Small businesses need many conditions in place in order to thrive: startup capital, a suitable location
and physical infrastructure, shrewd founders who can adapt to changing circumstances — and also, of
course, customers. While, in general, a government’s hands-off policy towards small business can help
small businesses by freeing owners from time-consuming and cumbersome regulations, it is also the case
that some government regulations are needed to protect the public from unscrupulous business owners.
This type of regulation not only helps the public, but helps small businesses thrive by increasing consumer
confidence in small businesses, as well as protecting ethical small businesses from unfair competition
from businesses that break the rules.
The United States has one of the highest rates of entrepreneurship in the developed world — much
higher than the rates in Western Europe. Why? In the U. S. , virtually anyone can start a business. For about
$35, one can obtain a business license, and then you’re officially in businesses. Hiring the first employee
or two is also relatively simple, and some workers can be paid as contractors, which eliminates the need to
administer payroll taxes. In contrast, in Western European nations where you need employment papers
(and sometimes references) to even open a simple checking account, naturally, the regulations and
paperwork needed to start an enterprise can be daunting. Furthermore, laws intended to protect workers
mean that it is virtually impossible to fire anyone, which can be a real burden for a small business that
simply cannot survive with employees who are not up to the task. The lack of regulation in the U. S. is a
strong contributor to the burgeoning of small business in that country.
On the other hand, a pure laissez-faire policy would be disastrous for small business, as well as for
society. Should we allow small businesses to sell “health cures” that actually make people sick, or car
seats for babies that haven’t been through safety testing? Of course not — even if requiring safety testing
puts a burden on small business. The safety of the public is important, to be sure, but public confidence is
also important if small businesses are to have any customers. Furthermore, some small business owners
(just like large business owners) practice racial discrimination, sexual harassment, and other abuses of
workers, such as paying undocumented workers less than minimum wage. It is important for human rights
to curtail these abuses; it also helps small businesses for the government to put a check on such practices,
because then legitimate, ethically-run businesses can compete on a fair playing field.
While this essay propounds a system of minimal to moderate regulation of small businesses, some
might argue that government has no right to intrude on the private dealings of businesses and their
customers. According to this view, if someone wants to offer unlicensed cosmetic injections, and budgetminded
consumers are willing to have their wrinkles filled with who-knows-what, then it is the right of
both parties to transact as they wish. However, in developed nations, governments take on, at very least, the
provision of services that individuals cannot provide for themselves — military defense, the creation of
highways and other infrastructure, and the testing of food and medicine on a wide scale, among others.
Individuals do not have the ability to test every can of baby food for botulism or to evaluate the credentials
of a “doctor. ” Thus, in industries in which human health and safety are at issue, some regulation is justified.
How should governments best help small businesses thrive? In some sense, the answer is that
governments should back off and let people do as they will. In a free market, many small businesses will be
launched, many will fail, and the best will survive. However, some government intervention is required to
protect the public from dangerous products and harmful business practices. These regulations ultimately
help small business as a whole by encouraging consumer confidence in these businesses.
Small
businesses
need
many
conditions in place in order to thrive: startup capital, a suitable location
and physical infrastructure, shrewd founders who can adapt to changing circumstances — and
also
, of
course, customers. While,
in general
, a
government’s
hands-off policy towards
small
business
can
help
small
businesses
by freeing owners from time-consuming and cumbersome
regulations
, it is
also
the case
that
some
government
regulations
are needed
to protect the
public
from unscrupulous
business
owners.
This type of
regulation
not
only
helps
the
public
,
but
helps
small
businesses
thrive by increasing consumer
confidence in
small
businesses
,
as well
as protecting ethical
small
businesses
from unfair competition
from
businesses
that break the
rules
.
The United States has one of the highest rates of entrepreneurship in the developed world — much
higher than the rates in Western Europe. Why? In the U. S.
,
virtually
anyone can
start
a
business
. For about
$35, one can obtain a
business
license, and then you’re
officially
in
businesses
. Hiring the
first
employee
or two is
also
relatively
simple, and
some
workers can
be paid
as contractors, which eliminates the need to
administer payroll taxes.
In contrast
, in Western European nations where you need employment papers
(and
sometimes
references) to even open a simple checking account,
naturally
, the
regulations
and
paperwork needed to
start
an enterprise can be daunting.
Furthermore
, laws intended to protect workers
mean that it is
virtually
impossible to fire anyone, which can be a real burden for a
small
business
that
simply
cannot survive with employees who are not up to the task. The lack of
regulation
in the U. S. is a
strong contributor to the burgeoning of
small
business
in that country.
On the other hand
, a pure laissez-faire policy would be disastrous for
small
business
,
as well
as for
society. Should we
allow
small
businesses
to sell “health cures” that actually
make
people
sick, or car
seats for babies that haven’t been through
safety
testing?
Of course
not — even if requiring
safety
testing
puts a burden on
small
business
. The
safety
of the
public
is
important
, to be sure,
but
public
confidence is
also
important
if
small
businesses
are to have any customers.
Furthermore
,
some
small
business
owners
(
just
like large
business
owners) practice racial discrimination, sexual harassment, and other abuses of
workers, such as paying undocumented workers less than minimum wage. It is
important
for human rights
to curtail these abuses; it
also
helps
small
businesses
for the
government
to put a
check
on such practices,
because
then legitimate,
ethically
-run
businesses
can compete on a
fair
playing field.
While this essay propounds a system of minimal to moderate
regulation
of
small
businesses
,
some
might argue that
government
has no right to intrude on the private dealings of
businesses
and their
customers. According to this view, if someone wants to offer unlicensed cosmetic injections, and
budgetminded
consumers are willing to have their wrinkles filled with who-knows-what, then it is the right of
both parties to transact as they wish.
However
, in developed nations,
governments
take on, at
very
least, the
provision of services that individuals cannot provide for themselves — military defense, the creation of
highways and other infrastructure, and the testing of food and medicine on a wide scale, among others.
Individuals do not have the ability to
test
every can of baby food for botulism or to evaluate the credentials
of a “doctor. ”
Thus
, in industries in which human health and
safety
are at issue,
some
regulation
is justified
.
How should
governments
best
help
small
businesses
thrive? In
some
sense, the answer is that
governments
should back off and
let
people
do as they will. In a free market,
many
small
businesses
will
be
launched
,
many
will fail, and the best will survive.
However
,
some
government
intervention
is required
to
protect the
public
from
dangerous
products and harmful
business
practices. These
regulations
ultimately
help
small
business
as a whole by encouraging consumer confidence in these
businesses
.