The Feld-Blog

Welcome to business school…. That’s right, my quarter in Washington DC has ended and I have turned to the flip side of the coin: studying in a business school program. As a Political Science major and having interned more than once in government and governmental think tanks, my mentors and teachers have inculcated me with one perspective on government. Political Scientists and government agents write assuming that accountability, regulation and consumer input are intrinsically valuable. Many even write under the assumption that the business sector (whether they get tax breaks or not whether they get incentives or not) is a mindless, heartless profit machine that will trample over the average American if government didn’t do something. On the flip side, economists and Business academics write under the assumption that market forces are supreme and regulation amounts to intrusion rather than accountability. Many even critique government oversight of business at any level in favor of strict implementing strictly free markets.

Obviously it is possible to over-regulate. The inefficiency of a government bureaucracy style could easily cripple many private sector businesses. On the other hand, the public has seen time and time again since the inception of large corporations that many CEOs will, in fact, heartlessly gouge the pocketbooks of unwitting Americans just to make an extra dime. They will ‘cook the books’ hide faulty or shoddy products, encourage the revolving door between managerial staff and boards of directors in order to corrupt companies’ internal managerial auditing, and even outright embezzle from customers and employees. Thus private sector business leaders and government officials and regulators must strike a balance that will bolster the American economy by encouraging successful businesses and protect the interests of the American consumers.

Business is not evil. Neither is government. Corporations represent the division of labor that allows our society to enjoy the quality of life that it does. Government represents the aggregated efforts of society to control forces that, if left unchecked, could threaten the good of society. Large corporations and businesses go hand in glove with government to produce societal good. We’ve seen how corporations left unchecked (such as Enron or Exxon-Mobile) can skim profits out of the pockets of the country. But we’ve also seen how over-regulation (such as protective tariffs on trade with other countries) can clog markets and torpedo market efficiency. Furthermore, when government and industry get too buddy-buddy (such as between the Department of Defense and no bid contracts with private defense companies), money hemorrhages from the pockets of taxpayers and the halls of congress.

So then it seems as if private Business must check and balance the Government and Government must check and balance Business. Free markets may be great in economic theory, but a world with no restrictions creates the potential for corruption. Regulation may provide accountability, but rampant regulation creates inefficiency.

Well this has been long winded, but I am fascinated by the different perspectives. Through it all however, I have come to believe that both play a vital role in the healthy survival of the lifestyle Americans at large enjoy.