regulation of business

Anonymous
timer Asked: Jul 13th, 2014
account_balance_wallet $5

Question Description

Identify and discuss the government's rational for regulating businesses. Do you agree or disagree with it? Why or why not?

Tutor Answer

Alex Z
School: UCLA

The government regulates business because it believes that it can more optimally make decisions for the "greater good" than industry can/will alone.

I strongly disagree with this because, as Adam Smith correctly observed nearly 240 years ago, there is no more efficient mechanism than an unfettered free market in a moral society.

It seems like everything the government interferes with becomes crippled and is actually more prone to wild swings than it was without regulation.  To illustrate how regulation destroys, look at the various places you deal with government-regulated business in your daily life and think about how horrible that are...going to the Motor Vehicle Administration, going to the post office, going through airport security, dealing with the IRS, even the Federal Reserve itself is a massive failure (inflation 1813-1913 was effectively zero...1913-2013 inflation was over 2,250%).

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Review

Anonymous
Excellent job

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