Mix of the UK Economy
The UK economy combines factors of both a free market economy and one
which is fully planned. This brings both advantages and disadvantages
as it limits the power of market forces, but on the other hand
restricts the influence the government has over supply and demand.
Since the 1980s the government in the UK has steadily reduced its
involvement in the economic system. This has been done through
privatisation, which means handing over control of services to private
companies and investors, for example British Gas or Railtrack.
A free market economy revolves around the central concept of supply
and demand. Consumers make individual decisions about purchases for
their own self-interest whilst producers aim to make the largest
profits by supplying exactly what the consumers desire. Resources are
not allocated by the government or any state organisation but via the
price mechanism. This means that the producers determine the supply
and the consumers determine the demand, the combination of these two
factors determines the price of a product.
A key feature of a market economy is the freedom of choice and
enterprise. This means that producers are free to obtain economic
resources for use in production and are then able to sell their
product in whichever way they choose. These people are known as
entrepreneurs and are only seen in a market economy. Another major
difference between free market and planned economies is the principle
of self-interest. The idea of capitalism is that individuals are free
to act as they wish and this translates into the concept of an entire
economy being built around the idea of self-...
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... economy than a planned one, but the mix between the two is still
fairly equal. Many privatisations have been a success, such as British
Telecom, British Gas, and have provided the same service as a
nationalised company whilst remaining competitive. However, others
such as the privatisation of the UK's rail network have no been so
successful and many people yearn for a return to state control.
Personally, I feel that the mix between market and planned economies
in the UK is about right, although there are some services such as the
aforementioned rail network which I believe may be better run in the
hands of the government. On the other hand, if privatisation reduces
taxes and enable the government to concentrate on more essential
services such as health and education, then privatisation may be the
way forward.
Monopoly, means that a firm is sole seller of a product without any close substitutes, controls over the prices the firms charge. Government sometime grants a monopoly because doing so is viewed not only to be in the public interest, but also to encourage it with price incentives. However, monopolies fail to meet their resource allocation efficiently, producing less than the socially desirable quantities of output and charging prices above marginal cost. Thus, this inefficiency of monopoly causes the quantity sold to fall short of social needs. In order to handle the problems, policymakers in the government regulate the behavior of monopolies and try to make monopolized industries more competitive
Governments regulate businesses when market failure seems to arise and occur and to control natural monopolies, control negative externalities, and to achieve social goals among other reasons. Setting government regulations on natural monopolies is important because if not regulated, then these natural monopolies could restrict output and raise prices for consumers. It is important to regulate natural monopolies because they don’t have any competition to drive down the price of the product they are selling. Therefore, with no competition, they can control the output and the price of the product at whatever they deem necessary. With regulations the government keeps it fair both for the consumer and producer. It’s also important for government
...t Union tried this with communism, using a centrally planned economy system in which economic decisions were made by the government rather than by interaction between consumers and sellers. Market economies like the United States have allocated resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. This means that Market prices reflect both the value of a product to consumers and the cost of the resources used to produce it. Therefore, decisions to buy or produce goods and services are made based on the cost to the community/society providing them.
Although the belief in individual rights and responsibilities is important there must be some kind of government intervention. The government helps regulate bad companies selling third rate products and helps protect the consumer from buying these products. The government also intervenes if a company has an unfair monopoly over the entire market to help promote smaller businesses to enter the market and have a chance to produce revenue. We also know that if there is total government control the wealth of the individual suffers. Some of the poorest countries in the world rely on a Socialist government and lack economic growth and wealth.
The economy of a nation is a major indication of its success. One aspect of a nation's economic success or failure is the system of government. Whether a nation is socialistic, communistic, ruled by absolute sovereignty, or based on capitalistic principles can be a key factor in a country's economic success or failure. Government is the foundation of an economy but it is not what determines its success. Issues that determine a nation’s economic success include growth strategies, improved or increased resources, investment and savings, government policies, trade, foreign direct investment, income distribution, labor allocation, innovations in technology, and several other economic issues. I feel that economic growth is the main indicator of economic success. Additionally, innovations in technology, improving human capital, and improving foreign direct investment (FDI) are three issues that can lead to economic growth.
The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming economy, instead of having an outsized tax cut, we should use the surplus to further pay down the national debt. A tax cut, though most Americans would favor it initially, would prove counter productive. Cutting taxes would over stimulate an already raging economy, and enhance the possibilities of an increase in the rate of inflation. Paying off the national debt would actually help lower interest rates and boost investments, and therefore further increase the wealth of the population, while keeping inflation at bay.
If you have ever played a game of Monopoly, you should know that everyone starts of equally, however by the end of the game someone has almost total control over the board. In the late 19th century and early 20th century, this game of Monopoly was a real world occurrence that made less competition amongst businesses and allowed them to raise their prices. Monopolies and trusts of this time such as the Standard Oil Trust, Copper Trust, and various other trusts, enabled large companies to, knockout smaller companies leading society to fear their power, and in turn the government to get involved.
During the ‘70s Margaret Thatcher used neoliberalism and a tendency toward free-market economy to help her country.Thatcher was a leader of the Conservative party leader who valued neoliberalism.When the U.K. is in a period of recession they have a tendency to swing right and go toward privatization and market economies. When the Labour party has control of the government there is a swing left and there tends to be more nationalization of industry.When situations start to get better the governments start to go toward a central alternative.
During her sovereignty which lasted eleven and a half years (May 1979-November 1990), she turned Britain upside down with her policies of fighting inflation, tackling the unions, intensify the British image in foreign affairs, the memorable privatisation and popular capitalism idea and many more. Though the pursue of those policies outcome high unemployment percentage and a lot of strikes from the public, Thatcher’s arguments on behalf for those alterations was the stressed importance of change in social attitudes in order for successfully compete with the rapidly developing world. Some of the noticeable new attitudes that persist in Britain to this day can be summarised as efficiency, entrepreneurialism, competition and independent responsibility. Thatcherism has served as a catalyst to the formation of the modern “Western/Capitalist culture” that has affected the everyday life of so many around the world.
Was the British entrepreneur the most important single reason for the relative decline of the British economy in the late nineteenth century?
The fact that businesses want to monopolize the markets that they are in has both beneficial and negative consequences. On one hand you want to support the capitalistic approach that everyone has the right to improve upon certain products and make the most out of those products, government also has a role to step in and determine what is actually beneficial and what will hurt the consumers and economy. While the plot in Atlas Shrugged was dramatized a fair amount it is still important that we us literary analysis to develop and underlining thought behind the plot. While it is my opinion that the economy will never reach the point that it got to in Atlas Shrugged, the interactions between firms and government seems reliable. If it means that you will increase your profits, a majority of firms in the market have no problem stepping on the little guy and the consumers. The goal is to make as much money as possible, not be the nicest person and not always act in the highest of moral standards. The interactions that we witnessed in the literature and in real life will never go away, but in 5 years, it is extremely doubtful that government regulators will allow firms to gain as much control as they did without impeding their progress with bills and
During the Winter of Discontent in 1979, Britain had high inflation rate, an income tax rate of 83% and more people were becoming unemployed. There were controls of price, dividend, currency and wage. The government accounted for about 30% of the work force. The state controlled most major industries such as British Aerospace, British Airways, British Telecom, British Steel, British Leyland, the British National Oil Corporation, Associated British Ports, Cable and Wireless, Rolls Royce. But when Margaret Thatcher was elected Prime Minister in 1979 she used outstanding political skill and will and she reversed Britain’s socialist direction and moved the economy to embrace a free enterprise. From an article via the website of the Reason Foundation in 2006, Thatcher stated: “We understood that a system of free enterprise has a universal truth at its heart: to create a genuine market in a state you have to tak...
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
Running The British Economy Introduction = == == == ==
The macroeconomic environment is a dynamic environment, which could not remain unchanged (Gajewsky 2015). There are many factors influence the global macroeconomic environment, such as interest rate, exchange rate, GDP,aggregate demand, monetary policy and other macroeconomic variable (Oxelheim and Wihlborg 2008). These factors are closely associated with commodity price.