In a true capitalistic system, the government has no control over producers, prices, or business practices other than to be sure the producer is operating legally. The government adhering to the principles of the free enterprise or economic system will have simple laws that are applied equally to all. This government will not try to legislate ethics, morals, or ideology.
Socialist societies operate under a centrally planned system. This is an economic system in which the state or government makes economic decisions rather than the interaction between consumers and businesses. ... State-owned enterprises undertake the production of goods and services. A closely regulated economy also falls under the definition of central planning. Hitler’s socialist system operated as a centrally planned system even though the government did not own the different enterprises; the government controlled the enterprises as if they were owned by the state, dictating what was produced, the price or value of the product, and the rules and regulations of production and operations.
We have recently seen both systems at work in America. The one good example is how the consumer is reacting to the NFL and the so called protests that have spread beyond to the NFL to college and high schools alike. A Yahoo survey says that 44 percent of Americans report a likelihood of shutting off NFL games should players continue to kneel for the national anthem. The poll result follows Nielsen ratings showing that many fans already do something else besides watching football this season. Monday Night Football endured its lowest ratings earlier this week since moving to ESPN a decade ago and Sunday games also suffer year-to-year losses, albeit smaller than the double-digit decline witnessed at the Worldwide Leader in Sports.
If the consumer does boycott football, the owners will quickly change their product or they will to out of business. Yes, indeed the consume has that much power. If the consumer simply complains about the actions of the players but does nothing about it, the actions the consumer does not like will only proliferate.
There are two bad examples this week that show we are becoming more and more a centrally planned economy. Many of our elected officials, from both sides of the isle, believe it is there right and their prerogative to regulate and control business. Heather Bresch, the CEO of Mylan, defended to congressional lawmakers Wednesday the dramatic increase in the price of EpiPen, the life-saving drug used by those with severe allergies. “I think many people incorrectly assume we make $600 off each EpiPen,” she said, according to her prepared testimony released by the House Oversight and Government Reform Committee. “This is simply not true.”
Bad case number two: Wells Fargo's (WFC.N) practices of putting customers into fake accounts, which last week led the U.S. government to fine it $190 million, took center stage in Congress on Tuesday with staff members for Republicans on the Senate Banking Committee set to meet with representatives of the bank. Torrie Matous, spokeswoman for the committee's chairman, Richard Shelby, a Republican from Alabama, said staff had "been arranging briefings and collecting information from both Wells Fargo and the regulators" to prepare for a Sept. 20 hearing. The committee has been finalizing details for that hearing.
Five Democrats on the committee, including Senator Bob Menendez of New Jersey and Senator Elizabeth Warren of Massachusetts, had pressed for an investigation into the case that would include testimony from Wells Fargo Chief Executive Officer John Stumpf and Consumer Financial Protection Bureau Director Richard Cordray.
This is not the place of Congress. If either of these companies had violated a law, then the Justice Department should prosecute. Congress has no right in a free enterprise system to tell a producer how they should price a product. Congress has no right nor does it have a roll in telling the CEO of a company that they should resign, punish employees, or return a bonus. That is the roll of the Board of Directors. In both these situations, the United States Congress acted as if the United States was Nazi Germany or Soviet Russia. In those nations, both of them under the model of central planning, the governments assume role is to control and closely regulate business.
In the United States, a free enterprise system, the role of this type of regulation is the role of the consumer. The consumer does not have to buy a product, and the consumer does not have to do business with a specific business. Unfortunately, congress playing its assumed role of central planner, has so regulated our economy and made it so difficult for new businesses to enter the market, it is impossible for startup businesses to enter the marketplace. This greatly decreases competition and allows for what congress has called egregious pricing and unethical business practices.