The system is believed to be self-correcting. Economic rationalists, however, readily acknowledged that rigidities and distortions may hinder the achievement of equilibrium. Movement toward equilibrium is brought about by changes in relative prices. For economic rationalists greater efficiency is a sacred goal. Increased competition and the unlocking of market forces are the key means to obtain it.
Economic rationalists are highly suspicious of government intervention.
They believe that the central aim of policy should be the establishment of a framework in which the efficacy of market forces is maximised and hence where resources can be allocated as efficiently as possible. Policies should therefore concentrate on improving the dissemination of information, improving the mobility of labour and other resources, discouraging restrictive practices and, to state the obvious, trying to encourage as competitive a system as possible. Economic rationalists believe that the source of capitalist drive, the inherent vitality of the capitalist system, resides in the private sector. To the extent that the private sector operates less than optimally, a major reason is the plethora of government regulations which hamper its efficiency. Furthermore, the larger the public sector the less dynamic and the more constrained will be the private sector s entrepreneurial spirit.