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This is a highly contested issue. Following the lead of the father of modern economics, Adam Smith, contemporary libertarian economists, exemplified by Milton Friedman and his followers, believe that social well-being is maximized by minimizing government involvement in the economy. They say that government involvement should, in effect, be limited to ensuring good government, maintaining law and order, and the defence of free societies. At the other extreme, socialists believe in a strong role for government and government ownership of the means of production and distribution. Under a socialist regime private ownership is restricted to personal belongings and effects. The reality is that the last century has seen the mixed economy prosper with government involvement through legislation and regulation pervading the economy. In recent times, the extent of government ownership of the means of production and distribution in mixed economies has typically diminished although funding of health and welfare services has grown strongly.
Professor & Head of QUT's School of Economics and Finance, Tim Robinson
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