The Historical Context Of Market Intervention

Free market economy has its inevitable spontaneity, blindness and periodicity, and it tends to result in monopoly, externality, information asymmetry, inequality of wealth and income distribution, unemployment and economic crisis. Though some economists believe that market itself will correct market failures without government intervention, and yet even with the belief that the correcting do occur in the long run, market failure exists and will do harm to the social stability and economic development for the inequality of income distribution, unemployment and monopoly will cause a lot of social problems. As a result, not only the victim of free market economic, such as employees and farmers, but the government itself wants to be responsible for the intervention in the market to stimulate the economy.The market economy, which foundation is price competition, should play a fundamental role in the resource distribution, which is broadly accepted after the central plan economy of the Soviet Union, China and East Europe, transforms to the market economy. Meanwhile, west countries enhanced market interventions, both in externality and deepness in general, not excluding the elimination of market intervention in certain economic circumstances.The article has a review of the market intervention of main west...