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Government Intervention Strategies

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LandJ posted on Thu, Aug 16 2012 1:07 PM

Hello, 

I would appreciate it if you could let me know specific government intervention policies that you know. With what specific ways governments interfere to businesses and private sectors hindering the free market and what is their goals each time? 

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An example: In Greece government prohibits imports of gas products for national security purposes. The result is the oligopoly of 2 oil & gas  Greek companies. I do not know if indeed there is national danger from imported gas products or it is another false governmental policy.

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Answered (Verified) Bogart replied on Thu, Aug 16 2012 3:01 PM
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By far the most significant intervention any government can do is to enact and enforce Legal Tender Laws.  These laws make it impossible for individuals to use any form of money but the one created by the central bank of the country.  This means that the government through the central bank can redistribute resources in the economy using preferred interest rates on loans from the central bank.  And the central bank creates its own money so it can loan money to anybody it wants to.

All other interventions of any sort are completely dependent upon Legal Tender.  For example every war in the 20th Century would have been completely impossible without central banking through Legal Tender Law.

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The "green" movement in business is a big, red sore thumb example of it. Almost every industry has its darlings where the gov't tries to pick winners, mostly the banking industry at the moment, but also health insurance (especially in the US), education (globally) and in the energy and utilities sectors around the world.

Though I am positively predisposed towards it, the nuclear industry also feeds heavily off subsidies and artificial risk subsidisation, especially for older plants e.g. in Japan.

Freedom of markets is positively correlated with the degree of evolution in any society...

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Answered (Verified) Bogart replied on Thu, Aug 16 2012 3:01 PM
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By far the most significant intervention any government can do is to enact and enforce Legal Tender Laws.  These laws make it impossible for individuals to use any form of money but the one created by the central bank of the country.  This means that the government through the central bank can redistribute resources in the economy using preferred interest rates on loans from the central bank.  And the central bank creates its own money so it can loan money to anybody it wants to.

All other interventions of any sort are completely dependent upon Legal Tender.  For example every war in the 20th Century would have been completely impossible without central banking through Legal Tender Law.

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Everything here is a specific government intervention policy: http://uscodebeta.house.gov/

Everything here is also a specific government intervention policy: http://www.gpo.gov/fdsys/search/getfrtoc.action?selectedDate=2012-08-17

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LandJ replied on Tue, Aug 21 2012 7:22 AM

 

I have some questions about lobbying.
 
Spending money for lobbying isn't it supposed to be illegal? And since it is illegal, aren't these money transactions not transparent? So how can one say that the A company spent X money and the B company spent Y money on lobbying?  Aren't those activities being secretly? How can people know the exact amount of money on lobbying?
 
Also,
 
My mother owns a small glassware retail shop. 2 large companies (Praktiker, Carefour) established departments in our city. They sell glasses in low prices. My mother loses sales because this additional competition. My mother (+ many other small business owners who suffer from the competition of these 2 companies) demands from government to take actions in order to reduce the competition. Actions like, not allowing these 2 companies to stand inside the city, but outside. Or ordering these 2 companies to leave the city and its territories. Maybe there are more policies that small business owners ask from the government.
 
Q: Isn't my mother and the rest owners theoretically  lobbyists??**
 
(**I said theoretically because my mother and probably the rest owners have not spent any money for lobbying....they just believe that the government should interfere to protect them)
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xahrx replied on Tue, Aug 21 2012 9:32 AM

 

LandJ,
 
I think you should look at these policies in a broader framework to understand them better.  One possible framework would be prohibition vs compulsion, and categorize the interventions accordingly under both aspects.
 
Spending money for lobbying isn't it supposed to be illegal? And since it is illegal, aren't these money transactions not transparent? So how can one say that the A company spent X money and the B company spent Y money on lobbying?  Aren't those activities being secretly? How can people know the exact amount of money on lobbying?
 
You can't.  All you can do is look at those portions of their books that are public and deduce for yourself what's going on.  For example there are reports which tally up political contributions from companies to various campaigns.  There are certain front companies that are supposedly non profits but who get the majority of their funding from some sources, or which are established by people of certain ideologies and so attract donations from people with similar interests.
 
Q: Isn't my mother and the rest owners theoretically  lobbyists??
 
Yes.  They may not have spent money, but they did spend time and other resources lobbying for special treatment.  Some people are just better at it than others, and so get the political reward.
"I was just in the bathroom getting ready to leave the house, if you must know, and a sudden wave of admiration for the cotton swab came over me." - Anonymous
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Your mother isn't theoretically a lobbyist she IS a lobbyist.  Anyone can be a lobbyist.  A small child who writes a government official for better food for lunch at school is a lobbyist.

i don't know your country's laws, but legality in donating money is very grey.  Lobbying in the US isn't illegal at all, but paying a congressman directly for the explicit purpose of passing a law is (bribery).  Now if a lobbyist goes to a congressman asks for a law and then builds a dozen public schools in that congressman's district is fine.  Although like I said its a grey area and I'm not a lawyer.

also lobbying doesn't have to give politicians anything.  There is a taxi cab lobbyist here in the states that gets paid 500$ an hour because he knows the ins and outs of getting in to sit and talk to politians.  He tells them what he wants and why he wants it.  That's lobbying.

Also a lot of donations are public and you can also make them public.  When I donated to Ron Paul I put my name and profession (military).  Then Ron Paul can go out and say he receives more money from active duty military than anyone else combined.

Eat the apple, fuck the Corps. I don't work for you no more!
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