Claim: In order to help small businesses thrive, government should play a minimal role in private business matters. Write a response in which you discuss the extent to which you agree or disagree with the claim. In developing and supporting your position,

In the proceeding discussion on the claim that government involvement in private business matters throttles small business growth, I will outline the extent to which I largely disagree with the claim. My rejection of the claim is centered on two key arguments. Firstly, that in order to maintain standards of employee rights now considered axiomatic government involvement is necessary. Secondly, that the nature, not the extent of the role played by the government is key. Lastly, I will juxtapose these arguments with a discussion of government regulation and taxation can indeed by onerous and damaging to small businesses.

Governments ought to play a significant role in private business matters, as much of the hardfought rights and entitlements employees enjoy are the product of political action, as opposed to free market development. The invisible hand of the economy did not instigate viable minimum wage levels-collective action did. Small businesses are just as likely to large, anonymous corporations to mistreat employees, owing to probable lack of a human resources department, ability to operate with opaque hiring practices, and strong financial incentives to circumvent the law, due to their often thin profit margins. Further, on account of their size, small businesses are particularly susceptible to becoming home to a toxic work environment, as ill-intent on the part of just a single managerial figure can spell calamity for staff. The intrusion of government on small business practices has evolved to meet these issues. National revenue services audit business to prevent fraud and evasion, food safety agencies rigourously inspect kitchens, and customer protection bureaus ensure the wider public isn’t defrauded. These are common issues, to which the government plays a significant role in eliminating. These measures are not controversial, they are broadly accepted and widely seen as necessary. Thus, given the susceptibility of small businesses to inappropriate practices, government should play a large role in private business matters.

Follwoing on from this, the nature, not the extent of the role palyed by the government is key. The aforementioned claim presupposes that the involvement of the government in daily affairs and mundane activities is the issue which throttles economic growth. However, this misrepresents the issue. It is the nature of the involvement, not the extent which can hamper small businesses. There are a wide range of examples of this. Consider the following. On the one hand, annual financial records and taxes are filed. These are seen as absolutely average business requirements, the opposition of which only exists in fringe elements. This is deeply intrusive. Every single transaction and purchase is analysed, and malintent is searched for. On the other hand, were the government to limit the colour of clothing to be sold, the food to be made, the drinks to be stocked based on inconsistent criteria this would indeed throttle growth, despite being a far less invasive regulation than filing taxes. The point illustrated here, is that provided that government policies are grounded in genuine issues that pose a danger to the society at large, their intrusion is not only justified, but does not effect growth.

Lastly, it is certainly worth underrstanding that regulation and taxation can be onerous. Small businesses are the backbone of rural and semi-urban communities and can provide a viable antedote to the decay of rural areas. Many are run by individuals, whose family and livelihood are contingent on their easy operation. The greater focus we see on employee rights and employment standards has eclipsed the harmful effect this can have on small business owners. While the idea of a ‘living’ wage is attractive, it is but one such example of how well meaning efforts can damage the economic vitality and viability of small businesses.

In the proceeding discussion the claim that anything but minimal government interference in private business matters will throttle small business growth rejected. The position taken was that governments should play a large role, as political action not free market economics developed key employee rights. Further, it was argued that the nature, not the extent of govenrment interfence was key. Lastly, the discussion was contextualised by understanding that regulation and taxation, as well as certain employee rights measures can be damaging.