"FAILURE & PROGRESS" (D.R. LEE & R.B. MCKENZIE).   Term Paper ID:21447 Click to get this paper

Essay Subject: Critical review of work on inevitability of economic failures in thriving free market.... More...

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Paper Abstract: Critical review of work on inevitability of economic failures in thriving free market. Paper Introduction: The writers of Failure and Progress are professors who demonstrate that the American government actually hampers economic growth by the ways in which it tries to resolve economic failure. Marxism is dead; now nations and governments need to realize that markets are more ruled by the freeing role of society. This paper will be an examination of professors Lee and McKenzie as they try to demonstrate in Failure and Progress that no country will ever have economic growth without economic failure. In other words, for there to be winners generated by the free market, there must also be losers. Pertinent examples from the text will be used to support the contention that the main premise of Failure and Progress is correct. When countries fail economically, they often tend to avoid free markets that are in competition with them or markets in the forme Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. The authors contend that in a successful economy it isimpossible to have one without the other. Instead of being structured so that the government mustinterfere on a regular basis, it is structured so that the natural ebb andflow of life and economics (the liberalizing effect of free markets) ismirrored in the way businesses either make a profit or die off. 167) The main theme of the authors' book is that there can never be acountry that will not experience economic failure at the same time it isenjoying economic successes. A preoccupation with trying to alter this course of naturalevents in a free market is often what leads to disasters far worse than theeconomic woes inspiring the government meddling. The world's economics and the world's marketsdictate the great diastole and systole of economics for each individualcountry so that a growing, dynamic and successful society must possess bothwinners and losers. The overall success of market economies depends critically on the information and motivation that can be created only by economic failures. Lee and McKenzie have demonstrated that the biggest mistakegovernments make when their economies fail is to avoid free markets. Yet theauthors believe that those who try to manage markets, even with the bestintentions, often end up making their economic woes worse than when theybegan. Lee and McKenzie find that capitalism has a natural checks andbalances. Failure and progress: The bright side of the dismal science. Pertinent examples from the text will be used to supportthe contention that the main premise of Failure and Progress is correct. 153). Theauthors find that free markets have a cycle of birth and death similar toother life cycles and that artificially prolonging a company or an industrythrough government intervention can actually upset the balance of theeconomy. 9). Although such an approach in making a case for a market economy is tempting, and is often attempted, our message in this book is that the case for a market economy has to not only accept but also embrace the failures that are the result of market competition. Marxism is dead; nownations and governments need to realize that markets are more ruled by thefreeing role of society. However, they also contend that markets are a far better optionfor steering a country's economic planning than the alternative. This condition exists because: Substituting government control for market competition cannot eliminate competition or the failure that results from competitions. (1993). ReferencesLee, D.R., & McKenzie, R.B. However, Lee and McKenzie contend that, in a freemarket, the nature of freedom implies that people are free to fail as wellas succeed. When countries fail economically, they often tend to avoid freemarkets that are in competition with them or markets in the former SovietUnion. The death of the former Soviet Union is attributable to the death ofMarxism. Washington, DC: Cato Institute. Thisnot only impedes economic success while making the society poor, but thepoorest people are the ones who suffer the most: Many of those in the poverty count were children whose continued failure in life was being made likely by the inability of their parents to pay for proper prenatal care and to provide the family stability and support conducive to upward economic mobility (Lee & McKenzie, 1993, p. Economic activity must be organized for any country to have a chanceof succeeding financially while still meeting the needs of its society.Markets are far from perfect as economic indicators, as the authorscontend. Withgentle, yet persistent economic common sense, the professors argue thateconomic failures can be handled in one of two ways: failures should be subsidized with compassion (which encourages failures to spread), or handled hard-headedly so as to educate free countries (Lee & McKenzie, 1993, p. 155).The resulting political competition makes everyone lose because it isfalsely adjusting the supposedly free market so that lessons to be learnedfrom failures miss those who are succeeding or trying to. The failures that result from political competition are diffused and disguised, and they provide none of the information or motivation necessary for the creation of wealth (Lee & McKenzie, 1993, p. In otherwords, for there to be winners generated by the free market, there mustalso be losers. Yet, if government competition is replaced with market competition,the system's natural checks and balances are destroyed and wealth isreduced, not produced: The strong tendency is for market competition, which is generally wealth producing, to be replaced with political competition, which is often wealth reducing. Expanding the economic role of government substitutes political competition for market competition, with the resulting failures doing far less to promote productivity than do the failures in the competitive marketplace. When individuals see government as the vehicle by which they can escape the economic failures of the marketplace, there is a headlong rush for a smorgasbord of political privileges that undermine the market discipline upon which the overall success of the economy depends (Lee & McKenzie, 1993, p. The mere artificial (according to the authors) effort of tryingto save these institutions may only serve to worsen the condition of thepoorest society members while undermining any real chance for economicgrowth. 154). Any attempt to consider economic failures as isolated incidents within the capitalist system ignores an essential ingredient in the economic success of that system (Lee & McKenzie, 1993, p. The writers of Failure and Progress are professors who demonstratethat the American government actually hampers economic growth by the waysin which it tries to resolve economic failure. In fact, they point out the manyvirtues of economic failure while pointing out the failure of certainpolitical virtues: The argument is that--with the proper adjustment, fine tuning, and commitment--the failures can be eliminated and only success will remain. This paper will be an examination of professorsLee and McKenzie as they try to demonstrate in Failure and Progress that nocountry will ever have economic growth without economic failure. Now governments realize in the West and East that market forcesaround the globe must dictate economic policy and reaction at home. The most honest and ultimately most compelling case for the market system depends upon the recognition that failures are an inherent and constant feature of the market process. The reason this is thecase is that, when a socialist state exists, a sponsored or subsidizedmarket can turn into a deeply rooted and perpetual economic burden.However, in a free market system like capitalism, this can never occur.The failures will come and go instead of representing more good moneythrown after bad. The government of the United States, and many other governments, oftenstep in and lend a hand to those industries or private economic problemsthat need handling. 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