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Government and Concept of Welfare in Economics.

Alfred Marshall gave the concept of welfare in economics, he argued that society should produce those goods that are beneficial and not harmful. We can say it, he discussed about positive externalities. For example, he suggested to produce drinks instead of wine because wine is against human health and government should make restrictions in this regard. He focused on welfare by goods and laid down the base of welfare economics.
We now analyze Marshall’s definition deeply that how government can help society in the improvement of social welfare.
Government should make, for welfare, free trade policies and the opportunities to be given to peoples to buy and sell goods and services in international markets and share contribution in bilateral trade.
Government should discourage production of health hazardous products like Tobacco, Wine, and some chemicals etc. though a labor class is engaged in production of these goods, but in broader sight it is no more than social welfare.
Government may improve welfare by giving free education to the citizens of the country and as the educational level increase the ability of person to choose for best will also increase, means good economics system to be established and development will take place.
Taxation system is the most important indicator of social welfare. It means that with small change in tax rate contingencies may be seen. According to cannon of taxation given by Adam Smith in which he said that the tax should be of broader nature, means tax system must be in whole system in industries, in agriculture or in services sector. The tax payment procedure should be easy and free from ambiguity and easy to understand by layman. Government can improve welfare by defining proper tax laws clearly. Peoples does not like to pay tax without knowing that the tax goes to government will later used in government expenditures on development projects. Therefore, government should make transparent and corruption free system of taxation for well-being of the society.
High interest rate is not welfare of the people. Like Islam stress too much on welfare and forbad interest and most of the economist believe to reduce interest rate because low interest rate generates high investment and consumption and income distribute in the whole society equally. So government should make proper interest rate policy (Monetary policy) for the welfare of human being as define in economic systems.
The other important issue is that whether government should control the whole economic system or not? The answer is….. ‘Yes’. There may be thousands reasons and may be ten of thousand counter questions but I believe that government can control what that cannot easily be controlled by others. But on one condition that there must be strong economics policies made by government for the benefit of the society and must have sound control over implementation of the laws.
In the aforesaid six points that we discussed concentrate on one concept that is welfare and if government makes effective policies of trade, taxation, production etc. then the Demand/Supply (Market forces), prices, interest rate, inflation level, and infrastructure will get improved and there will be welfare everywhere in the system.

For any suggestion write to me:
Mr.AsadIshaq@yahoo.com
Mr.AsadAwan@gmail.com
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