Regulation

What is regulation? When the government regulates private businesses and/or individuals by telling them When the government regulates private businesses and/or individuals by telling them What they must do What they must do What they cannot do What they cannot do Based on the government’s responsibility to protect the citizens’ life, liberty, and property. Based on the government’s responsibility to protect the citizens’ life, liberty, and property. Limits laissez-faire capitalism, which argues that the gov’t should not interfere with businesses or the economy Limits laissez-faire capitalism, which argues that the gov’t should not interfere with businesses or the economy

How does the gov’t regulate? Generally… 1) Gov’t passes a law that sets a requirement 2) Gov’t creates an agency to oversee the enforcement of that law Federal Communications Commission (FCC) Environmental Protection Agency (EPA) Princeton Health Department 3) The Gov’t Agency then inspects/oversees companies, and punishes companies that violate it (fines, etc.)

Why should the gov’t regulate? Basic Rationale: Big Businesses have too much power + influence. The people need the gov’t to step in and ensure that they are protected. Regulation will protect consumersprotect consumers price, quality, accessprice, quality, access protect workersprotect workers –Wages, benefit packages, conditions protect citizens from the negative effects of a particular industry or businessprotect citizens from the negative effects of a particular industry or business give smaller businesses a fair chance to competegive smaller businesses a fair chance to compete

Why shouldn’t the gov’t regulate? Basic Rationale: Gov’t regulation weakens the overall economy. In fact, it hurts the very people it is supposed to benefit. Regulation will actually cause businesses to raise prices and/or hire fewer workers cause businesses to raise prices and/or hire fewer workers stifle the growth of new businessesstifle the growth of new businesses benefit larger companies + hurt small businessesbenefit larger companies + hurt small businesses small businesses (w/smaller profits) have less money on hand + can’t afford to meet the new requirementssmall businesses (w/smaller profits) have less money on hand + can’t afford to meet the new requirements big businesses have more power + are therefore able to influence the regulatory agenciesbig businesses have more power + are therefore able to influence the regulatory agencies waste taxpayers’ money paying for the agencywaste taxpayers’ money paying for the agency Sometimes, those with this view would support incentives rather than mandatory regulations