only allows the most economically efficient use of resources as it
has many functions which prevent it from being inefficient and
makes it unbiased to public opinions. Although by allocating
resources fairly, it may not allocate them to what benefits socie-
ty optimally, leading to a loss of welfare. Yet in spite of this, a
neoliberal may argue that while governments claim consumers
have imperfect information, so do governments themselves and
hence should not act on such intel.
You may favour a laissez-faire approach as suggested by Adam
Smith due to the markets ability to allocate resources in an un-
biased, rational and efficient manner which the govern-
ment may not be able to replicate. However, despite the re-
sources being allocated equitably, do workers who work in over-
crowded, poorly vented and hot sweat-shops at the market dic-
tated price have improved standards of living? Most likely not,
the fair allocation of resources may have adjusted for the supply
and demand of them but not for us. In situations like these the
free-market approach seems to fails to meet the social optimum;
which only leads to a loss of welfare. I therefore believe that an
economy should be left to its own accords apart from situations
where there is a loss in welfare, which in these instances the
government should intervene in order to prevent this and re-
store the market to its social optimum.
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