Why do we have corporate daycare?

Who should raise our children?



Business



Government



Families

…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 Culture Business

Government Social Contract Culture Business

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 Culture Business

Economy Govern ment Culture 1776 Agriculture Local Markets Transportation Commun ications State Power Laissez faire Rural Agrarian WASP Slavery 1876 Industrial National Markets Robber Barons 1930 1976 Depression Post-Industrial Global Markets Corporations Federal Power Antitrust ICC FTC Immigration Urbanization Segregation New Deal: ICC, NLRB, FDIC,SEC Social Regulation: EPA, EEOC, CPSC, OSHA… Changing Workforce Mobility Feminism Civil Rights Diversity

Government

Culture

Business

[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

Figure 9-1

Historical Waves of Government Regulation of Business

C9-S2

Wave 4 Wave 3 Wave 2 Wave 1 1790 1837 1861 1865 1917 1919 1933 1942 1945 1950 1960 1980 1990 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

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© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

 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 Regulation 1.

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 2007  Costs of regulating (agencies, enforcement,...)  Paid by Taxpayers  2. Compliance Costs: $ 1.1 trillion 11% of GDP  Costs to companies to meet regulations  Paid by customers/shareholders  3. Indirect Costs: total costs unknown  Non monetary costs (employment, productivity, innovation,…)  Paid by society in general

Administrative Costs of Regulation

10-15

Administrative Costs of Regulation

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© 2006 The McGraw-Hill Companies, Inc. All rights reserved.