Extract E (lines 14–16) states that ‘The market economy is not going to create the jobs by itself for those workers who are most affected by the change.’
Extract F (lines 4–5) states that ‘taxing productivity-enhancing tools like robots or machines makes no economic sense.’
Use the extracts and your own knowledge of economics to evaluate whether governments should allow markets to respond freely to the opportunities and challenges presented by technological progress, without any state intervention. (June 2018)
Plan
- Intro - market failure, government intervention, government failure, price mechanism
- P1 - gov should intervene
- robots have negative externalities in production?
- indirect tax (robot tax)
- Evaluation - government failure (information + robots have a benefit to society as well)
- P2 - leave it to market forces
- price mechanism
- excess supply of retail workers
- incentives to learn new skills
- Evaluation - time lag, inequality, relative poverty
- Conclusion
Market failure is when there is a misallocation of resources. If there is a market failure with technology, the government could intervene to solve this. Government intervention could also be damaging as there is a risk of government failure, and the free market may do a better job at allocating goods and services in the technology market.
In progress