Government regulation is necessary for ethical conduct by businesses since it ensures that there is fairness. Without laws, some companies, especially big ones with many resources at their disposal, would advance themselves through dishonest means. For instance, it would be unethical for a large firm to malign a smaller one as a marketing strategy. Government involvement in business also protects consumers by ensuring that goods sold in the market attain a certain standard.
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They provide further protection with regards to debt collection, credit scoring, occupational licensing and housing codes. In addition to this, the government ensures moral conduct in business by regulating prices. The idea of self-regulating markets is enticing in theory but impractical in practice. Cost can sky-rocket, especially where the demand for a product is inelastic (Ferlito, 2017). For instance, insulin will always have demand even when prices hike. The government can regulate this by placing a price ceiling. Government involvement and regulation in business are imperative for ethical conduct.
Political opinions affect how a person answers the question of whether the government should regulate business activities. For instance, Republicans would view government regulation as an infringement of free markets. They would support Adam Smith’s theory of the invisible hand that argues that government regulation negatively impacts both suppliers and consumers.
They would advocate for policies that prioritize business interests over labor unions, environmental concerns, and healthcare benefits (Pew Research Center, 2017). On the other hand, Democrats would advocate for government involvement to ensure societal benefits, such as those mentioned. They would argue that markets are not self-regulating and businesses cannot be trusted to behave ethically at the expense of their profits. People with different political views will also have diverse opinions on economic policies.
Ferlito, C. (2017). Who pays the duties of supply and demand? Forbes. Web.
Pew Research Center. (2017). Government, regulation and the social safety net. Web.