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Is Laissez-Faire capitalism more effective than regulated capitalism?

  • Look at The History.

    In somewhat recent memory, the last Laissez-Faire Presidents we had were Warren G. Harding and Calvin Coolidge. There is a little known fact, that when Harding took office he inherited a major recession, that could have turned into a Depression. However, Harding's Laisses-Faire principles, and idea of a nom-interventionist Government got The Nation out of the struggle, and gave us the mist prosperous period in U.S. History. Coolidge, of course, continued this. However, Coolidge declined to run again, and one of his cabinet members, Herbert Hoover became president in 1929. They call him a "Laissez-Faire Capitalist", yet refuse to acknowledge his wage control policies, and his massive tax hikes. This next is key. Hoover's Presidency included the 1929, Stock Market Crash. For those who believe the crash caused The Depression, it is a complete farce. The REACTION, of The U.S. Government, which was tax and spend, spiraled The Country further down. Of course, after Hoover, we got Roosevelt, who prolonged the Depression through World War II. This is another unacknowledged fact. There is a reason why The Economy nearly went down again after World War II, and it was because of the fact that the regulatory "Capitalism" failed.

  • Logically More Effective.

    What government regulations do the economy is horribly destructive. Uplifting regulations, eliminating corporate welfare, and disabling corporations from dominating industries, you will enable small businesses to develop better and for corporations to face competition that keeps them at pay. This allows for a more pro-consumer society wherein the output of commodities increases with 1) the profit incentive and 2) the stimulation of the economy by allowing small businesses with natural products to combat corporations with artificial, processed foods.

    For instance, a small family-owned bakery with fresh bread will likely sell more than a corporation with processed wheat or flour in a free market. Why? Because their commodities are fresher, have better quality, and thus fulfill the basis of 'supply & demand' in the basic economics of laissez-faire. But regulations also are the reason corporations 1) ship jobs overseas and 2) corporations continue expanding. The government regulating big business causes them to invest in labor in other nations where sweatshop conditions are normal, and where women and children are starving in horribly-conditioned factories. Why? Because they don't have to pay so much to their workers if they have people getting wages of $0.30/hr as opposed to those they have to pay at least $7.25/hr min. To the workers in the homeland (U.S). Now, to explain the corporate expansion principles under regulated capitalism: not only can corporations ship job overseas and monopolize over foreign soil, but they can also put money into the political process to use Washington as their piggy bank. Therefore, if the government is 'hands-off' on business, and vice versa, because laws were established for it, we would have a much more effective system wherein businesses cannot effectively expand to high rates without being fair to workers through wages and labor conditions.

  • Capitalism cannot function in its purest and most effective way with regulations.

    Whats wrong with regulations? It causes outsourcing and America has lost 2.4 million jobs to China since 2001 because of it. The question is, why is that? It is a lot more complex than just that fact that we have a high minimum wage. China has devalued their currency to increase the amount of large corporations that move from American, as well as other countries, into China. Furthermore, America has the highest corporate income tax at 35%; this is the reason why apple makes their products in China and not California.

    Capitalism is not very malleable, when you add in all kinds of regulations you start to see its ability to work decrease. Democrats like to try and fix that problem by adding more regulations, the fundamental issue with that is that what they are really doing is tightening the belt that is around America's metaphorical neck.

    Posted by: Jpw
  • Functional society requires regulations.

    If the government were to completely leave the markets to themselves, some industries would be thrown into absolute chaos. Take healthcare. Without regulations, anyone could claim to be a doctor regardless of their training or education. In theory, you could spend hours researching all the 'doctors' in your area to figure out who actually knows the most or is best trained. But if you were incapacitated or in an emergency, you'd hope the person looking after you has at least gone to medical school. And if that person hasn't, well too bad. Likewise, we'd see the return of horrendous labour abuses, safety bypasses in the name of profits, and child workers.

  • Some Regulations Necessary.

    I agree that America has bad economic policies such as an absurdly high corporate tax rate, but economic and political philosophies should serve the people and the nation, not the other way around.
    If industry was completely privatized, as libertarians want, we would see things such as employers trying to hire foreign workers at low wages which would harm the people of our nation (this is happening in todays economy). We should impose regulations to stop things that harm the nation. That said, the trade deals and economic system of the US today have lots of problems and are not the way the economy should be regulated. Rather than disincentivizing the creation of American jobs, we should attempt to promote a merit based system in the U.S. while still prioritizing social and national interests.

    Posted by: Nawl
  • Regulation is better.

    Pure capitalism isn't sustainable by itself. Without government regulation not even the base of capitalism -the competitive market- is sustained. Many markets trend to be monopolized (like high tech or natural monopoly markets) or are in danger of collusion in oligopoly markets. If the US or the EU weren’t so regulatory, Companies like Apple or Microsoft would easily exploit their privileged positions in their markets. What would stop companies to collude if government didn't do so?
    What's more, Laissez faire has some gaps. Which limit determines the minimum role of the government in an economy? As far as the consumers aren’t rational, The government has to take care of the markets, Just like in legal terms, Forbidding or limiting them when necessary. The laissez faire theory would be ok with companies freely selling venom or weapons to any consumer, Not taking into account ethics or wellfare, Just the free market criteria. As instead, Government is needed to regulate markets like weapons, Chemicals and any dangerous stuff.

    Furthermore, Markets are known to have its periods of growth & depressions, And in times of depressions many producers sink and the markets get destabilized. Its ok if this happens to washing machines market or newspapers (no one needs them to survive), But what about food or electricity sectors? If there are food shortages or electricity gets overpriced the country will starve (as food or electricity prices will rise and many people won’t afford to pay it), Or many basic supplies will stop to run due to electricity prices (like hospitals). With a government regulation we get a stabilisation of markets (although not achieving the maximum efficiency, We avoid the risk of failure or destabilization of the most basic markets (like food supply, Electricity or health).

    If you look at OCDE or WorldBank databases you’ll find an increase of inequality in many western countries from the 70s (just when the neoliberal shift started) and it’s increasing nowadays. But what’s the most important: wealth should be gained in order to satisfy and make consumers happier. As markets have grown so much during the last years, We would expect that now people is happier, Isn't it? But this is far from reality. As Okulicz and Maya say in their working paper “More Unequal in Income, More Unequal in Wellbeing” people nowadays are less happy than in the 70’s. That’s because companies don't look for people’s happiness, But for their own benefits. As instead, The objective of the government is their people’s wellbeing, And although it doesn't usually has the capacity to be efficient in its market activities, It can redirect capitalist markets to a more “population welfare” approach. The less-regulatory policies of the last years have led to this outcome, And therefore I think a regulation is needed on markets.

    P. D. : Socialism would have overran capitalism if it hadnt changed to a more regulatory worker-friendly version, Which is the regulatory capitalism.

  • It's a trick question

    Obviously, this question is completely rigged and doesn't address the real issue. "Laissez-Faire" capitalism and "regulated" capitalism ultimately come up with the same result, but in different ways: socio-economic failure. There is no effectiveness for the common man under capitalism, there is only effectiveness for the bourgeoisie. The issue isn't between different types of capitalism, the issue is between capitalism and liberation.

  • There is no such thing as a free market

    Never has been, never will be. There are only transactions and transactions occur within specific frameworks, rules and regulations to define their boundaries most efficiently and effectively. Adam Smith knew that there would be collusion on pricing. Capitalism trends ALWAYS to monopoly power centers. Furthermore capitalism depends upon government for its existence. Dis regulated capitalism must distort the political economy for the benefit of the few to the detriment of the many. Those who think otherwise would do well to actually read some economic history. From the first gilded age in the u.s. to the destruction to lives and rights in the southern cone by Milton Friedman's Chicago Boys to the criminal Greenspan's admission of a "flaw" in his model over and over again we see the failure of the efficient market junk theology. As stated elsewhere there is nothing more utopian than a free market capitalist.


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