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The Importance Of Government Regulation in Capitalism.

Updated on March 15, 2015

A simple example of how government regulation can have a positive effect on the economy.

I live in the best state in the US, the Garden State,New Jersey. In our state it is against the law for a customer to pump his own gasoline at a gas station.A gas station attendant or employee must do that.And this provides us with a simple,modest, yet irrefutable proof that government regulation can have a positive effect in the economy and in the day to day life of citizens.The price of gas in New Jersey is always in the twelve to fifteen states with lowest gasoline prices, and if we were to believe the orthodox and dogmatic doctrines of the Milton Friedman ,tea party,right wing nut talking heads crowd the price of gas in New Jersey should be the highest in the nation.I will explain to you how this is possible .Because this is a state law all participants who want to do business in that particular field must play by the same rules,and the cost and profit margins have to take into account the cost of labor in their business.They could theoretically decide since the cost is higher in this state that they'd rather leave the state and establish themselves in a state where this regulation doesn't exist and therefore they would have a higher profit margin .Why don't they do that?That is where the beauty of the free market comes into play.Because there would always be other operatives that would be willing to fill that void.They would be willing to operate at a lower profit margin because the volume of the sales would make the business still profitable, and due to the competition between the different companies none would want to leave to their competitors a whole territorial section of the market.

The notion that any and all government regulation leads to communism is directed at simpletons.

The capitalist, free market economy finds a way to survive and thrive and adapts to achieve positive economic results , that is why for example you see that almost in every gas station you stop in New Jersey you see what is almost a small mini market, with coffee shop, quick food to go, a clean inside bathroom, and several attendants to man the store which even exceeds the original requirement by the supposedly business hindering law.So as you can see, a government regulation if it is the product of common sense, implemented with the democratic support of a majority of the population can be beneficial even to the would be opposers to the said regulation.

Government is not the enemy, we are the government.

It has gotten really annoying to hear this new breed of pseudo conservatives ranting endlessly about how evil government is, how much better off we would all be if government got out from every activity except the military , and how much the economy would grow if businesses, corporations and individuals would be allowed to operate in a totally unregulated environment ,then every sector of the economy would seek it's own benefit regardless if it would affect any or every other sector negatively, and that wouldn't be capitalism or a free market system ,it would simply be total chaos and anarchy.

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    • mio cid profile imageAUTHOR

      mio cid 

      4 years ago from Uruguay

      thank you for your comment friend, we have an obligation to pass on the word of logic and reason

    • d.william profile image

      d.william 

      4 years ago from Somewhere in the south

      Great article. Nothing here to dispute. It looks like you have it all together. Hopefully we can win over some sympathizers to the side of logic.

      The only people who insist that regulations are a bane to economic improvement are either the wealthy who want the whole pie instead of a piece, or their mindless followers who believe anything the radical end of their party might tell them whether it be based in truth or not. Better regulations are needed to make sure they don't go too far, like any spoiled child will do if not reigned in by their parents.

    • mio cid profile imageAUTHOR

      mio cid 

      4 years ago from Uruguay

      thank you for reading and commenting

    • mio cid profile imageAUTHOR

      mio cid 

      6 years ago from Uruguay

      the government has a responsibility to look out for the well being of the whole society and not just a sector of it.

    • wetbaknproud profile image

      wetbaknproud 

      6 years ago from new jersey

      I think most people want capitalism to persevere and thrive , but that doesn't mean we must transfer capital from the poor and the middle class to corporations and the rich.

    • mio cid profile imageAUTHOR

      mio cid 

      6 years ago from Uruguay

      well,many more million people here and greater gas consumption, but don't let them bamboozle you into thinking that if you repeal that law your gas will be cheaper because it won't.

    • mio cid profile imageAUTHOR

      mio cid 

      6 years ago from Uruguay

      balance and moderation the extreme right wing loons hate that with a passion only surpassed in their mind by their hate for education.

    • Photoshark317 profile image

      Leroy Brown 

      6 years ago from Lafayette Orgon

      We have the same law about pumping gas in Oregon. And we typically have some of the highest prices in then nation? But I agree with your premise

    • Johnkadu123 profile image

      Johnkadu123 

      6 years ago from Toronto, Canada

      You are about to be attacked by so called fiscal conservatives. The reality is that a state with no government regulation looks like Somalia. It is all about finding the right balance and sticking to it.

    • mio cid profile imageAUTHOR

      mio cid 

      6 years ago from Uruguay

      everybody benefits when there are more people employed,and everybody benefits when people have money to spend, seems so easy to understand , yet so many people don't see it that way.

    • mio cid profile imageAUTHOR

      mio cid 

      6 years ago from Uruguay

      @LikaMarie,and don't forget this is just a simple small example of which there are bigger and more important ones on larger issues.

    • mio cid profile imageAUTHOR

      mio cid 

      6 years ago from Uruguay

      what kind of a question is that? you know i read all your hubs, i even commented on that one remember?Not only will they be voting en mass, they vote in higher percentage than us normal people ,that's why elections are always close, the republicans favor the rich the dems favor the middle class the working class and the poor so in order to win elections the republicans have to convince enough simpletons to vote against their own best interests.

    • ImKarn23 profile image

      Karen Silverman 

      6 years ago

      With all due respect - while you facts, figures, and examples are excellent - and i agree with you 100% - your very own words almost negates the absolute common sense of this hub!

      "The notion that any and all government regulation leads to communism is directed at simpletons."

      Here's my point: Are you aware that 'Here Comes Honey Boo Boo' beat out both the RNC AND the DNC in cable tv ratings??

      the simpletons will be a-votin...en mass..lol

      nuff said..

      sigh..

    • profile image

      LikaMarie 

      6 years ago

      I think too many conservatives want capitalism to persevere to the point that greed takes over. This is what happens when these gas stations go elsewhere, and get more money.

      In Oregon, where my sister lives, they too have the law that the gas station attendants must pump your gas. It's a way to employ more people, and more employment is always good.

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