Deregulation is the removal of regulations, allowing industries to operate more independently. It is a controversial issue with supporters arguing it makes economic sense, while opponents claim it can result in abuse and financial damage.
When industries are mostly privately managed but largely controlled by a government through laws, this is regulation, but when regulations are removed, allowing the industry a free hand, this is known as deregulation.
Especially in mainly capitalist countries, industries often resist too much government interference. They don’t want to have to comply with extra laws created as this can cost money and create extra work. Many companies argue that the government does not have the right to determine how a private industry runs its business, and when it does, it costs everyone involved, including consumers, money. It is argued that when companies can govern themselves, they are perfectly capable of operating in ethical ways that protect the customer and do not lose profits.
Deregulation is not a new concept, especially in places like the United States. It has long been called out by certain sections of the US population that government interference in business, in the form of regulation and exercising control over business, violates some of the basic principles of society. To that end, many industries have fought and won deregulation, gaining much greater control over their industries and the standards they can personally set.
Removing regulations does not necessarily mean that all laws have been removed, but they can be simpler and easier to follow. Essentially enough laws for the company or companies to operate much more independently can be changed or dropped. Some industries in the US that have been subject to a degree or more of deregulation include energy companies, banking and trading industries, and many general transportation agencies.
It is true that the issue of deregulation is one that represents several different political points of view. Supporters of suspending, removing or simplifying some regulations argue that this makes economic sense. They suggest that dealing with strict laws leads to lost profit and this will always be conferred on industry customers through higher prices. On the other hand, simpler laws that allow a company to make greater choices mean less loss of profit and more potential money saved by the consumer.
The flip side of this is that deregulation can be costly and result in abuse. The slump of financial markets in the late 2000s was mainly attributed to the lack of sufficient laws to stop abuses, and the accumulated financial damage was significant and excessive, affecting those with a lot of wealth and those with very little. Even people generally in favor of deregulation began to demand greater government control of the market to prevent a recurrence of this economic disaster. Still others continue to oppose changes to current laws, suggesting that the market is fully capable of regulating itself.
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