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The experience of various countries over the past 150 years suggests that a mixed economy, with an appropriate combination of free markets and government intervention, is most conducive to prosperity. The government must create a level playing field while prohibiting abuses. Public investment and private investment are both necessary.
The government must provide public goods—education, infrastructure, the rule of law, and a sense of respect for social obligations. The global financial crisis is a reminder that lack of regulation of financial markets invites disaster. The financial abuses that led to the crisis also show that the profit motive must be tempered by ethical conduct in business, which the government can foster through regulation and uncorrupt leadership.
Professor of Economics at Swarthmore College, Stephen Golub
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