Post on 23-Dec-2015
Why do we have corporate daycare?
Who should raise our children?
BusinessGovernmentFamilies
…one can best analyze modern society by thinking of it as an uneasy amalgam of three distinct realms: the social structure (principally the techno-economic order), the polity, and the culture.
Daniel Bell
Government
BusinessCulture
Government
BusinessCulture
Social Contract
Social Contract: Underlying agreement between business and society [the institutions of society] on the basic duties and responsibilities business [each of the institutions] must carry out… reflected in laws and regulations [and tacit understandings] p.9.
Government
BusinessCulture
1776 1876 1930 1976
Economy Agriculture
Local Markets
Transportation
Commun-ications
Industrial
National Markets
Robber Barons
Depression Post-Industrial
Global Markets
Corporations
Govern-ment
State Power
Laissez faire
Federal Power
Antitrust
ICC FTC
New Deal:
ICC, NLRB, FDIC,SEC
Social Regulation:
EPA, EEOC, CPSC, OSHA…
Culture Rural
Agrarian
WASP
Slavery
Immigration
Urbanization
Segregation
Changing Workforce
Mobility Feminism
Civil Rights
Diversity
Government
BusinessCulture
[We] have embraced a half-truth as the basis of our dominant social philosophy and public policy.
The half that is true is that at the root of our deteriorating state lies excessive governmental intervention in private lives.
The half that is amiss is the assumption that merely slashing the government will restore America’s economic, social, political, and ethical vigor.
Amitai Etzioni
Merely cutting back government will not set America on a course of
recovery unless these efforts are coupled with a period of
reconstruction of community—of family, schools, neighborhoods,
and nation– and above all individual renewal.
Amitai Etzioni
Historical Waves of Government Regulation of Business
C9-S2Figure 9-1
WW
I
Civ
il W
ar
Vo
lum
e an
d In
ten
sity
of
Go
vern
men
t R
egu
lati
on
s
WW
II
Ko
rean
War
Wave 2
Wave 1
Wave 3
Wave 4
1790 1837 1861- 1917- 1933 1942- 1950 1960 1980 19901865 1919 1945 1953
Historical Patterns of Federal Regulation of Business
First wave – Few regulations (Laissez Faire) some promotional for business.
Second wave – The era of regulation was dominated by public demands for government to regulate big business, and the Supreme Court gave the federal government new power to act. Antitrust Regulation
Third wave – The burst of activity in this wave was the result of many New Deal laws designed to deal with the ravages of the Great Depression of the 1930s.
Fourth wave – Intent to improve the quality of life resulted in new controls that deeply involved government. Social Regulation
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.10-12
Government regulation of the private sector is justified under two circumstances: Economic: When flaws appear in the
marketplace that product undesirable consequences.
Social: When adequate social, political, and other reasons for government regulations exist.
10-4
Reasons For Regulation1. Economic -- Focus is market
efficiency and control Market Failure (Assumptions not
met). Natural Monopoly
Where because of natural conditions, a single firm can supply the entire market more efficiently than several competing firms.
Weigh economic benefits versus economic costs
Reasons For Regulation
2. Achieve Social/Political Goals Non economic values in the public
interest Socially desirable goods and services Protecting individual rights and privacy Resolution of national and global problems Regulation to benefit special groups Conservation of resources
Social value versus economic cost
Benefits of Government Regulation
Regulation has helped to: Improve the position of minorities Clean the environment Prevent monopoly Reinforce free competition Prevent corruption Strengthen the banking system Reduce industrial accidents Provide resources for the elderly Control communicable diseases
These benefits are enormous and incalculable
10-16
Costs of Regulation
1. Administrative Costs: $37.8 billion in 2007Costs of regulating (agencies, enforcement,...)Paid by Taxpayers
2. Compliance Costs: $1.1 trillion 11% of GDPCosts to companies to meet regulationsPaid by customers/shareholders
3. Indirect Costs: total costs unknownNon monetary costs (employment,
productivity, innovation,…)Paid by society in general
Administrative Costs of Regulation
10-15
Administrative Costs of Regulation
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.10-19