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Capitalism Needs Strong Government Regulation, says over 75% of Canadians

by David Doorey November 11, 2009
written by David Doorey November 11, 2009

Should the state regulate labour markets, or leave the determination of terms and conditions of employment to the ‘free’ market by leaving employers and employees to ‘bargain’ those terms without government intervention?
This is a prevalent theme in my employment and labour law courses, and it has been a source of public policy debate for as long as there has been employment.  While economists like Richard Posner and Richard Epstein of the “Chicago School” and corporate lobby groups like The Fraser Institute favor market-based solutions and limited state intervention in labor markets, every government in the world regulates employment to some degree in response to perceived failings of the market model to ensure decent working conditions and a sustainable distribution of wealth.  To argue that society is better off when workers are left to their own devices, without any legislative assistance in terms of strong labour regulation seems, well, so ‘1980s!
Earlier this week, the BBC published the results of a very interesting international survey it commissioned on opinions about capitalism and regulation. It was conducted as part of reflections on the end of the Soviet Union twenty years ago, which was hailed as a great victory for capitalism over communism.  Of course, there are very different forms of capitalism that vary widely in terms of how much government regulation of business is considered prudent.
The study found that almost a quarter of respondents, from 27 countries, believe that capitalism as an economic model is fatally flawed.   Twenty percent of Canadian respondents felt that way.  About 55% of Canadians indicated that “capitalism has problems that can be addressed through government regulation and reform”.  Only about 12% of Canadians felt that “free market capitalism works well and increased regulation will make it less efficient”.   This shows that the arguments of The Fraser Institute and the Chicago economists, while influential in the 1980s and 1990s, have lost their appeal to the vast majority of the world’s population.
The survey suggests strong support in Canada, and most everyone else, for stronger government regulation of business activities.  Only in Turkey did respondents say they would like less government regulation of business.

More than 29,000 people in 27 countries were questioned. In only two countries, the United States and Pakistan, did more than one in five people feel that capitalism works well as it stands.

And there is very strong support around the world for governments to distribute wealth more evenly. That is backed by majorities in 22 of the 27 countries.

I’ve noted here before the various studies that show a link between strong labour and employment laws and smaller income inequality.  Michael Lynk recently wrote about this point.
If public support is high for greater state intervention in markets, and strong labour laws result in lower income inequality, can you think of arguments against government regulation in the ‘free’ labour market?  Should governments therefore pass laws to make it easier to unionize, that raise the minimum wage, that cap executive compensation, that guarantee pensions?

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David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

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Not seen comparable stats for Canada.There are terminations, but also better laws in most Canadian jurisdictions, including

- remedial certification
- interim reinstatement
- card-check/quick votes

“1 in 5 workers in US is fired for organizing a union” https://onlabor.org/labor-law-reform-is-needed-for-unions-to-succeed/

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