Why the Enhanced Business Laws would raise Market Security

Why the Enhanced Business Laws would raise Market Security by Joshua Konov


In times of the relatively “easy” business of the past, the pro-supply economies were boosted by loosen business laws and regulations, which prompted quick start-ups and flexible setups. The manufacturing mills were becoming smaller and more productive, the profit margins were good, the employment was high; and then the Capitalism was ruling the world: America was growing in a steady 20-25% every 10 years; there were the 60s and the 70s, up for Centuries before. Freedom of business and personal freedom were the most valuable commodities that boosted optimism into a system of trickle down economics, by which wealth was trickling up to come down in the properties of progress and economic growth. The large corporations were taking over the world by bringing unknown goods and services around the world: American inventions and values were carried-on by them. In such an environment, business laws and regulations were considered rightfully as stoppers of progress, and such conclusions were correct.


However, the world has been changing; the large corporations transformed into transnational conglomerates using the opening of many markets and the fall of the Communist Block, the China’s entering WTO, the “limitless” possibilities for outsourcing and moving production elsewhere to become more powerful than many governments. The employment has been becoming scarcer than ever, while the transnationals could not anymore expand with the required speed in the US, and could not employ near enough in the rest of the world. The productivity has been skyrocketing with the improving high-technologies in manufacturing, the Internet and the most important with the open global marketplace. Transnationals were well adapted to the shady business allowance of this new globalizing world, they had access to cheap capital through public financing, hefty tax-breaks, corrupted governments in the developing countries, widespread poverty, cheap labor while some countries were running so high unemployment that a labor market did not exist, in a way. When denationalization came, after the fall of the Communism, properties in energy, banking, industrial production, real estate, and e.g. were appropriated for a penny on the dollar….!

One thing, however, did not happen: the consumption almost elsewhere in the underdeveloped world could not near keep enough with the industrial capacity succeeded in the process, even worse, the middle class in the US and Europe could not keep either; high deficits were followed by national debt, because fiscal reserves could not support rising cost to maintain infrastructure, retirement, education, e.g. of an industrial production gradual declining, whereas industrial production was in the foundations of the Capitalism’s economics: economic growth, employment, middle class, infrastructure, social expenses, education, and e.g. all relied on the industrial production to replenish the diminishing fiscal reserves, and it could not happen, then how the trckle down Capitalism overall has become ineffective, indeed.


The cyclical self-adjusting Capitalism in the last 2007-09 Great Recession and the rebound that followed up could not perform without governmental interventions: quantitative easing, stimulus packages, tax breaks, e.g. thus, the governments were taking over the market forces.


In this new environment the role of the small and medium businesses and investors has risen as a main market agent (market equals economic) for wealth distribution and redistribution, because the only alternative of it was a governmental take over and market socialization, which historically has shown inept.


Hence, the market competition should be enhanced to accommodate these new realities and thus become fairer for the small and medium businesses and investors, where as the shady business with lack of business laws and regulations on its first side seems to make their business easier, on a second side such practices bring insecurity to the marketplace followed by high lending rates. Weak contracts and long term collection makes small and medium businesses and investors more disadvantaged than benefited from. Limited liability corporate laws have similar than the weak contract laws effect over them, whereas such laws are in the best usage of the transnationals, who hire multiple lawyers to defend themselves in long costly court procedures, and in many cases limited liability has been waved by judges against small and medium businesses and investors anyway.


An more secure market as mentioned above would allow low interest lending, and such is paramount to make market competition fairer.

2012, Joshua Konoiv


About Joshua Ioji Konov
email joshua.konov@gmail.com twitter joshuak2077

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