Tuesday, March 28, 2017

So You Want to Be Rid of Government Regulation?

Businessmen grouse about the burden of government regulations and paperwork.   They don’t want “pesky” inspectors snooping around.  The New York Times recently reported that small business owners are happy that Trump will free them from these burdens.   Investors are clearly cheered by the prospect of lower corporate taxes and less regulation.  

But does this put the public at risk?  Before the industrial revolution, when the people who made things had a very personal connection with their customers and took pride in the craftsmanship of their work, there was no need to protect the consumer or general public from the actions of business.

But after the industrial revolution, that relationship  changed.  There was no longer a direct connection, no craftsmanship.  Mass production became the norm, with workers toiling under terrible conditions, and profit became the main premium for the businessman, the main source of pride, not the product.  During this period, in the late 1800s and early 1900s, both smaller industries and large conglomerates became rapacious, with no concern for either their workers, their consumers, or the environment.

To protect workers, consumers, and the environment, the federal government began to pass laws and enacted regulations to force industry to act in a responsible way.  (See my post, “The Responsibility Crisis.”)  The need for such oversight is as great today as ever because of investor pressure on industry to constantly increase profits.

If the business community wants to get rid of government regulation, then all businesses must have in their articles of incorporation language that speaks to their responsibility to their workers, their consumers, and the environment.  And those articles must provide for both regular impartial reports regarding their actions and an easy means for workers or effected third parties to complain and sue if they are not meeting their responsibility.

Corporations are a creature of the law and are protected and favored in many ways because they were perceived as providing a benefit to the greater good.  If they cannot be depended upon, on their own initiative, to protect others by refraining from actions that would harm their workers, their consumers, or the environment, then it is government’s responsibility in its role of protector of public safety to regulate their actions.