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There are two main reasons why someone might say that it is bad for government to intervene in business. One argument is pragmatic while the other is more of a moral argument.
Morally speaking, there are those who would say that government intervention into business is an infringement on people’s economic liberty. Some people believe that we, as human beings, should have an inherent right to do as we wish with our own persons and our own property. Government intervention deprives us of these rights to some degree. If the government tells me that I must pay my workers at least a given amount of money, it is telling them that they are not free to work for less if they wish and it is telling me that I am not free to make whatever deals I want with employees. In both cases, the government is limiting the amount of freedom that its people enjoy.
The more common argument, however, is that government intervention hurts the economy. Government intervention makes it harder for businesses to start and to prosper and, thereby, reduces the number of jobs that can be created. When the government creates a lot of regulations that must be complied with, it raises the cost of doing business. If I want to start a small business in my town but I have to get five different permits to do so, I will be less likely to start a business. If I have to keep detailed records to prove that I am complying with regulations, it forces me to devote time to keeping those records rather than to doing things that would actually help my business run better. Some regulations raise the cost of doing business even further. If the government requires me to buy all sorts of safety equipment to protect my workers from things that may or may not actually happen, it reduces my ability to make money. When the government does all of these things, it makes it harder for businesses in general to get started and to grow. If businesses have a harder time starting and growing, a country’s economic progress is slowed.
These are the two main arguments that you will hear for why it is bad for government to intervene in business.
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