The impact of government regulations on businesses: do they help or hinder?

29 Jun, 2016

There has always been a tension between governments and businesses when it comes to the imposition of regulation. Anything that business owners feel disadvantaged by is met with strict opposition, whilst acts that benefit them merit nothing more than an inclined head and a nod of assent.

The real impact of government regulations on businesses is a thorny issue to decipher. Yes, they can be restrictive, but they are a protection for the ordinary man and this is their primary intent. Although often claimed to be a barrier between businesses and profits, as well as an unwelcome claimant of both time and attention from those who run them, their purpose is benevolent.

This doesn’t stop them from being denounced, side-stepped and violated by corporations big and small, but are they really the obstacles that they’re made out to be? Here, we try to uncover the truth behind them and whether there is any justification for attempts at avoidance.

Anti-business laws and regulations?

A common trend throughout the western world since the dawn of the 20th century has been increasingly restrictive regulatory laws and often erroneous claims of growing corporate tax rates. Although these measures have been intended to protect the ordinary man, they have inarguably impinged on the freedom of professionals to carry out their business as they choose and this has caused some real friction between corporate institutions and western governments.

Not all have abided by these rules. Misstated earnings, legal violations and acts detrimental to the environment have become increasingly common even as legislation has increased. As bodies have sought to limit the impact of pollutants and other harmful substances on our world, companies have ignored them, claiming that they are costly and limit profits. As governments have sought to abolish price fixing, monopolies and fraudulent or misleading advertising, businesses have rebelled. But is there any real harm in what’s happening?

The truth of the matter

These regulations have limited the freedom of businesses, it’s true, but they are nothing to be feared. Indeed, enterprises have thrived underneath their rod since the financial crisis, with many of these loathed regulations actually controlling the very same government bailout and stimulus programmes that have helped so many.

The truth is that healthy and profitable businesses lead to a healthy and profitable economy and this is all that governments are truly seeking. The protection of the common man is a primary aim, yet it is not imposed at the cost of companies, but in a way that is beneficial to both. Where taxes are raised in one area, they are lessened or removed in others, with the goal of creating a legal system that benefits both corporation and consumer. If you cannot thrive under such a system, is it truly the system that is at fault?