Q&A: Why do corporations need regulations in a Capitalist System?
Posted by James on January 6, 2013 · 6 Comments
Question by A Peaceful Rebel: Why do corporations need regulations in a Capitalist System?
What causes the need for regulation? Is it because of design flaws, or structural flaws within the corporation itself? What is it?
Best answer:
Answer by sound_of_the_silenced3
They dont. We just need a GREAT judicial system so that people injured, and defrauded can have legal recourse.
Give your answer to this question below!
Mostly.. because we don’t let capitalism self regulate itself.
GM can’t get it’s house in order! Should they go bankrupt and be forced to restructure? Hell no! We’ll give them tens of billions of dollars!
Some degree of regulartion is always needed if you want to protect consumers. I am all for small government and minimal regulation, however I do agree in basic regulations like anti-trust laws and anti-gouging laws…keeps them honest, because nobody is immune to the temptations of greed.
I know, we shouldn’t have any regulations! For the same reason I think we should have no laws either! Does anyone seriously think there needs to be laws and rules to maintain a peaceful society? history has shown that people always do the right thing, over and over. Laws of any kind are not necessary.
hope u can tell im being sarcastic
People need to look into the concept of ‘manufacturing consent’ and how modern marketing and PR practices affects the purchasing choices that individuals make in society. It’s why pure capitalism in today’s world will always lead to disaster.
SInce corporations are people, isn’t that kind of asking, if we are a free nation, why people need laws.
Below is an official definition.
“Governmental regulations, also called rules, specify mandatory (legal) requirements that (1) must be met under specific laws and (2) implement general agency objectives. These requirements may address health, product safety, operator/user safety, environmental effects, quarantine requirements, consumer protection, packaging and labeling, product characteristics, or other matters in the public interest. A regulation may consist of agency-developed technical specifications or requirements, or may permit use of particular private sector standards as a means of compliance.
The U.S. Federal regulatory system is designed to protect and improve the health, safety, and well being of U.S. citizens and to protect the environment. It seeks to improve the performance of the economy without imposing unacceptable or unreasonable costs on society. U.S. regulatory policies recognize that market-place forces are generally the best engine for driving economic growth. U.S. regulatory policies emphasize that regulations should be cost effective, consistent, sensible, and understandable, and that the regulatory process should be open, transparent and fair to all interested parties. The NTTAA endorses the use of private sector standards to achieve these objectives.”
Regulations are put into place in order to protect the public and the environment. Business interests spend a lot of money disparaging regulations if they think they could make more money without them. Life without regulations would be very unstable and much more dangerous. Regulations on food production and storage probably save thousands of lives a year, for example. Yes, if your child died from tainted milk, you could sue, but your child would still be dead. The tradeoff is that milk production costs more, consumers pay more, and producers make less money because some people will choose other less expensive beverages to drink.
Free market capitalism is a theory, an ideal. It is a highly successful man-made system, but not a natural one, and thus there are–as with any human designs–pros and cons. The idea that government needs to leave the market alone to be free is a curious one, since without laws to enforce contracts and protect private property, capitalism would not survive. Think Somalia. For free market capitalism to work perfectly, there must be many buyers and many sellers and everyone must have complete knowledge. That is, everyone must know everything about the product and fully understand their choices. Breakfast cereal is a pretty good example of this. There are many sellers (or at least several producing many products) and many buyers. However, when there are only a few or only one seller or buyers, the market does not work as well. That is why monopolies have been restricted. Another area where the free market doesn’t work as well is in the area of public goods, like defense or running prisons. That is because there is only one buyer who is compelled to buy the product but only a few sellers, who then have a great advantage because they have little competition.
The recent talk of “regulatory burden” is partly corporations taking advantage of an anti government environment to decrease future costs. It does make it harder for corporations to compete with corporations abroad in places like China where there are few environmental restrictions, but where the environment is very degraded. A good friend of mine who has travelled the world just returned from a China tour. She said the filth was nearly unimaginable. But, I digress.
Regulations are necessary, so when I hear people say “get rid of regulations,” I say, “Okay, which ones.” Be specific, and maybe we can get somewhere.
BTW, the United States, as all 1st world countries, has a mixed economy.