Question

I need assistance in discussing this topic.

On Government Regulation of Business and the Limits to Economic Freedom

This is a forum set for discussing government regulations of business and the issue of whether and to what extent the government can and should restrict economic freedom with references.

Answer 1

Economic freedom is important as an end itself, as a critical component of human dignity, liberty and personal empowerment. However, just as important is the fact that economic liberty offers an existing recipe for economic progress and prosperity. Policies allowing for greater freedom in any of the measured areas tend to spur growth. Development, in effect, is an essential element in creating more job opportunities for people, thereby reducing poverty and building sustainable prosperity.

Nevertheless, economic freedom is not a single system. It is the lack of a single dominant mechanism in many respects. The Index has shown over the past 25 years that economic democracy isn't a dogmatic ideology. Instead it reflects an ideology that opposes dogma and supports different, and even opposing, economic growth approaches. The Index offers compelling evidence each year that it is not the policies that we fail to implement that hold back economic growth. Rather it is the awful policies that our governments put in place all too often.

Those who believe in economic freedom believe in the right of individuals to decide for themselves how to direct their lives. The added benefit from society’s point of view is the proven power of self-directed individuals, whether working alone or working together in associations or corporations, to create the goods and services that best respond to the needs and desires of their fellow citizens. No country provides perfect freedom to its citizens, and those that do permit high levels of freedom hold differing beliefs about which aspects of that freedom are most important.

In a market-oriented economy the primary regulator of conduct is societal norms, not government laws and regulations. These norms grow organically out of society itself, representing its history, community, and generations ' experience of learning how to live with each other. They direct our understanding of ethics, personal and professional relationship etiquette, and customer flavours. Democratic political systems at their best represent societal norms in their laws and regulations, but even democratic governments, unconstrained by constitutional or other conventional constraints, may pose significant threats to economic liberty.

The undue intervention of government into large spheres of economic activity entails a high cost for the whole of society. By replacing competitive political judgments, policy diverts entrepreneurial wealth and energy from productive activities to rent-seeking, the search for economically unearned benefits. The consequence is lower productivity, inflation in the economy and increasing prosperity.

Source- Book on Index of Economic Freedom