“Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government- in pursuit of good intentions- tries to rearrange the economy, legislate morality, or help special interests, the cost comes in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player” (M. Friedman, 1979).
Using economic theories discussed in Block 3, and providing examples, critically discuss Friedman’s claim that inefficiency results from active Government intervention.
