Please enable JavaScript.
Coggle requires JavaScript to display documents.
Regulation - Political or Market? - Coggle Diagram
Regulation - Political or Market?
Free enterprise system isn't perfect
Best ways to deal with imperfections in this system
Examine alleged defect, look about the non - market political regulation adopted, non - market political solutions
An alleged defect - improperly installed wiring
This electrical subcontractor is profit motivated, Cut cost is the best way to make larger profit, use least skilled labor is the way to cut cost
The "cure" - occupational licensing
Electrical subcontractor should be regulated by some disinterested nonprofit oriented body, government is licensing approved specific form of regulation, this is enough straightforward
Good intentions aren't enough
People endorse occupational licensing because to intend that all buildings to be safer from electrical hazards, little illustration is an useful reminder that good intentions aren't enough
Political regulations has unintended consequences
Licensing tends to reduce number of people practicing in the profession that is licensed, reducing number of people in any profession can raise the prices those people charge for their services
When prices of the service increase, number of people who can afford to pay those prices goes down, Do-it-yourself have wide range of abilities
Market regulation
There is no regulation of business at all, free enterprise main feature is free market, Give up one good to get more of another good
Producers are free to enter the competition can withdraw from the competition, there is a free market for profit seeking men & women
Courts
Easy to see how consumers competing or not competing effectively to regulate a business, this is easy if it depends, as most do on repeat patronage
Many advocates of free enterprise believe there is a need for limited government
In advocates of free enterprise, government is out of bounds
Conclusion
In the free enterprise system, their are tragedies, utopia isn't an option to balance the findings
Findings causes to have doubts about political regulation, harm due to regulation is harm to the political regulation was intended to correct
In free enterprise system, courts may provide some regulation, market regulation is the most powerful regulator, best thing is to get closer to ideal