Economic interventionism

Economic interventionism, sometimes also called state interventionism, is an economic policy position favouring government intervention in the market process with the intention of correcting market failures and promoting the general welfare of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud, enforcement of contracts, and provision of public goods and services.[1][2] Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, or addressing market failures.

The term intervention is typically used by advocates of laissez-faire and free market capitalism[3][4] and assumes that, on a philosophical level, the state and economy should be inherently separated from each other and that government action is inherently exogenous to the economy.[5] The terminology applies to capitalist market-based economies where government actions interrupt the market forces at play through regulations, subsidies and price controls (but state-owned enterprises that operate as market entities don't constitute an intervention). Capitalist market economies that feature high degrees of state intervention are often referred to as a type of mixed economy.[6]

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