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Government Regulation Essay, Research Paper

Government Regulation

Throughout history there have been many different opinions about

government regulation. Some believe the government regulates business too much

others feel that the government does not do enough. I believe the government is

regulating business far too much and furthermore putting businesses out of

business and causing many workers to lose jobs. In this paper I will point out

the common problems dealing with government regulation. I will also focus on

three major aspects of government regulation which include: 1) regulation

interferes with production by halting innovation and discouraging risk taking,

resulting in declining employment, 2) government over regulates by setting

standards for every aspect of manufacture when it could allow businesses to set

overall objectives for their business, 3) regulation cost too much in business

compliance, which is passed on to the consumer and finally forces the company

out of business. The objectives of safety and health will better be achieved in

the absence of government regulation. Government regulatory agencies have spent

billions of dollars and there is little evidence that the world is any better

off than it was without the agencies and costly reforms. When reading further

ask yourself the question, does the costs or regulation out weigh the benefits,

I believe they do not.

Regulatory programs normally are started by a group of people with a

single interest and pressure the government and people to believe that there is

a major crisis, creating panic to an alleged problem. When this happens it

pressures Congress to pass a reform law in fear of not being reelected. Media

groups also aid in creating panic by focusing on the bad and not the possible

solutions to fix the problem. What happens is Congress passes a reform that

they have little thought over and create costly new standards that could make

little difference in the world. A good example of this happened during the

adoption of the auto emission standards of 1970. When Congress passed a bill

with little debate and few people having any idea on what the bill was about,

creating costly reforms and forcing cut backs on business expenses. In all of

the cases of 1970 the Congress chose to regulate instead of the alternatives;

court penalties for polluters, tax penalties for employers with poor safety

records, or government-funded information programs. ” If the health and safety

regulators were created in response to nonexistent crises, it is not surprising

they have made little impact on morality rates.”(Crickmer 1980)

Sam Peltzman, University of Chicago economist, did a cost-benefit

analysis of the drug regulations that followed the thalidomide tragedy in Europe.

In his analysis he focused on the Food and Drug Administration (FDA) which is

alike the older single-industry regulators and some of its problems are typical

of most health and safety regulation. He found that the new drug laws were

costing far more than the benefits achieved. In Britain more lives were being

saved than in the U.S. due to the fewer restrictions on new drugs unlike the U.S.

which have conservative policies towards new drugs.

Regulation interferes with production and halts innovation and risk

taking resulting in declining employment. This is to say, because of regulation

costs, the businesses do not have enough money to invest in taking risks with

new ideas and technology. This does not allow the company to expand and hire

more workers. Regulation over regulates by setting standards for every aspect

of manufacture rather than setting overall objectives that businesses could meet

in whatever ways they devise. This would allow companies to focus on the

problems at hand rather than spending money for the mandatory regulatory reforms

that do not apply to their business. Regulation costs too much in business

which is passed on to the consumer, and in increased government payrolls. If

the regulation costs were cut back it would allow businesses to lower their

prices and allow a fair price for the consumer. In some cases government

regulation will drive weak companies out of business and the standard of living

of those affected will go down.

As you can see, the objectives of safety, health, and productivity will

be better achieved in the absence of government regulation. With less

regulation businesses will offer more and better technology, improved drugs to

care for the sick, and allow a greater employment rate. In government

regulation the costs do not out weigh the benefits and unfortionatly do more

harm than good.

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