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Why the Public Good Is Worth the Cost -- Writer's Poke #337



At this week's Republican Presidential Candidates' debate, one candidate suggested that all government regulations that cost businesses money should be reviewed; those regulations that are found to cost businesses significant cash, and therefore, force businesses to layoff employees, should be immediately repealed.

This idea received a healthy amount of applause. It is easy to understand what regulations "cost," but it's more difficult to perceive what the "benefits" to regulations are. Sometimes it might seem as though government makes laws and passes regulations just for the fun of it, but in all seriousness, when government passes legislation, does it do so with the primary purpose of forcing businesses to layoff employees? If not, what are the purposes behind the legislation, and does the legislation successfully help ensure that businesses meet these purposes in a way that they would not otherwise?

One example might be something like the government requiring automobiles to obtain so many miles per gallon (MPG) on average. In this way, fuel efficiency for the average car goes up over time. Opponents of regulations might say, "No regulations. Let the market decide if it wants more fuel-efficient cars." But these same opponents are suggesting that such a regulation is costing the car industry too much money; so, if the "market" decided it wanted higher fuel-efficiency, wouldn't the car industry still be in the same fix? That is, to give the market what it demands, it would still need, potentially, to layoff employees to make it happen. In the meantime, it most likely would be doing nothing to increase fuel efficiency, and then when the market demand required it to do so, it would require more time to raise standards than it otherwise would if the regulations were in place for standards to gradually raise over time.

This is just one example, and maybe not the best example, granted, for why "cost" of regulations isn't the only consideration that needs to be examined. "Benefits" must be examined, too, as well as the hidden "costs" of no regulations to the overall health of the nation. Another way of looking at it, too, might be that the government is speaking for the market. That is, in the above example, people do want cars with higher fuel efficiency, which is why the government mandated for this to happen.


In theory, at least, regulations and laws are established for the public good. Eliminating regulations and laws may win quick political points, but it may do nothing to serve the real interests of the people.

People need jobs, but what else do people need if  a country is to be successful economically and otherwise?

"We should favor innovation and freedom over regulation." -- George Allen

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