The ideal goal of economic regulation is to ensure the delivery of a safe and appropriate service, while not discouraging the effective functioning and development of businesses.
For example, in most countries, regulation controls the sale and consumption of alcohol and prescription drugs, as well as the food business, provision of personal or residential care, public transport, construction, film and TV, etc.
[1] There can be internal regulation measures within a company, which work towards the mutual benefit of all members.
Often, voluntary self-regulation is imposed in order to maintain professionalism, ethics, and industry standards.
In the 18th century, the production and distribution of goods were regulated by British government ministries over the American Colonies (see mercantilism).
The APA established uniform procedures for a federal agency's promulgation of regulations and adjudication of claims.
[12] President Ronald Reagan took up the mantle of deregulation during his two terms in office (1981-1989) and expanded upon it with the introduction of Reaganomics, which sought to stimulate the economy through income and corporate tax cuts coupled with deregulation and reduced government spending.
Though favored by industry, Reagan-era economic policies concerning deregulation are regarded by many economists as having contributed to the Savings and Loan Crisis of the late 1980s and 1990s.
[13] The allure of free market capitalism remains present in American politics today, with many economists recognizing the importance of finding balance between the inherent risks associated with investment and the safeguards of regulation.
[18] Though largely considered a success and considerably reducing government deficit, critics argue that standards, wages, and employment declined due to privatization.
Others point out that lack of careful regulations on some of the privatized industries is a source of continued problems.
[19][20] The regulation of markets is to safeguard society and has been the mainstay of industrialized capitalist economic governance through the twentieth century.
Generally, these schools attest that government needs to limit its involvement in economic sectors and focus instead on protecting individual rights (life, liberty, and property).
[22][23] Some argue that companies are incentivized to behave in a socially responsible manner, therefore eliminating the need for external regulation, by their commitment to stakeholders, their interest in preserving reputability, and their goals for long term growth.