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What is Governments Role in Business?

The roles of active government in markets play a large role in policy debate and issues
concerning the markets. Entrusting a nation to the market and about the social, political,
and economic lives of its citizens is a major issue in contemporary markets. In active
government, its roles and functions when compared to the more conservative laissez-faire
form of government, is a government that is liberal and extensive in market decisions and in
public policy.
Active governments become a crucial factor in the local economy. Many roles and functions
are played by this form of government as well. Like in active governments conservative
competitor laissez-faire, active government plays an extensive role in the currency function.
Along with this function, law enforcement of proper rights and contracts exist between the
market and society. National defense of the country as a whole and the market is of great
concern for both types of governments. Various taxation and education policies also affect
the market in how well the government is funded to provide adequate education to
members of society that participate in the market. These are just a few of the essential
factors that government must play in the market to promote economic growth and social
However, to provide the greatest market efficiency in growth and have equality at the same
time, additional roles and functions of government must be added. The government must
act as a stabilizer in the fiscal and monetary policies of the market. There needs to be an
agent of compromise in the market or too many fluctuations will exist. Regulation of all
businesses, especially infrastructure, needs a uniform set of rules and procedures to
maintain market stability. Without stabilization in electricity, transportation, etc., the market
would have consistent interruptions. In addition to regulating the businesses, the market
place does not take into account the consumers safety. It is impossible to have a separate
business that just regulated safety procedures and precautions like pollution. An active
government must regulate these items to provide the need of social justice and stability in
the market. In the market, the active government will also provide a social insurance for
injuries/diseases and benefits to the elderly and poor. This is a way to have everyone
contributing to the markets growth and providing more social justice. Active government
allows everyone that will and can be to be a part of the market. More education, as seen by
active government supporters, informs society on how the market will work, how members
of society can become a part of this market, and how their investment in the market will
generate a profitable return for them. As a result, the government in return, will then invest
socially. Social investments include resources for societys citizens in the areas of
education, research, technology, and in infrastructure. The investments are provided in the
means of financial grants to businesses for other means of investment that will benefit not
only them, but everyone in society.
Promoting efficient economic growth and maintaining adequate social justice is provided by
the active government form of markets. In reference to the text in class, a general strong
argument for active government was exercised. Active government achieves a sense of
balance between the government, the market itself, and businesses that participate in the
market. Within this balance, active government can achieve economic growth and social
justice equally together. Active government does not only promote efficiency but also
prosperity. The government plays a vital role in contributing to the economic growth and
prosperity through obtaining a high aggregate demand for goods and services. Demand
falters for goods and services while consumers or businesses demand may lessen,
however, an active government will step in and increase its spending to keep an inflated
demand for the product.
The priorities within an active government enable this balance and equally of economic
growth and social justice to exist in harmony. Economic security must exist in the market
because of the basic, general belief that markets are ruthless. Equality and social justice is
just as important as individual freedoms, liberties, and morals. With having an active
government, economic social inequalities are controlled by government through taxes. An
example from class in obtaining the balance of stable economic growth is comparable to
the environment. Less sacrifices, less instability. For efficient economic growth, stability in
the market must exist and that stability is provided by the government as a means to
decrease inequalities.

Labor and trade policies have declined the wages of non-college educated workers in the
US. Many factors and ideas exist why the wage decrease has occurred over the previous
10 to 15 years. A developing economy on the global scale may have had its impact on the
decline of wages. This is just one of the many factors that may have contributed to wage
decrease. However, according to Paula Voos in Reclaiming Prosperity, US Labor Policy
has been one of the main contributing factors to the decline in real wages.
Labor policy is all policy that affects the labor markets in the supply and demand of labor.
For employees, unions and their relationship with management effect labor policy greatly.
With unions, there is an underlying agreement with businesses employment policies to
create jobs and provide adequate training. Governments role in labor policy comes in the
area of wage reform, like minimum wage, and federal agencies that are used to control
labor policy. Reasons for stagnation of living standards and the decline of wages come from
women in the work place and the increase in family incomes with both spouses working.
This was done to prevent the familys income from decreasing. In the 1990s, to keep
increasing the familys wealth and income, no one is left in the home to work. An increase in
the equality and family incomes has rose but only because of each family member working
in the labor market.
US Labor policy has many explanations as to why such actions are taken. The government
in ways helps alter the balance of power by the process of dehumanization so that the
employees have less power than the employer. Decline in the wages over the past 20 years
deals with power relations. This is a struggle that is between the employer and employee.
Included in the power relations becomes technology in utilization of computers and other
well advanced technologies have increased the demand for skilled labors and have lessen
the need for low skilled workers. In return, the low demand for low skilled workers has also
decreased wages. Productivity ratings are much lower for non college educated laborers.
These people are looked upon as being slower, having more mistakes, and production not
to be exceeded by wages. If this would happen to take place, then inflation would greatly
increase. However, the government has a play in the decline of wages. High taxation is
responsible for squeezing the incomes of Americans. Income before taxes has been greatly
decreasing. These policies of power, technology, productivity and high taxation have greatly
affected the wages of non-college educated employees in the workforce.
According to Voos, the reason of slow labor policy is from slow productive growth in which
the production gains are not distributed to the working population. Even though there are
claims that technology impacts wage levels, there is no empirical evidence to prove that
technology in the production process effects employees wages. However, evidence does
prove that the wage decline is to decrease the power of employees. Within this slow labor
policy concerning production growth, there has been a shift in the balance of power to
globalization. Unions have declined, workers are subjective to compete with wages in other
areas where they are lower, and that moral capitalization has not helped in the increase of
wages. Policy that is inadequate to market changes and shifting the power to globalization
has greatly impact the labor force as a whole.
Voos describes the organization of the workplace to be one of a high performance
production system. A mass production system is being phased out quickly a replaced by
the higher performance system to have the same output but with greater efficiency. The
system is to be more productive and to be updated by the global markets in which
economic actions, especially efficiency, are organized on an internal scale and the increase
of new technologies have become a goal for international relations. In organizing the high
performance production system, western countries need to have a new system of
knowledge intensive technologies. In this alternative to the traditional, conservative
approach, two strategies that nations can compete in the international economy for higher
production and the possibility to increase wages are high quality products to have greater
productivity and efficient. There is a need for lower prices for better competition through
cost cutting measures other than wages.
High production is of a high quality and customized tailored products to the need of
customers. In this system, the use of top leading technologies is a must. Extensive
employee activity in helping management with decisions is beneficial. With the problems
with non-college educated employees, a high productive system requires the employee to
have more responsibility and high order thinking skills. High production may be in the need
of unions. However, it is difficult for background support from the government against or for
unions. Unions raise wages and benefits, but leaves non-unionized employees out.
Unionization is for higher wages to block the low wage strategy and enforce the firms to a
high production strategy. For this higher productivity, a guarantee assurance of security of
their job availability in production is needed. Greater cooperation is needed among the
employer and employee over wages, benefits, and working conditions. Poor communication
in the previous years could have also lead to the decline of wages. This particular type of
people is not very familiar with the company and does not understand how to petition
management for changes.
As it has been seen in the past few years, keeping wages low (sweating labor) has it
problems. Lower wages gives rise to the decline of the standards of living, more social
inequality, and the influence on the social and political economies of the country. Low
wages also undermines social stability and causes conflicts that eventually which weakens
the democratic system. The effects of US Labor Policy is greatly affected by everyone,
however, this one group, non-college educated employees, are greatly impacted in both
negative and positive ways.