Thursday, May 6, 2010

We aren't what we say we are

America is usually considered the most capitalist nation in the world. While we clearly aren't totally capitalist, we have a system that allows businesses to compete quite a bit. But it is hard to maintain capitalism when you want to break up big businesses and maintain competition. By breaking up the corporations, the government removes their incentive for competing, and it's interfering in the market.


At the moment, the Senate is trying to pass some sort of financial regulations that would prevent businesses from becoming too big. I can totally agree that monopolies and oligopolies can be bad; they have the power to raise prices. If they're the only company selling pencils, no one else is around to compete, so there's no way to keep the prices low.




But doesn't capitalism and competition kind of lend itself to having big businesses. As they expand and take over other companies, they get big. It's why they compete in the first place. That's why it's hard to decide how far to go when trying to regulate business. On the one hand, you want to have the free market system many people dream about, but you don't want huge companies to become oppressive.

So how much should the government regulate?

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