Government Regulations

Those on the Left see government regulations as an essential function of government which creates necessary restraints on business for the good of all. Those on the Left generally believe that regulations ensure corporations respect workers' rights and the environment. Many on the Right believe that government regulations are too often an unnecessary interference that imposes absurd and unreasonable burdens on businesses, often creating negative unintended negative consequences.

For example, those on the Left may say that minimum wage laws — a regulation that imposes the minimum amount of money a company must pay a worker — protect workers by ensuring a living wage, which will reduce poverty and turnover, spurring job growth. Those on the Right, however, argue that the minimum wage is an unncessary regulation that would be a burden on businesses and would have the unintended consequence of artificially inflating the cost of low-skilled labor, causing businesses to hire less workers — perhaps turning to automation instead — raising unemployment levels and increasing poverty.

The libertarian right often sees regulations as a business strategy used by large companies to eliminate their competition. Bruce Yandle, Dean Emeritus of Clemson University's College of Business and Behavioral Science and Alumni Distinguished Professor of Economics Emeritus at Clemson, argues that behind almost every instance of “public interest” regulation one can discover a private interest who will benefit from it and who is bankrolling the passing of that regulation. For example, liquor companies have contributed to legislation that would impose restrictions on the marjuana industry, and chemical companies have worked to restrict exports of natural gas. Doing so benefits their own business.

Both the Right and Left also recognize the problem of the “revolving door” between legislators and the entities being regulated by them. Too often, people who used to be regulators end up working for the companies they used to regulate, and vice versa, raising the problem of a conflict of interest.

Conversation Catalysts: 

Bruce Yandle’s “Bootleggers and Baptists:  The Education of a Regulatory Economist”

Contributors: 

Julie Mastrine, Michael Strong, Arthur M. Peña

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