There's an ever-present struggle between those who believe in less regulation and those who believe in more. Typically this falls along conservative vs liberal boundaries. The general premise is that deregulation jives with the notion of smaller government and free markets, while regulation protects the vulnerable.
Both approaches have merit, and both can go too far. Instead of focusing on ideologies, it's better to think concretely about who is helped and hurt as policies change.
A completely deregulated society provides the capable with the most opportunity. Assuming we keep basic functions like police in place and let just the pure economy play out, we should naturally see an unstable system where the richest get richer and the poorest get poorer. There will be relatively more rags-to-riches stories, but also many people who are destitute with only the goodwill of others keeping them from sinking. We had essentially this system in the 1800s and it gave rise to some of the most powerful business magnates in history: Rockefeller, Morgan, Carnegie. It also exploited the poor to an amazing degree. And that's just modern times. We see even more extreme examples in the colonial and feudal days.
A very highly regulated society prescribes extra rules to prevent the poor, desperate, or less capable from being taken advantage of to the same degree. This leads to more egalitarian societies. An ideal version of communism would work like this (though real-world examples were hardly the ideal versions). Incentive to innovate is reduced or almost entirely eliminated.
The balance tends to be defined by the values of society. Since societies are rarely homogenous, we see this balance swing back and forth.
A deregulated world works on the assumption that an individual is wise and can be informed of and navigate all their options. The Trump administration wants to eliminate several regulations in the financial sector, notably the fiduciary responsibilities of financial advisers. In the past, they were allowed to recommend products to clients that were in the adviser's best interest (their fund, higher commissions, etc) and did not need to act in their client's interests. The free market argument is that clients will simply go elsewhere and it'll work itself out, but that's only if those same clients have an easy way to compare the service they'd get elsewhere. In this case, that's convoluted and difficult (need to understand rates of returns, fees, etc). Removing this regulation expressly says "we want to let advisers fool their clients, at least a little". How is that a good thing for society? I think this is a case where our societal values should clearly dictate that this is not ok.
Both approaches have merit, and both can go too far. Instead of focusing on ideologies, it's better to think concretely about who is helped and hurt as policies change.
A completely deregulated society provides the capable with the most opportunity. Assuming we keep basic functions like police in place and let just the pure economy play out, we should naturally see an unstable system where the richest get richer and the poorest get poorer. There will be relatively more rags-to-riches stories, but also many people who are destitute with only the goodwill of others keeping them from sinking. We had essentially this system in the 1800s and it gave rise to some of the most powerful business magnates in history: Rockefeller, Morgan, Carnegie. It also exploited the poor to an amazing degree. And that's just modern times. We see even more extreme examples in the colonial and feudal days.
A very highly regulated society prescribes extra rules to prevent the poor, desperate, or less capable from being taken advantage of to the same degree. This leads to more egalitarian societies. An ideal version of communism would work like this (though real-world examples were hardly the ideal versions). Incentive to innovate is reduced or almost entirely eliminated.
The balance tends to be defined by the values of society. Since societies are rarely homogenous, we see this balance swing back and forth.
A deregulated world works on the assumption that an individual is wise and can be informed of and navigate all their options. The Trump administration wants to eliminate several regulations in the financial sector, notably the fiduciary responsibilities of financial advisers. In the past, they were allowed to recommend products to clients that were in the adviser's best interest (their fund, higher commissions, etc) and did not need to act in their client's interests. The free market argument is that clients will simply go elsewhere and it'll work itself out, but that's only if those same clients have an easy way to compare the service they'd get elsewhere. In this case, that's convoluted and difficult (need to understand rates of returns, fees, etc). Removing this regulation expressly says "we want to let advisers fool their clients, at least a little". How is that a good thing for society? I think this is a case where our societal values should clearly dictate that this is not ok.
