COLUMN: Finding balance between business, regulation
Some of my business contacts and family members reported getting a recording saying my phone was not in service when they tried to reach me. Though they were eventually successful, I was concerned about the potential calls I might miss, so I called my local telephone service to get the situation corrected.
The company spokeswoman responded that the problem was the services my callers were using were probably some of the cheaper long-distance carriers. She went on to say that while those services were cheaper, they had poor service. She said they were asking their customers to call the government to complain about the poor service these companies were providing.
I pointed out that some people think it is a bad idea to have the government regulating the activities of businesses. She countered that in general she agreed, but in this case, it would be good for the government to get involved.
This encounter brings up an interesting point about government regulation of business. Many of the regulations on business have been asked for by businesses to control the actions of or stifle the competition from other businesses.
Occasionally, consumers are so abused by bad actors that the government has to step in and make some regulations to keep the whole industry or society from being destroyed by these bad actors. For example when bad actor banks or other financial institutions take advantage of unwitting consumers, people have a tendency to paint all the banks and financial institutions with the same brush. And some institutions cheat other institutions. With so much money at stake, it is not hard to imagine disagreements devolving into chaos, even deadly violence.
It is unreasonable to expect consumers to know as much about all of the possible tricks that can be played on them as the people working in various industries. If financial institutions get a bad enough reputation from the actions of a few bad actors, consumers could lose faith in the whole system. Consumers might stop investing, make runs on banks and start keeping their money in coffee cans or mattresses.
Since the country needs a vibrant banking system, doesn’t the government have some responsibility to make rules to keep the whole system from being brought down by a few bad actors? If the government doesn’t make and enforce these regulations, who should? Who will protect the consumer? Can our financial system survive by servicing only people who can afford big losses in an unregulated market?
It seems that business wants regulation when it works for their special interests, but not when it works in the interest of others, especially consumers.
While I can see how the government can over regulate and stifle innovation, having no government regulation leaves most of us prey to those business people who see profit as their only product. History does not treat kindly the notion that we can trust businesses to act in the interest of everyone without regulation. How do we find balance?
Lawrence Diggs, Roslyn, is an author and professional public speaker. Write him at firstname.lastname@example.org.