November 5, 2002
Massive losses to stockholders because of dishonest business practices
have lately caused some to question the workability of Laissez Faire Capitalism. They claim that we need government regulatation
of business to protect us from crooks. It's really much simpler than that.
All we need is better disclosure laws with heavy penalties for violation.
Government doesn't need to tell executives how to run the business, simply that they cannot operate in secrecy.
Investors are initially told what information to expect. They are then notified about business procedure as it occurs.
If there is non-compliance by management, or if investors don't like
executive policy, all they have to do is put their money elsewhere. This provides a natural free market incentive to management
rather than a meddlesome or coercive one.
