Introduction

U. S government intervention in the market greatly affects the world economy. Being the largest country in terms of its trade, a single decision of U.S government affects the world trade and thus the economies of the world. If U.S government increases its imports, it increases the exports of the other country from which it is importing the respective commodity. Thus the world economy contracts and expands due to the effects of U.S government intervention. These intervention sometimes affects significantly and enhance the economies of the world while other times, it severely affects the economies.

Thesis Statement

“By subsidization of corn and agricultural products, U.S government intervenes in the market and affects the world economy by changing its prices”

Discussion

In modern times governments have shown interest in participation of the economic process. State intervention in the economic system has been almost since the appearance in top of this social organization. At first military and political reasons led governments to participate in the production and attempt to control commercial activities. The mercantilist era was characterized by excessive state interventionism, later denounced by the classical economists.

Despite the proposal of the classics, the state had to intervene in various aspects of the economy in the nineteenth century.  With the rise of the Welfare state, state intervention was significantly expanded the field of social security and intervention in the labor market. But it was not until the 1929 Depression and World War II when government intervention was expanded significantly. Interventionism in times of economic depression and war expanded the functions of government and increased government spending and even after the return to peace hangs some expenses, never returned to their previous level (Portney, 2003, 203).

Organization and market Behavior

The market is the sum of individual rationality and is not concerned with addressing the problems of assembly and long-term system. From the perspective of system, performance is important, but above all it is more important to create the stable conditions through the construction of basic infrastructure and public goods, hence the need for the state emerged. The market is not without its fragmented nature of decision making, let alone when oligopolistic structures are dominant and their decisions do not guarantee a proper strategy to the needs of industrialization. Under these conditions, it requires an instance given the capacity to organize as a "collective actor" the system of economic relations (Robbins, 2007, 67). 

State intervention may be analytical, in that it encourages the private economy to perform certain actions. Public sector action over the economy may take the form of regulation of various economic processes through legislative activity under the institutional framework within which to develop the production, trade and finance or by manipulating and controlling variables significant economic guiding the private sector through fiscal policy, monetary and commercial. Furthermore, state intervention may be through direct public sector intervention in economic activity. 

Causes of Government Intervention

It developed the state's role as manager of equal social opportunities, creating the economic structure of a welfare society that provides education, health and protection through the generation of benefits and pensions for ...