The Role of Government in Business

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History

Ever since the colonial times businesses in the United States of America faced business regulations. During the 19th century, when the American economy became more industrialized, and grew to a world power, the federal government passed business laws, that favored social reforms over the interests of big business. In the 20th century government involvement in business continued to expand. So made Roosevelt’s “New Deal” legislation effectively the federal government the countries largest regulator of business and the economy, after the great depression in the 1930’s (U.S. Department of State publication, 2008). Later during this century, the regulation by federal or state, were widely replaced by newly for this purpose formed administrative orders of commissions, the so-called Federal Trade Commission. It was given broad regulative powers over corporate practices. In the 1970’s business and the public were screaming for fewer regulations. This desire and the political pressure because of the federal budget deficit stopped continuous expenditure of the government’s business regulations in the mid 1970’s. In succession several regulation agencies had been abolished, and a deregulation of the airline, telecommunication, television and radio broadcasting, trucking and railroad industries commenced (Peritz, 1996).

The 1980’s and 1990 saw further deregulations in favor of business, nevertheless it also lead to notable failures. A prime example is a series of corporate bankruptcies in the early 21st century, which involved fraudulent bookkeeping. The federal government exercised regulatory authority to promote greater scrutiny (Lai, Loi, Lei, ed, 2001).

Despite the obvious antagonism between business and government regulatio...

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Peritz, Rudolph J. R. Competition Policy in America, 1888–1992: History, Rhetoric, Law. New York: Oxford University Press, 1996.

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