Economic Rationalism And The Theory Of Economic Rationalism

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The reason said consumers better off as a result of economic rationalism because consumers can enjoy more fairness in the market. For instance, consumers have more information about price, utility, quality and product materials that they can compare with substitution in the market and select the best fit product. Also, economy closer to free market can inspire product innovation.

The concept of economic rationalism aim at market efficiency to reach entire society interest maximization, through deregulation, a free market economy, privatization of state-owned industries, lower direct taxation and higher indirect taxation, and a reduction of the size of the welfare state, for example, privatization of public utilities and free trade
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Consumer can benefit in cheaper goods, when presented with two products that offer similar benefits, customers vote with their purchases and decide which product will survive. Customers also determine the ultimate price point for a product, which requires producers to set product prices high enough to make a profit, but not so high that customers will hesitate to make a purchase.
Except consumer can benefit in cheaper goods, corporate access to larger markets means that firms may experience higher demand for their products, as well as benefit from economies of scale, which leads to a reduction in average production costs.
Providing an incentive for countries to specialize and benefit from the application of the principle of comparative advantage. Globalization enables worldwide access to sources of cheap raw materials, and this enables firms to be cost competitive in their own markets and in overseas markets. Seeking out the cheapest materials from around the world is called global sourcing. Because of cost reductions and increased revenue, globalization can generate increased profits for
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Economic rationalists insist that the public sector tends by nature to be inefficient, in part because it is not subject to the market disciplines which the private sector faces.
Indeed economic rationalism tends to privatization of public utilities, like electricity, gas, airports, railways, telecommunications. Many other government bodies have been corporatized or required to operate on a pay-for-service basis. Privatization is not only an end in itself but also serves an educational function by transforming public attitudes toward ownership and economic responsibility. The result will be an increase in net economic welfare: the economy will become more dynamic and scarce resources will be allocated more efficiently. In capitalist theoretic, the profit motive is said to ensure that resources are being allocated
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