The Relative Merits and Demerits of Governments and Markets as Social Organizers

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Introduction:
What are social organizers?
Society is build up by many different individuals. In order for the society to function well, social organizers are one of the most crucial factors. By definition, organizers are the ones arrange things within a particular environment to improve the quality of the environment as a whole. Social organizers are one kind of the organizers, which allocate and arrange the society’s resources. Governments and Markets

When considered governments and markets as social organizers, it is crucial to consider both the pro and con sides of them.

What markets do well?
The most important benefit of having markets is they do a great job in allocating the resources in the society efficiently. 1.Markets can help to mitigate the economic crisis when the domestic demand in one country is not enough. According to the Economic Geography, the international markets provides an opportunity for one country to trade with other country from external market which fix the problem of insufficient domestic demand. For example, Khan uses the case of Indoneisa’s economic crisis to describe the merit of an international market can help to function the export of import in one country since the markets between Japan and Indonesia helped to solve the economic crisis in Indonesia.

What markets do not do well?
Even though Markets can allocate the resources well, it did not assist to prevent the poverty. Also, it is unable to alleviate the unequal distribution of wealth because markets are favored for the ones who have assets such as houses or cars. For the ones who don’t have assets, markets prevent them from joining the trade because they don’t have the products to trade. The other important demerit of market is In contrast to the benefit of an international market, Jim Glassman noticed when the domestic market has some economic problems, it is likely to lead to destruction to the international market because all the markets are closely tied.

What should government do when market ‘fail’?
Governments can help to solve the poverty by promoting the income redistribution. In order to do that, the government collects taxes from the rich and can disperse the money to the people who earned less or to the unemployed people. The other important function of government is to ensure the competition. The reason that the government has to ensure the competition is that free markets may lead to the monopolism, which will cause an dramatic inflation.

What are the hazards associated with the government?
Government cannot eliminate the externality. Furthermore, since the government has the power to make decisions for a country’s development, it can hurts one country’s economy badly if the government made wrong decision. Khan Saleheen described the reason lead to the economic crisis in Thailand as the government helped its friend instead of the whole society in economy because it do not care the ability and situation of the poor people, which lead to the unequal balance of distribution of money. Not only didn’t the Thai government not helping the poor, which is suppose to be its purpose, but also failed to solve the problem of overvaluation of products. The example Saleheen depicted is the Thai government failed to devalue the bahts when it is priced higher for about 25%.

Conclusion
Both markets and governments as social organizers has some benefits and flaws. They must co-existed otherwise it will cause a destruction to the economy because it is easily for only one force of organizer to go to the wrong direction and it will be hard to fix the problem. If the market is the only social organizer, it is easily for it to cause inflation and unequal distribution. If the government is the only social organizer, it is easily for it to make a wrong decision in economy, which will lead to huge destruction in the future. So, the best economy should based on both the government and market.

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