Government Intervention Theory and Government Economic Functions

Author: Xie Ziqiang
Publisher:
Publish Date: 2004-07-01
Features: Since the late 15th century, when the feudal system in Western Europe gradually disintegrated and the capitalist system began to emerge, the market economy has experienced a development process of about five hundred years. Over these five hundred years, there have been two major economic thoughts and their policy proposals—state intervention and free enterprise—experiencing a dynamic interplay and complementary evolution. The theory of free enterprise, or economic liberalism, refers to the market mechanism that guides and coordinates the production and exchange activities of countless individuals as the "invisible hand," vividly reflecting the spontaneity and effectiveness of the market mechanism.