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Understanding the Free-Market

March 18, 2013 Leave a comment

Source; Cartoon Movement

Under Adam Smith’s view, the metaphor of “the invisible hand of the market place” describes the self-regulating behavior of the market because of two factors: self-interest and competition. Free markets are the fundamental connection in exchanging things, such as products, between buyers and sellers. Free markets came about because no one is self-efficient. Parts of society must specialize into a concentration of a small number of productive abilities. Therefore, specialization of a specific product or products requires exchange in order to meet needs and desires. This exchange requires the free market to be the connection of society through transactions in the market. This market works through the cooperation of competition and self-interest. The pursuit of self-interest in the market is a benefit to individuals as well as the country. Self-interest requires businesses to be competitive with other businesses for profit. This ideal is the reason why the market is self-regulating with no government intervention. This self-regulative nature is why Adam Smith coined the phrase “the invisible hand of the marketplace.”

Self-interest plays a crucial role in the free market because it not only benefits the individual, but society as a whole. In Adams Smith’s Wealth of Nations, he states that “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” The term “invisible hand” describes the nature of self-interest in a free market. Adam Smith argues that self-interested competition keeps prices low. The pursuit of one’s own gain creates a demand for competition between businesses or individuals. This indicates that the free market is self regulating and, therefore, government intervention is unnecessary. However, in pursuit of one’s own personal gain, consumers have the incentive to search for lower prices, consequently leading to the important aspect of competition.

On the opposite side of the spectrum, firms compete with each other to sell their products to consumers and make a bigger profit. If a firm sets the price of a given product higher than the price set for the same product by another firm, sales will increase for the firm with the lower-priced product. Consequently, the struggle to make profits ultimately forces the higher-priced product to drop the cost to better compete with other firms. This action begins a pattern that ultimately leads to a price similar to the cost of producing it. This circumstance is why Adam Smith coined the phrase “the invisible hand of the market place.” This is why the free market is self-regulating. Self-interest motivates consumers to get products at a lower price, and firms will react with competition to the self-interest of individuals, thus self-regulating.

I found this topic very interesting because I better understand what keeps the free-market going. Since free-markets do not require government intervention, I have always wondered how the market regulates itself. Understanding the two factors of self-interest and competition helped me see how the free-market is self-regulating. This leads me to believe that the U.S. government should not intervene when society may work more efficiently on its own. It was fascinating to learn that free-markets can regulate themselves because of human motivation and competitive nature. Although there are many other types of markets, free-markets stood out as the most interesting of those we have studied in class. I understand that the United States is a mixed economy, not merely a pure free-market nor a planned economy, but somewhere in the middle. Therefore, seeing how a pure free-market economy flows creates a better understanding of how the United States economic system works, excluding the aspects of a planned economy.


What Makes an Effective President

February 28, 2013 Leave a comment

For the president to be more effective in his term, he must focus on the current affairs of the country. If the United States is at war, then Commander-in-Chief role is the most important role because of his duty to protect the country. However, if the United States is at peace, then the president will take on a new role that fits the situation. According to Rossiter’s The American Presidency, the roles of president include: Chief of State, Chief Executive, Chief Diplomat, Commander-in-Chief, Chief Legislator, Chief of Party, Voice of the People, Protector of Peace, Manager of Prosperity. The roles of the president are very important to understand what he is supposed to do in his term to make him more effective. It is crucial to understand that it depends on the context of the moment to decide which presidential role will be the most efficient. If the United States is in war, the president must worry about the safety of the nation. If the United States is in peace, then the important role depends on the current circumstance in the country; for example, whether the Unites States needs to overcome debt, or make an important policy.

If the president focuses on the role of Commander-in-Chief during war, than he can make his term more effective for the country. As the Commander-in-Chief, the president is in charge of the armed forces. He has the number one priority in the army. He decides where troops are stationed, where ships can be sent, or whatever there is something needed in times of war. All of the generals take their orders from him. Therefore, this shows that in war, the president’s number one duty is to protect the nation from the enemy. Also, the president obtains more power than he would in times of peace. This can make him more effective as a president because he is focusing on the most important issue available. The president will use the Commander-in-Chief role in time of war because it is more important than the other roles at that moment.

At times of peace, there are other presidential roles that the president can obtain to be more efficient. Since the president does not have to worry about war, there not using his Commander-in-Chief role, he has to take on other current affairs inside the country, or diplomatic roles with other countries. If there is a bill that is being debated, then the president will take on the Chief Legislator for the moment. This example can show that for a president to be effective, he needs to focus on the current events. Another important and recent example is the Fiscal Cliff policy that took place earlier in the year. For the president to be fully effective, he must put his role of Chief Legislator above all the others to make him more effective.

The American Presidency, there are important roles that the president must activate at the right time to make him a more efficient leader. This topic is interesting to me because of the complexity of the presidents job in the United States. I believe that it is important for the president to use each role at the right time to make him for effective. During times of war, I believe that Commander-in-Chief is definitely the most important role. However, during times of peace, I believe that the president must pay attention to the current affairs of not just the United States, but of the whole world. Political scientist made these role to make it easier to visualize what the president actually does. During certain situations, I believe that the president will enthuse on one or the other depending if its relevant in the current affair.

The 8-Year Illegal Immigration Plan Awaits

February 22, 2013 Leave a comment

According to the New York Times, the issue of illegal immigration has been a very emotional one for more than two decades. Illegal immigrants made a huge impact on the 2012 presidential election, as the children of those immigrants, who are U.S. citizens, largely supported the Democratic Party, leading them to crush the Republicans. It has been a very heated debate in recent years on what should be done with the 11 million immigrants currently living in the United States. While the Democrats want a open path for citizenship of illegal immigrants and an even an easier process for their children, the Republican Party yearns for a more strict selection policy and also stronger border control. I believe that the Democratic proposal is necessary to solve the problem of illegal immigration by creating an easier and shorter path to citizenship; therefore, President Obama must use the necessary leadership roles of Chief Legislator and Chief of Party push the bill into a law.

I support the Democratic policies for a path to citizenship because I believe that if the United States gave a shorter time to give legal status, it would bring out more illegal immigrants willing to seek citizenship. If Congress codified the Republican Party’s proposal, then most illegal immigrants would not want to take the punishment of “longer path for illegal immigrants, to make it clear they are not jumping the line or being rewarded for violating the law to come to the United States.” Making the process more difficult will intimidate the illegal immigrants because they may feel that the process is not worth it. Although the Democrats’ proposal contains nothing about stronger border security, President Obama mentioned it in his immigration speeches in reference to stopping or slowing the flow of illegal immigrants. I support the Democratic Party’s policy primarily because having a long legalization process will only force the immigrants to hide from the government, where a shorter process may inspire them to seek citizenship. Even though the policy might initially encourage more illegal immigration flow, I believe that if Obama develops a stronger border security as promised, we can slow the illegal movement along the borders.

During the process of passing the bill, the President plays a crucial role as Chief Legislator.  According to Article II, Section 3 of the Constitution, it is the President’s duty to recommend legislation to congress and he has the power to veto. As President, Obama decided he would be the presiding officer in the illegal immigration discussion, in which he has “remained committed to staying on the sidelines while a group of Republican and Democratic senators tries to reach an immigration agreement by the spring.” Since Obama is spearheading the legislation, he wants to make policy and law that will benefit the country as well as his party. This is part of his duty as Chief of Party, in which he is the leader and representative of the Democratic Party. So while he is encouraging the two parties to reach a compromise, he also has the duty to his party. In the discussion of illegal immigration and the path to citizenship, the President preserves these crucial roles of Chief Legislator and Chief of Party to make sure the bill gets passed and becomes law.

The illegal immigration discussion is a very important social issue because it pertains to the President’s role as Chief Legislator. These presidential roles are very important in understanding the politics of government, and make an important connection to the discussion in our government class. The issue of illegal immigration helps us understand the President’s role in the government, as well as seeing true politics in action. For better or for worse, politics is the primary motivation for the policies of most members of Congress. In this case, the immigrants played a crucial role in the 2012 election and helping them obtain citizenship will increase the power of the Democratic Party. This event in our country helps me visualize the President’s role in the government and what he actually does in the Oval Office. Also, the issue of illegal immigration gives me insight into what each party believes, and will help me form opinions when I am of age to vote. I believe that if Congress can compromise and reach a solution that will have the best of the Republican and Democratic policies, the country can eventually solve the illegal immigration problem. In order to get a cooperative Congress, President Obama must use his leadership abilities to guide them in the right direction so they might reach a solution that will satisfy everyone while still remaining true to his party.

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