The involvement of the government in operations of private enterprises has existed across the globe. The American government has regulated business in different ways since the 1800s. These interventions increased progressively from the 19 th century to the 1930s as it interfered with business and free trade through setting up rules that regulated the business environment. The efforts by the government equally influenced workers, which later empowered them to join unions and shape their workplace conditions. From the late 1800s to the end of the 1930s, increasing government interventions and regulations of business tended to help the overall economy and the common workers.
For a long time, government interventions have always protected small business from being edged out by huge companies that sought to operate as monopolies. Business autonomy that was evident before the 19 th century created an environment in which huge business could force out small business through restrictive business practices. However, the regulations created a balance that enabled small enterprises to coexist with large enterprises and create a free competition. For instance, the Sherman Antitrust Act of 1890 broke up monopolies in different industries and hence created an environment in which small enterprises could thrive (Schultz, 2018). As a result, more small enterprises were established and operated freely within the American economy, which led to a tremendous growth in the American economy as the country’s GDP increased tremendously. Moreover, it provided more employment for many people and hence reduced the rate of unemployment. Therefore, the intervention had a positive impact on the American economy.
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Subsequently, government regulations facilitated the formation of workers unions that agitated for workers welfare during the “New Deal.” The period of the Great Depression presented several challenges to the American economy. The level of unemployment rose to unprecedented levels in American history, and the workers had low bargaining power. The employers took advantage of this weak worker bargaining power to offer low wages and exploit workers to their advantage (Rauchway, 2008). As a result, President Roosevelt and the Congress enacted a raft of legislative and policy measures that allowed workers unions and strengthened their activities in the workplace. These tactics yielded great results in improving the welfare of the workers, better pay for the workers, and the overall American economy (Jacoby, 1983). Therefore, this government intervention had positive effects on both workers’ welfare as well as the overall American economy at the time.
Moreover, government regulation of banks stabilized the banking industry and eliminated potential fraud that would have adversely affected the economy. The federal government established the Federal Reserve System in 1913 and became instrumental in defining how banks operated (Schultz, 2018). For instance, the intervention focused on controlling the activities of banks and the money supply in the United States economy. For, instance, it led to more stable banks within the economy that was able to offer reliable banking services. Moreover, it protected the interests of the depositors and ensured that their deposits would be safe in the bank. Up to date, the Fed has also helped in preventing inflation by controlling how banks operate. The bank cannot collapse without refunding the depositors. The support that a stabilized banking system offered to business in the period beyond 1930 served to accelerate the economic development of America.
Lastly, government interventions served to protect consumers from exploitation retailers and merchants through the passage of several laws. For instance, the Food and Drugs Act aimed at regulating the quality of food products availed to American consumers (Schultz, 2018). It further put in place controls for the manufacture and distribution of drugs. Consequently, the intervention protected the consumers from getting harmful and low-quality food products. As a result, consumers’ confidence in the locally manufactured food products grew. Food companies were able to increase their market within the country. This increased foreign investments into the country and led to the overall growth of the American economy. As such, government involvement in regulating business environments had a positive impact on the American economy.
Opponents have argued that increasing government interventions and regulations of business hurt the overall economy and the common workers between the 1800s and 1930s. Ideally, interventions limited the growth of the large business that would have otherwise formed monopolies and offered higher employment opportunities and increased tax to the government. However, the argument disregards a large number of businesses formed through the restriction of monopolies. The resultant employment opportunities created and revenue generated outweighs the benefits that would have resulted from monopolies (Schultz, 2018). Secondly, such opponents argue that strengthening the worker's unions hurt employers and their business. It resulted into increased cost of business and threatened to push some businesses out of the industry. This argument equally disregards the opportunistic advantage that employers were taking on the state of unemployment during the 1930s (Rauchway, 2008).
In summary, government involvement in businesses had a great positive impact on the American economy during the period between the 1800s and 1930s. Such interventions and regulations created a level ground were all businesses could coexist. This led to great improvements an increase in the American economy. Strengthened workers unions led to improved working conditions and increased wages.
References
Jacoby S. 1983. Union Management Cooperation in the United States: Lessons from the 1920s . http://libdatab.strayer.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4462675&site=eds-live&scope=site
Rauchway E. 2008. The Great Depression and the New Deal: A Very Short Introduction. eBook. http://libdatab.strayer.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=218056&site=eds-live&scope=site
Schultz K. 2018. HIST: Volume 2: U.S. History since 1865 . 5th Ed.
