“Getting the Balance Right”

Thoughts on a free market economy….

“Getting the Right Balance”

By Phyllis Hunsinger

October 1, 2015

“There is so much at stake in getting the balance right between government regulation and marketplace freedom—and yet our educational system increasingly fails to teach our young people the fundamental workings of the free enterprise system, the system of checks and balances that restrains government from abusing its power, and the crucial role of competition and capital formation to keep our economy healthy.”  These are the words of John S. Hendricks, the founder and Chairman of the Board of Directors of Discovery Communications, the world’s number one nonfiction media company.

Often students are not taught about the relationship among capitalism, free enterprise, and government regulations. Capitalism is defined as an economic environment made up of owners and workers.  An essential feature of capitalism is private ownership.  The owner has full control of the means of production and profits that are due to him.  A free market enterprise system is one that is driven by supply and demand.  Ideally in a free market, entities are exchanged voluntarily after both the buyer and seller agree on the terms of exchange.  Regarding the economic system, government has the responsibility to protect individual property rights, protect the life and safety of its citizens, and to regulate commerce across state lines.

A large and powerful central government abuses its power to regulate when it stifles competition, when it picks winners and losers in the economy by using tax payer funds to prop up individual industries, and when it fails to protect the individual property rights, both physical and intellectual properties, of its citizens.  The U.S. Constitution identifies a system of checks and balances to keep the federal government in check.  Young people who fail to acquire this knowledge in the various educational institutions will be unable to understand the importance of getting the right balance between free markets and government regulation.

As Winston Churchill once famously said, “Some people regard private enterprise as a predatory tiger to be shot.  Others look on it as a cow they can milk.  Not enough people see it as a healthy horse, pulling a sturdy wagon.”

 

 

 

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