Government regulation has been a topic of debate throughout history. Some believe that the government regulates business too much, while others feel that the government does not do enough. I believe that the government is regulating business far too much, which is putting businesses out of business and causing many workers to lose their 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 interfering with production by halting innovation and discouraging risk-taking, resulting in declining employment, 2) government over-regulating by setting standards for every aspect of manufacture when it could allow businesses to set overall objectives for their business, and 3) regulation costing too much in business compliance, which is passed on to the consumer and ultimately forces the company out of business. The objectives of safety and health will be better 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 cost of regulation outweigh the benefits? I believe they do not. Regulatory programs are normally 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 over an alleged problem.
When this happens, it pressures Congress to pass a reform law out of fear of not being reelected. Media groups also aid in creating panic by focusing on the bad instead of possible solutions to fix the problem. The result is that Congress passes a reform without much thought and creates costly new standards that may make little difference in the world. A good example of this occurred during the adoption of the auto emission standards in 1970. Congress passed a bill with little debate and few people had any idea what the bill was about, resulting in costly reforms and forcing cutbacks on business expenses.
In all of the cases in 1970, 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, a University of Chicago economist, conducted 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 similar to 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 fewer restrictions on new drugs, unlike the U.S.
Companies with conservative policies towards new drugs believe that regulation interferes with production, halting innovation and risk-taking, which results in declining employment. In other words, regulation costs prevent businesses from investing in new ideas and technology, which hinders expansion and the ability to hire more workers.
Regulation overregulates 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 on mandatory regulatory reforms that do not apply to their business. Regulation costs too much for businesses, which is passed on to the consumer and results in increased government payrolls. Cutting back on regulation costs would allow businesses to lower their prices and provide 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 decline. As you can see, safety, health, and productivity objectives can be better achieved in the absence of government regulation.
With less regulation, businesses will offer better technology, improved drugs to care for the sick, and allow for a greater employment rate. In government regulation, the costs do not outweigh the benefits and unfortunately do more harm than good.
