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Potential drawbacks of a government being too involved in the free market include stifling competition, hindering economic growth, and potentially leading to a system akin to communism. In such a system, the government controls how businesses make their money, which can be detrimental to a progressive, growing economy. A competitive market is essential for meeting supply and demand effectively. However, critics argue that such a system can be unfair, favoring only a few.
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When any government is too involved in the free market, it becomes not so free. The government is already the taxer of the income of corporations and its individual citizens. Additionally, if they become allowed to control how businesses make their money, as well, then that would be called communism. This type of system does not work because it is not progressive enough for a growing economy. The market must be competitive for it to thrive and meet the supply of demand. But some argue that it is an unfair system, rigged only for the few to survive.
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