What economic theory supports government intervention to protect workers and consumers?

Liberalism or Keynesian economics is the economic theory that supports government intervention to protect workers and consumers. This theory emerged prominently during the 20th century, particularly in response to the Great Depression. Keynesian economics posits that active government involvement is necessary in economic matters, especially during periods of economic downturn or instability.

In this framework, the government plays a crucial role in regulating the economy to ensure stability and growth. This includes implementing policies that protect workers, such as minimum wage laws, worker safety regulations, and unemployment benefits, as well as consumer protections that prevent exploitation and ensure product safety. The notion is that government intervention helps to maintain economic equilibrium and address market failures, ultimately benefiting both workers and consumers.

In contrast, classical economics tends to advocate for minimal government intervention, relying on free markets to regulate themselves. Monetarism emphasizes the control of the money supply as a means to regulate the economy, while supply-side economics focuses on reducing taxes and regulations to stimulate production and economic growth, rather than directly addressing worker and consumer protections. Therefore, the belief in active government roles in economic affairs to safeguard societal interests is distinctly aligned with liberalism or Keynesian economics.