Governments: Control Society, Maintain Law & Order, Grow Economy - Essay Sample

Introduction

Governments exist to control society by maintaining law and order. A nation must have a common legal guide and norms so that everyone lives in peace without conflict or loss of life. Business activities are part of what people. It is the role of governments to ensure that resources are used well so that everyone gets a share without discrimination. Governments implements policies that provide a suitable environment for people in business to grow the economy. However, most governments from the 19th century tended to overregulate the business environment, thinking that they are doing it for the common good. From the late 1800s to the end of the 1930s, increasing government interventions and regulations of business tended to hurt the overall economy and the ordinary workers.

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There are various examples of how government intervention and polices negatively affect business. In the period between 1865 and 1900, the American economy had and increased growth with over 600%. This growth was as a result of extensive industrialization and agriculture in America (Leonard, 2009). However, the government introduced a policy that had a highly protective tariff against imported goods. This policy affected the southern farmers; thus, the government destroyed the agricultural economy in the south during that period. In 1928 the federal reserve bank of America adopted a policy that hurt the economy. Previously private players in the banking industry players themselves used to avoid a financial crisis by providing liquidity for other banks. However, the Federal Reserve Bank, a government entity, had a policy that limited banks access to emergency cash leading to the financial crises that became the great depression (Rauchway, 2008).

Increased government intervention in the 1920s led to a conflict between the government and American labor unions. Conflict with labor unions limits production ability of companies as most employees refuse to work, leading to a stalled economy. For example, from 1937 to 1938, the republican government had a conflict with CIO labor unions, thus affecting the economy negatively. The regulation of the transport industry by the government in the United States has limited its growth and expansion. The government determines its operation, and thus, the development of the sector is limited. It means that the managers of the railroad transport system cannot make any radical decision without reference to the government. A lot of public money is spent on railroad transport instead of allowing Rail transport managers to generate a profit on their own (Parker, 2018).

There are instances where government intervention and regulation of the economy is essential. In America, for example, at the end of the 20th century, the government introduced the Sherman Antitrust Act that limited the domination of monopolies in a single sector leading to exploitation (Leonard, 2009). These monopolies controlled steel, railway, and Energy industry and everybody else had to bed to their rules of the game until the government stepped in. It was a win for the American citizens against the monopolies when government got involved in the business environment (Parker, 2018).

Conclusion

Evidence has proved that final government regulation of the economy is unhealthy for business. It brings an unnecessary restriction that hinders the ability to do business by limiting innovation and expansion. It is essential for government leaders to ensure minimal government restriction and intervention in the business sector and to allow private investors space to invest and expand themselves. As discussed in the paper, from the late 1800s to the end of the 1930s, increasing government interventions and regulations of business tended to hurt the overall economy and the ordinary workers.

References

Leonard, T. C. (2009). American economic reform in the Progressive Era: its foundational beliefs and their relation to eugenics. History of Political Economy, 41(1), 109-141.

Parker, S. C. (2018). The economics of entrepreneurship. Cambridge University Press.Rauchway, E. (2008). The Great Depression and the New Deal: A Very Short Introduction. Oxford University Press.