Whether government should set pricing, distributions and other controlling activities are under debate at my first COMM 101 course. To my view of thinking (and most of my classmates think so as well), it depends on different products, different countries and situations. On the one hand, under most circumstances, the authority should not intervene in the market, since markets can adjust by themselves. There are so many reasons that government should not intervene in markets too much. First of all, if the authority set pricing or distribution, this action, to some extent, will limit consumers’ freedom. people should have rights to choose what kinds of products they want to buy. Also the intervention of government would probably destroy the balance which market makes itself by “a invisible hand”.
On the other hand, however, for some certain products, such as alcohol, drugs and cigarettes, the intervention of government is of necessity. Because if government do not control those products, some citizens, especially some teenagers, probably abuse alcohol or drugs badly. This circumstance will be very harmful to the society as well as those people themselves, if it occur. So it is the responsibility for government to impose heavy tax, set high price and control the distribution of those industries.
Yet, admittedly, government intervene too much sometimes. In my opinion, the authority should only take care of those products which should not be used widely within the society. Other products, like sugary drinks, energy drinks, junk food, which do not show a direct link with people’s health and social stability, should not be controlled by government. Otherwise, it will destroy the balance of market, and deprive of consumers’ freedom.
More importantly, there are both threatens and opportunities for those industries, which government intervene in. Threatens are pretty obvious: heavier tax decrease the profits and drive companies to increase the prices of those products, as a result, the demands will decrease accordingly. Yet, there are also two important opportunities of those industries. One is that when heavier tax is imposed by the authority, low-quality products as well as small-scale companies cannot survive in the market so that provides a stronger competitive power to those large companies. The other is that when the domestic market shrinks, this will force those influenced companies to go outside and explore a larger market.
In conclusion, government intervention, in my opinion, is necessary but only under some circumstances. Most markets have the ability to keep balance by themselves.