceptable for government in the United States to take over segments of the economy and it happens with some degree of regularity at all levels.

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