Market intervention

A market intervention is a measure that modifies or interferes with the market, usually done by governments, but also by philanthropic and political-action groups.

Examples of market interventions

  • Bailouts pay (usually tax) money to people or organizations in financial difficulty; bail-ins transfer organizations from the ownership of their former shareholders to that of their creditors, cancelling the debt.
  • Competition laws aim to increase competition and prevent monopoly and oligopoly
  • Copyright is a legal monopoly granted on creative works
  • Minimum wages legislatively limit the lowest pay level
  • Monetary policy is manipulating the supply of money to attain economic goals; usually done by governments, as they are the ones that typically control currencies
  • Nationalization transfers a privately-held thing into government ownership
  • Non-tariff barriers to trade restrict imports and exports by method other than direct taxes
  • Patents are legal monopolies granted on practical inventions
  • Privatization transfers a government-held thing into private ownership
  • Quantitative easing occurs when the government buys government bonds, raising their price and lowering the return per unit price to people and institutions buying government bonds.
  • Regulation bans, limits, or requires some market activities
  • Subsidies and market/government incentives pay money to produce some desired change in recipients
  • Welfare is government support to individuals, in cash or in kind, often directed at basic needs

Levies

  • Bank levies are when banks are required to give one-off payments to governments
  • Capital levies require people or institutions to pay a one-time taxlike payment, to the government or some institution the government wishes to support; often paid only if above a certain level of wealth

Taxes

Taxes are also market interventions.

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