The government should provide everyone in the country a job

\"The government should provide everyone in the country a job, transportation, free healthcare, and a college education.\"

After reading chapters 1 and 2, describe what kind of statement this is and whether it is efficient and feasible in the long run to do based up your knowledge of private property rights and resource scarcity.

Solution

This statement is related to welfare state.

A welfare state is a state in which organized power is deliberately used (through politics and administration) in an effort to modify the play of market forces in at least three directions – first, by guaranteeing individuals and families a minimum income irrespective of the market value of their work or their property; second, by narrowing the extent of insecurity by enabling individuals and families to meet certain social contingencies like sickkess, old age , unemployment and ensuring all citizens a certain agreed range of social services.

Achieving welfare state is a difficult task because human needs are unlimited and the means to satisfy human needs are limited. Economic resources are scarce and it is the responsibility of any government to ensure optimal utilization of economic resources. By providing range of social services such as free education , healthcare etc, the government is diverting scarce economic resources to its citizens who would prefer to receive free social services than to be productive by seeking employment. If the government provides every social benefit, there would be no incentive to work and results in inefficiency in the long run.