IAFF 6101 Chapter Notes - Chapter 4.2: Pareto Efficiency, Bangladesh, Grameen Bank
12 May 2016
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Free markets are important in both significance (i. e. meaning of freedom) and function. Acknowledge the role and benefits of trade and exchange, but examine what the consequences are: private profit motives may run counter to social interests. Balance the role of the government/other political and social institutions with the market functioning. Market mechanism doesn"t solve every economic problem -> not all goods can be marketed (e. g. public goods, mixed cases such as basic education) Fiscal prudence fear of budget deficits and inflation: anti-deficit radicalism has to be distinguished from genuine financial conservatism. Power of the market should be supplemented by the creation of basic social opportunities for social equity and justice (143). Apply financial conservatism, not to cut benefits to the poor, but rather where public resources are not being used to achieve social benefits. Financial conservatism living within one"s means -> reduce large budget deficits (should not reduce social spending)
