There are (to put things in polarized terms) two schools of thought on some economic issues that have more or less been continuously battling for many years; the argument seem to have come to the foreground recently. One is the advocacy of complete laissez-faire—that is, the government should totally keep hands off business and then the economy will flourish, and all will be prosperous and otherwise rosy. This approach is exemplified by the late Milton Friedman, who for many years was one of the lights of the University of Chicago economics department, and who won a Nobel Prize in economics.
The other school maintains that government needs to have some controls on the commercial and financial sectors.
For me to say this is giving the devil his due; but there seems to be some evidence that Friedman's ideas work. For example, Friedman and some colleagues went into Chile and applied their ideas there to a badly faltering economy, and turned it around.
But what about the fact that businesses, left to their own, might sell us food and drugs with harmful or even poisonous adulterants, contaminants, and so forth (as happened with dog food and, I believe, baby formula from China)? What about what happened just a few years ago when greed, folly, and mistakes on the part of Wall Street investment bankers plunged the US and even world economies into crisis?
I think the answer is a middle course on the part of government. To have some regulations in place, on manufacturers of food and drugs; on the financial sector; and some other business areas does not necessarily mean stifling, hamstringing, or even seriously hampering business as those on the Right—corporations and their lobbyists—have been trying to tell the American people.
Update, September 19, 2012
A commentor (see comment below) says that it's Libertarians who feel there should be no regulations. I'll accept that. But, be they libertarians or Republicans, the people who feel that we don't need any oversight at all--that people will do right if you just leave them alone, and we don't need government interference--have a very rosy view of human nature. I can't understand why they haven't woken up, in the light of all the recent scandals that have shown human greed and the ability to cheat and lie. Liberals like me feel that the government should protect the weak from the strong, and that that idea is embodied in the Bill of Rights.
Copyright © 2012 by Richard Stein
Subscribe to:
Post Comments (Atom)
Nobody advocates lifting all regulations except the Libertarians. The issue is how much regulation is enough. That's on the ballot this year because the regulators have had a field day in the last few years and we're seeing the economic consequences.
ReplyDeleteOne unfortunate trend in the last decade is that Congress passes sweeping legislation that empowers unelected bureaucrats to make the rules with minimal oversight.
The trick is to balance the business interests who want no regulation at all and the regulators and advocacy groups that want to regulate everything. Considering the economic impact of new regulations, as the Republicans suggest, may be a good start.