Wednesday, June 15, 2011

Government Regulation and Laissez Faire

I came across an interesting request for anyone's thoughts on government regulation/intervention and business autonomy. Indeed, this has been one of the most relevant questions in 2008 and 2009. Yeah, it's at least two years old, but the issue I suppose will persist. Remember all the planning and media discourse by monetary officials and financial pundits in the US, about how dismantling the 'too big to fail' firms would be done just as long as they get the QE/bail out plans approved? Well, too big to fail I suppose is still too big to meddle in.

I personally don't think there's a set of immovable rules regarding the balance of regulation and free-hand business conduct. The "churning" of the economic system and of the entrepreneurial spirit relies on constant adjustments (initiating plans and strategies, executing them, controlling the operations, monitoring the results, conducting feedback operations). This is what defines "economic life" in a given economic setting, where the premise is "the efficient allocation of scarce resources." It's only natural that people are going to compete and "fight over" the scarce resources (whether these are raw materials, money, manpower, etc.). Lobbying, under the table and behind closed door dealings are also a part of this reality. Let's not be naive about these conducts whether they are improper or not is dependent on interpretation. Again, the basic premise is the desire to rake in as much of the scarce resources as possible. Economic systems and countries around the world have various situations and circumstances. Everyone is just trying to get by. Regulation is healthy when it promotes the welfare of the general public/the health and interest of the local economy, but it will be strenuous if it will result to cronyism that will only favor those close to those in power. Too much autonomy may leave consumers overwhelmed by those in the position to control an industry, on the other hand. Think about oil oligopolies and corporations that stand as food empires, whatever they deem fit to price for their products cannot be overturned by the public especially if they are staples/necessities. The struggle to gain a foothold of the "ideal balance" is always present.

All compositions, statements and opinions of the author are copyright © Earl T. Malvar 2009-2010. All rights reserved. There is no honor, respect, admiration, intellectual and academic dignity garnered through plagiarism.

No comments:

Post a Comment