Question

It has been time and time again discussed that regulations in moderation would be necessary to maintain order. On the other hand, more regulations or excessive regulations would be tantamount to unwarranted control of the economy which could stunt businesses. In simple terms, free market economy (laissez-faire economy) operates effectively based on the market forces that govern the demand and supply. And the government is required not to muddle heavily into what has been instituted as 'let it operate by itself market'. In other words, the government is expected not to use excessive regulations, which can otherwise be regarded as interference, or which may be equivalent to command economy. Nonetheless, the government has the duty and responsibility to regulate the market in moderation. For instance, the government has relevant policies in place to issue licenses for those who run businesses. The government has been giving tax incentives for some businesses such as new entrants, based on relevant legislation (i.e. tax policy). Such activities are, of course, acts of regulation. The logical argument would be that the government should not use excessive regulations that would be in contravention with the principle of the market economy enshrined in the Constitution. The point is that some level of regulation has always been in place. Thus, we need to make distinction between moderate regulations and excessive regulations. That’s why when strict regulations are observed, there has always been a request (sometimes made by consumers, or advocacy groups) for deregulation. Deregulation would happen when Congress repeals undesirable legislation. What do you think?

Answer 1

Moderate regulation by the government is necessary for the economy to function properly. If markets operate freely with no government intervention then public goods will become unavailable in the economy as profit maximization is the goal of market players. Thus, moderate regulation by the government is needed for the markets to function effectively.

Deregulation of un necessary laws of the government which have become extinct or are years old is needed to lower the burden on the government. These laws increase the burden of the government and leads to excessive control of the government. More over these laws are years old which have no relevance now. Thus, even for moderate regulation in the economy undesirable legislation needs to be removed.