Regulation

In a free market economy, governments regulate certain aspects of the economy for the good of consumers, of workers, and even of business owners. Although the motto of pure capitalism is laissez-faire—“leave it alone!”—even Adam Smith (the foremost proponent of capitalism) recognized that government regulation was needed for capitalism to succeed among imperfect people.

How do governments acquire the authority to regulate the economy—or, for that matter, to make any laws telling people how to live their lives? The many theories about government and the source of its authority can be sorted into three general categories: strong people seize authority and use their strength to tell others what to do, people give authority to the government to ensure safe and productive lives, or governmental authority comes from God and is given by God to those who rule.

These three theories can be combined. For example, some might believe that strong people seize authority and become rulers (“caudillos”) but that people allow that to happen and have the power to prevent a strong leader from arising or to transfer power from one strong leader to another. Likewise, some people (this author included) agree that government authority comes from God (as described in Romans 13:1-7) but that it is bestowed through the people; therefore, the people have a God-given right to overthrow one government and replace it with another when the first government is no longer using divine authority in a God-pleasing manner.

Under some theories, government must be strong so it can accomplish its purposes. Under other theories, government should be limited by the people so it does not rob them of their rights. One approach says that some problems are too big to be handled by anyone other than the government; another approach says that too much government is the biggest problem. Thomas Hobbes described government as a necessary evil, a monster that must be fed and maintained, but that also must be watched constantly and controlled to keep the monster from causing too much trouble and destruction.

So, governments make rules on behalf of their citizens. They inspect food and other products to be sure that they are safe and uncontaminated. They ensure that workplaces are safe and that workers are being treated fairly. They prohibit monopolies, trusts, and cartels, breaking apart businesses that otherwise could take advantage of customers and workers. They protect the air and land and water from pollution. They zone some areas for industry, some for sales, some for homes and neighborhoods, and some for parks and natural preserves.

All these regulations are part of the social contract, an agreement between the people and the government. The government claims strips of land from landowners, develops them as roads, demands that travelers move from place to place only on those roads, restricts the speed and other behavior of travelers (fining lawbreakers when they are caught), and charges for the use of the roads with taxes, licenses, and tolls. Most citizens accept the government’s right to do these things because we need roads; many kinds of trouble would follow if each citizen traveled from place to place as he or she wished, without government roads and without traffic laws.

Within that social contract, disagreements arise and compromises much be reached about the level of government regulation and the details of that regulation. Which pollution standards are beneficial, and which are excessive? Excessive regulations are costly to businesses and consumers. They can rob the economy of jobs and businesses. Yet insufficient regulation leaves people in danger of being poisoned by pollution. Likewise, minimum wage laws are controversial. Some people insist they are needed to reduce or prevent poverty; others say they increase poverty by raising prices and by persuading businesses to hire fewer workers, replacing them with affordable machines. Lawmakers must consider all sides of such a debate. They must decide for themselves which regulations help the people and which are excessive. They must vote according to those decisions, and they must explain their votes to the voters who will decide if those lawmakers keep their jobs or will be replaced.

Some regulation is needed. Some regulation is beneficial. When the government assumes the job of controlling the economy, the people suffer. When the government uses its power to make decisions that are better made by the business owners, the people suffer. A free market, regulated but not controlled by governmental laws, historically works better than a socialist system in which the government manages the economy. J.

Alpha Beta Cheeseburger

This post was going to be about fast food workers who want to be paid fifteen dollars an hour for their work. Another day soon I will try to write that post, but I wrote this one instead.

I was a fast food worker when I was in college. I did not work during the school year, but the weeks of summer were spent preparing sandwiches or frying potatoes, onion rings, and breaded meat. Many days I worked only the rush hours of lunch and dinner, but as I became more experienced I was given more hours. One summer I was the main frier for lunch and supper and the afternoon hours between them. At other times I was on “boards,” putting together sandwiches as they were ordered. Only rarely did I interact directly with the customers. If the computer that ran the cash register failed, I was put up front, because I was one of the few workers who could figure change correctly without the help of the computer. Most of the time, though, the front counter and drive-through window were staffed by the cuter girls on the staff.

I was older than most of my co-workers—even some of those who were entering management positions. One of my friends from the store graduated high school, rose in management in the company, switched companies a few times, and finally retired. Every year he earned more money than I did, even with my Bachelor’s and Master’s degrees. A lot of the fast food workers were high school students, working their first job, and ambitious to move on to better-paying work in the near future.

Most of my earnings paid for my college textbooks. I was able to set aside a little money to build a music collection. This is when music came in LPs and 45s. (If you don’t recognize those terms, ask your parents… or your grandparents. Or Google. Or Siri.) My LP collection traveled to college and back again in a box that had held frozen meat in the store before I claimed it and took it home.

Minimum wages were lower than they are today, but of course prices were lower too. (Yes, I did walk to school, and it was uphill, and some days I walked there in the snow.) Aside from management, no one was supporting a family on their fast-food earnings. Getting free food or half-price food (depending upon the manager) was a benefit. I don’t think any of us would have considered picketing for higher wages.

I learned some important lessons those summers. I learned how to stock shelves, with the new food behind the older food so the older food gets used before it spoils. I learned not to mix food from different packages, or even to risk cross-contamination by using the same utensil in different packages. I learned about the rules fast food restaurants make to ensure food quality. I learned how employees and managers sometimes get around those rules to save time or save money. I learned how to place an order at a fast food restaurant to guarantee that your sandwich is fresh.

At this point in my life, I would not care to return to that job. At the same time, I’m glad to have experienced that job in the past. High school jobs and college jobs shape our adult lives in ways we did not anticipate. And most of those ways are good. J.