Challenges Faced by the Government

The prompt asks you to write a 5-paragraph essay describing the challenges a government must face in guaranteeing both freedom and equality in business. If you only protect freedom, the gap between those at the top and those at the bottom may be extreme. Not everyone can be Jeff Bezos, the founder and CEO of Amazon. If you only protect equality, you may be able to legislate wonderful salaries for everyone at Amazon but you must consider how long Amazon will be in business once you have demoted Jeff Bezos to the mail room.

You are welcome to write your essay in a way you choose so long as you follow the 5-paragraph format laid out in the rubric.

You are welcome to describe an existing business or economic system or to imagine your own utopia.

One way for you to consider this topic is to ponder the lives of Larry Sills and Maddie Parlier in the article by Adam Davidson entitled, “Making it in America.”

Larry did not exactly compete for the job of the CEO at Standard Motor Products. His family has run the company for 100 years. And yet, whatever you might think of the process whereby Larry became CEO, he seems to be very good at his job. He guided the company through at least 1 major recession. He has managers in place who assesses the profitability every day of every department in the company. SMP makes money and appears to be stable, but only through extremely careful management. Should the board of directors of SMP have the freedom to hire and retain Larry, even though there has never been any open competition for his seat? Should Larry have the freedom to run the company as he sees fit? Should the government have any say in the way Standard Motor Products is run?

Consider now the case of Maddie Parlier. Maddie was once an honors student in high school, but now she is a single mother, very glad to have a Level 1 position at SMP but with no time or money to get the extra training she needs if she is ever to advance to Level 2. Would you like for there to be a way for Maddie to advance over time? What about Maddie’s safety at work? Medical insurance? Larry may not believe he can help Maddie in any way without reducing the profitability of the company. Would you like to require SMP to provide training or any other good things for any of its workers? Do you believe that government should play a role in any of this or would you like to keep government out?

Notice that the SMP example is set in the right -to-work (no unions) state of South Carolina in the United States today. Other settings might work differently. But there is the constant: Children have different abilities. Parents offer different support systems. Some economic ventures flourish. Some go under. In the face of the worlds propensity to produce winners and losers, how should government guarantee freedom and equality?

Instructions

This is an individual assignment. Write a 1500-word essay in 5 paragraphs considering the challenges faced by a government which seeks to protect the rights of all its citizens within the context of a free enterprise system. Your paper can be set in the United States, in China or wherever you choose including a utopia of your own invention.

ANSWER

Economic Free Markets Vs. Enforced economic equality Markets

Introduction

Economic freedom indeed encourages creativity in business with serious winners and losers. In the economic freedom approach, an individual is free to enter and compete in the markets. Also, the market coordinates the voluntary exchanges that occur in the market. On top of that, it is a personal choice to join the free economy, and property owners and their properties are protected against physical invasion from others (Farhadi et al. 117). Private property owners have the freedom to do anything with their property, provided they do not violate any rights. On the other hand, enforced economic equality encourages everyone’s inferior lifestyle because hard work does not change much. Economic equality is a state of being equal in terms of rights, status, and opportunities. In this approach, every individual has equal access to all opportunities of acquiring wealth.

Governments are expected to mediate between markets to ensure their practices promote general economic fairness. The government employs various means to facilitate the process of reallocation of financial resources. Through approaches like taxation, the government can reallocate resources from the wealthy to those that are financially challenged. In a society that practices economic freedom, it is the duty of the government to ensure that property owners and their property are guaranteed protection. The government is responsible for ensuring the individuals and their property are protected from aggression from others. Governments are rated by the EFW depending on the level of protection they offer to private property. For this matter, most governments are dedicated to providing protection. Generally, enforced economic equality tends to promote the fact that people are entitled to an equal pay rate regardless of race or gender, for example.

Freedom

A free market dictates that the allocation of resources is not determined through any government influence but only by supply and demand. Larry was born into wealth. He became the CEO at Standard Motor Products by default after over 100 CEOs in the family. Because it was a family business, it was now Larry’s turn to fill the position. Although he did not face any competition in acquiring the position, he proves to be competent and good at his job. Mr. Larry has competent managers in place who balance the books across all departments in the company. Considering Standard Motors Products has been in the family for ages, the board of directors is not in any position to try taking the sit away from Larry. As a matter of fact, Larry is in a better position to deprive them of their jobs, although it would be a poor decision considering how well the company is being coordinated.

It is up to Larry to run the company how he dims fit because e he holds the CEO position. However, he should be flexible to listen to the opinions of other important positions in the firm. The management departments are doing a great job of running the company so far. Thus, Larry should consider what the managers propose to keep the company productive. The government is not expected to have a say in how Standard Motor Products is run. It is up to the government to ensure that business is prospering because they generate revenue from them. However, provided standard motors products do not break any laws or government policies in their operational processes. The government has no business poking its nose in the business of standard motors products. In a free-market society, the government plays a limited role because the free marketing system is self-regulating.

Equality

Maddie Parlier comes out as a determined and willing woman who lacks the necessary resources to advance. She got lucky to secure a position at SMP, but she now needs to advance. Being a single mum and a hardworking woman, she deserves to advance to the next level to be easy on her to take care of her family. From the enforced economic equality economy approach, every individual is supposed to have equal access to wealth and all the opportunities of attaining wealth. Providing training should be a responsibility of the company to encourage improvement in production and sales because of the efficiency that comes with it. However, apart from the company coming in, the government is also supposed to provide means that individuals, like Maddie, can access the required training then pay back later. The government is supposed to ensure that none of its citizens is suffocated in any way and that they are all exposed to equal opportunities. The government can organize with the company to provide loans strictly meant for training the staff instead of recruiting new employees every time. At this point, Mr. Larry, the CEO, can use his positional powers to engage the government into a program aimed at providing training to its employees.

The Role of the Government

Economic freedom requires less or minimum control from the government regarding the means of earning a living or spending one’s property. All this works provided the process does not violate any individual rights. Maximum economic freedom dictates that there is less restriction in wages, working hours, prices, and terms of transactions, among other aspects. The government’s responsibility in all this should be to provide an enforcement mechanism that is important for defining contracts. Apart from ensuring economic fairness, sometimes the government intercedes the market to facilitate other important goals like national unity and advancement.

Governments are tasked to strike an acceptable balance between freedom and enforced economic equality economies. Governments are expected to mediate between markets to ensure practices promote general economic fairness. The government has three basic purposes: protecting property and property owners, providing public goods, and promoting equality (Stankov et al. 52). It is upon the government to ensure that businesses are successful because they play a role in generating government revenue. On the same note, the government should also ensure that its citizens enjoy their earnings from their jobs. For instance, Larry, the CEO at Standard Motor Products, may not be qualified for that position, but his management team ensured that it prospered. For this matter, the government did not have any business interfering. On the other hand, the government can involve itself in trying to save a failing company. The government can help organizations by sponsoring some of their ventures that enhance production. For example, individuals like Maddie who cannot afford to advance their training can benefit from the government’s strategies to facilitate training. The government has access to several resources which it can employ to help employers to acquire training.

Conclusion 

In a purely free market, no government intervention is required in the transaction process between buyers and sellers. History has it that free markets seem to be more successful than enforced economic equality market systems. For instance, in 1979, there was a deregulation of airlines that allowed consumers to choose from the other airlines that were even cheaper. Lesser government interventions encourage quality products and services, offer customer protection, and give freedom of pricing. Regardless of the positivity associated with free markets, these markets are still subjected to misinformation, manipulation, promote wealth inequality, and asymmetries of power & knowledge. Economic freedom promotes creativity in business. On the other hand, enforced economic equality tends to promote laziness and an inferior lifestyle for everyone. Economic freedom indeed encourages creativity in business with serious winners and losers (Meierrieks et al. 980). In the economic freedom approach, an individual is free to enter and compete in the markets.

Governments are expected to mediate between markets to ensure their practices promote general economic fairness. The government employs various means to facilitate the process of reallocation of financial resources like taxation. A government that advocates for economic equality is unrealistic. It should not try to implement predetermined distribution of wealth. Morally, individual preferences, efforts and advantages matter and should count. Instead of advocating for economic equality, the government should address the issue of poverty separately and provide more opportunities.

Works Cited

Farhadi, Minoo, Md Rabiul Islam, and Solmaz Moslehi. “Economic freedom and productivity growth in resource-rich economies.” World Development 72 (2015): 109-126. https://ideas.repec.org/a/eee/wdevel/v72y2015icp109-126.html

Meierrieks, Daniel, and Laura Renner. “Stymied ambition: does a lack of economic freedom lead to migration?.” Journal of Population Economics 30.3 (2017): 977-1005. https://www.researchgate.net/publication/324578821_Long-Term_Relatedness_between_Countries_and_International_Migrant_Selection

Stankov, Petar. Economic Freedom and Welfare Before and After the Crisis. Springer, 2017.

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