Pros and Cons of Government Intervention

Topics: Law, Consumer protection, Consumer Pages: 3 (896 words) Published: March 18, 2010

This specific report addresses the pros and cons of how much government intervention in the marketplace is necessary and appropriate. This report will cover four authors, Cunningham, Green, Friedman and Pertschuk. The authors have written extensively on consumerism and the protection thereof. This author’s goal is to break down some of the theories, which authors seem akin in their beliefs and which authors’ views are bipolar opposites. Green states there be only should be two types of government regulations 1) economic regulations and 2) health and safety regulations. He states the only important pieces of consumer legislation to emerge from Congress in the past three years were the “Consumer Protection Safety Commission (p.48). Green claims their should be a Consumer Protection agency as opposed to an advocacy. This author is definitely for government intervention in consumer protection. One of the reasons he gives is because the market place is weak, inadequate and needing protection (p.48-490). First, safety regulations that explicitly assume that the market will not adequate protect consumers against certain product hazards. It is better to prevent consumer harm than to compensate for it later (FDA,OSHA,Airline Safety, Auto Crashworthiness). Second, regulation of non-market externalities would cover damage to third parties for neither bought nor sold the product inflicting the damage. Third, enabling regulation establishes the necessary preconditions for competitive enterprise to succeed. Antitrust law establishes the borders and rules for economic contest. On the opposite end of the spectrum is Professor Milton Friedman argues that the free market is better. In the case of Freidman he voices that people are able to make their own decision. He attacks everything from the Food and Drug Administration to Ralph Nader. According to Friedman, (p.472) Advertising does not function in an adversary. It presents the pros...

Bibliography: Green, M.J. (1974). Appropriateness and Responsiveness: Can the Government Protect
the Consumer? Journal of Economic Issues, 9, 309-328
Friedman, M (1980). Who Protects the Consumer? In M. Friedman, Free to Choose: A
Personal Statement (pp.189-227). New York: Harcourt Brace Jovanovich
Pertschuk M. Lessons in Consumer Relations: Learned and Unlearned. In M. Pertschuk,
Revolt in Resolution (pp. 137 – 151)
Cunningham, W. H. & Cunningham. I.C.M. (1976). Consumer Protection: More
Information or More Regulation? Journal of Marketing, 40, 63-68
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