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Ashley Levins

Todd Gunsher

AP Seminar

21 April 2017

Laissez-faire existence faces the increase of government regulations

America, along with many other countries, has a long history of manufacturing upturns.

The colonization of the western hemisphere brought hope for political, economic, and social

freedom. Out of this idea of freedom, Laissez-faire emerged as the shoulder for manufacturers to

lean on. Workers and managers were able to carry out business without the government

constantly looking over their shoulders. However, incidents began causing concern for safety and

well-being. Organizations collaborated with the government to spread the image of a safer, more

regulated manufacturing world. At the beginning of World War II, the war propaganda poster of

Rosie the Riveter was used with the intention to attract women to work in factories. Despite its

main purpose, it could be believed it depicted a woman with pulled back hair, a tight-fitted

jumpsuit, and the rolled up sleeves that showed what ‘a proper manufacturing employee’ should

look like (Westinghouse). This might be caused by companies wanting to display strong and

confident women for the workforce, but no matter the intention, the clothing and hair sent a

message of safety in the workplace.

The next few decades brought an increase in factory regulations. According to Joseph

Wert, professor at Indiana University Southeast, progress in the years of Nixon and Ford created

difficulties for agencies to promote regulations “because of the requirement to perform

cost-benefit analyses. The media, during the Carter administration, began to push horror stories
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of overzealous bureaucrats and unnecessary regulations” (Wert). By the time George Bush left

presidential office in 2009, regulations had been cut back significantly, and managers refused to

accept new regulations, much less ensue existing ones.. After time, consequences to these events

added up and led to an extremely weakened regulatory system when Barack Obama took

presidential office in 2009 (Wert). Freedom is the basis of many countries around the world, but

in order to help regulate safety, finances, and workers, the government prefers to parent the

manufacturing industry. This strategy has been questioned by workers and managers alike, as

present day factories are swarming with regulations. Between history’s idea of cemented

freedom and present day rulings, have government regulations strewn too far from laissez-faire

practices in manufacturing companies?

History has shown that a non-regulated work environment can risk the physical

well-being of workers, and it can hurt company finances. On March 25th, 1911, a fire erupted on

the eighth floor of the Triangle Shirtwaist Factory (Linder). In the midst of the chaos, an

employee attempted to use a water hose, but the pressure was shut off. Employees tried to escape

down the narrow fire escape, but it collapsed; some made it through the narrow stairway in time,

and others were able to squeeze into the single-person elevator before it stopped running.

Douglas Linder, historian and creator of the Famous Trials website, presented the ending fact

that by the time the fire was put out, 145 employees, mostly young women, died due to

inadequate regulations. Two weeks after the event, the grand jury convicted the Triangle

Shirtwaist Factory owners, Isaac Harris and Max Blanck, for manslaughter (Linder). Much later,

in New Philadelphia, Ohio, The U.S. Department of Labor's Occupational Safety and Health

Administration (OSHA) attempted to fine Lauren Manufacturing $274,934 after an accident

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where an employee had a finger severed. “It was the second serious accident suffered by an

employee in less than 18 months, resulting in OSHA placing New Philadelphia-based Lauren

Manufacturing in its Severe Violators Enforcement Program,” (Plastics). OSHA also explained

that Lauren had allowed temporary employees to continue work without the required training,

failed to implement lockout procedures regularly, did not implement rules on adequate footwear,

and exposed employees to open electrical parts (Plastics). Senior loss prevention consultant,

Stephanie Levins imitates OSHA inspections to help manufacturers avoid fines and

consequences like the ones Lauren Manufacturing faced. In a recent interview, Levins, who

holds an Associate Degree in Risk Management, ​explains that Workers Compensation, a

common worker protection regulation, allows employees to “go home the way they come in,”

and they usually end up learning safety habits that they can use at home (Levins). When asked

about laissez-faire practices in companies, she explained veneer manufacturers have not changed

their working conditions since the 50’s. Because of this, Stephanie elaborates, workers

compensation claims rocket, which in turn creates a “rotating door of employees.”

Physical well-being is not the only concern for workers and employees; mental and social

stability is vital. Recent studies have been analyzing the effectiveness of enforcing social

regulations for the good of the workers’ ethic. Memoona Zareen, a graduate of the University of

Management and Technology in Pakistan and her team studied the relationship between

employees’ work ethic and the leadership style used. They gathered data through 100 employees

from five commercial banks. Analysts studied the central tendency and proximity of employees’

want to work, and three different leadership styles: transactional, transformational, and

laissez-faire. Findings concluded that transactional leadership style had the greatest positive
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impact, and laissez-faire followed with the second greatest impactfulness (the laissez-faire style

allows managers and employees to to use their abilities to their full extent by providing

necessary resources and letting each person act upon the job with freedom to make decisions

accordingly). By using transactional leadership, 48% of employee motivation can be achieved,

while laissez-faire leadership data only displayed an achievable 38% of employee motivation

using this style. Also, a positive correlation was found between the employees’ will to continue

working, and their organization (Zareen). Yet, a review of business ethics, which includes a

breakdown of food labelling regulations, countered laissez-faire use. Pearce, who has lectured

politics and ethics at multiple colleges, reviews a study written by Catherine Humphries, Chief

Scientific Adviser of the Co-operative Wholesale Society. Humphries mentions that The Food

Labelling Regulations​ ​explain how a product should and should not be advertised; the name and

illustrations should be specific enough for the customer to understand and distinguish from

others, and required marks should not be hidden or rewritten so not to mislead customers.

According to the common ‘free market’ model that Humphries includes,​ ​the manufacturer should

not deceive customers into believing that a low quality good is of high quality. Despite the

suggestion of morality, made by many people, there is no specific law that addresses the

requirements for illustrations of products, therefore leaving open a hole that could mislead

customers and conceal imperfections (Pearce).

Another work environment that displays a regulation-supported workforce is one where

technology use, explains Leo Simonovich of ​Presence Saint Joseph Hospital, is at a rapid

increase; the ​oil and gas industry. However, despite the effectiveness, adding extra digital use

enables the “attack surface to grow dramatically,” which presents more cyber-vulnerabilities.
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Christina Sames, American Gas Association’s vice president, made an announcement of the

recent development in the coverage of cybersecurity. Sames, on account of regulating the oil and

gas industry, announced that the AGA will take more steps to insure safety from cyber attacks.

However, simple security will not cover the oil and gas industry from cyberattacks, as many

parts of the industry are becoming more digitalized. Companies in this industry have put in

systems to control networks along their cybersecurity deploys in order to increase control,

insights, and visibility; upstream, midstream, and downstream. This allows companies to

“achieve big gains in operational efficiency, visibility and safety” (Simonovich).

Despite the benefits and the structure they build for companies, regulations can harm a

company’s finances and business hierarchies. Levins explains that most manufacturing

regulations are ones of OSHA, The Food & Drug Administration, and the Environmental

Protection Agency. Despite the placement of condition regulations, not all manufacturers follow

them. “​Many of the companies I work with try at least to a certain degree, but since it can be so

costly to provide training to all employees, personal protection equipment, production costs due

to additional guarding which slows down production, etc.,” Levins elaborates. “It can cost the

community more for products due to the additional cost of regulated items such as workers

comp compared to other countries that do not have nearly the amount of regulations.” On the

economic side, though,​ University of Sunderland radio and journalism professor Guy Starkey

elaborates on the near-monopoly of a popular radio station. Ofcom, the current regulator for

commercial radio, has insisted on enabling policies that encourage “consolidation within a sector

seemingly intent on homogenising its output as much as possible” (Starkey). This is resulting in

local radios to strive, and in turn much larger radio stations have little to no local coverage,
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which is their most profitable section. In effect of this, larger radio stations are reaching to

expand, in hopes to smother out the favored, local stations so that profits are not lost. One of the

UK’s largest radio stations, Global Radio, rebranded local stations as its own in order to

maximize profits. By 2010, 33 stations had been acquired and rebranded by Global. However,

those stations became 15 “super stations”, which led to 200 staff members being laid off due to

their expansion. However, when larger stations take over smaller, local stations without

consideration of job loss, it leaves little to no room for regulators and producers to consider

giving larger stations headroom. Consequently, a deal was made with an Irish media station to

avoid monopolies and mergers from taking the upper hand. This profit-motivated strategy,

condoned by the government and regulators, lead to a widespread accommodation commercial

radio. Thus, the last remnants of local uniqueness have now all but gone from those radio

stations. Localness is restricted to a “regulatory minimum of isolated local programmes in

daytime, local commercials (that local advertisers, and even the centralising management would

be loathe to lose) and increasingly diluted local news, much of it produced outside once

distinctive editorial areas” (Starkey).

Similar to Starkey, Henry Wai-chung Yeung, Professor at the University of Singapore

who has a PhD from Manchester University, explains the downfall of a system due to

neoliberalism. Hong Kong’s manufacturing system, which is known for transactional and

non-extensive mass production, has been facing “competitive pressures” from neighboring Asian

companies. Neoliberalist transformations “through strategic choices and political struggles by

major social and institutional actors are necessary in order to restore the ‘equilibrium’ of the

capitalist mode of production. Hegemonic structures must be re-established in order to prevent a

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breakdown in the system itself.” After Hong Kong’s war crisis, a free-market-based economy

expanded with authoritarian rule. By 1965, about 37% of the Council was businessmen, mostly

British expatriates. However, Yeung explains that “their presence and influence in the Councils

was restricted to areas not involving fundamental significance.” Out of the few Chinese

unofficials, only 19% were placed as representatives of the industrial class. An example of this

condonement is when multiple requests for a protective tariff were made, but they were

dismissed by the British-engulfed government. The protective tariff was necessary for the

regulation of yam and textile imports, but the requests were ignored (Yeung).

In the examination of laissez-faire analysis, studies were mentioned to identify the

controversy of whether laissez-faire has been too far smothered, or if regulations have proved

better for the world’s largest industry. After all, despite the importance of physical and social

well-being, in lies the conflict of finances, hierarchy, monopolies, and company influence. At the

same time, some regulations help employees to have the same opportunities, wages, and time off,

as explained by Adam Smith, scottish economist, philosopher, and author. In his famous book,

The Wealth of Nations,​ he expressed that regulations help employees to be in a more safe

environment, decreasing hazardous labor conditions. In many cases, someone who does a few

hours of hard work might make the same amount of money as someone who does a few hours of

less invigorating work (Smith). Due to these benefits and the boom of laissez-faire in the

nineteenth and twentieth centuries, as Max Handman, Chairman of the American Economic

Review, conveys, the decline of laissez-faire is greatly due to the incline of rising regulated

markets. Free markets are becoming near extinct, pushing behind the once popular “catchword,”

laissez-faire. This is causing concern in the workforce and company management, as employees
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are more confined to regulated ways. In light of this conflict, common ground can be found in

regulating the fundamental and necessary aspects of manufacturing companies, such as safety,

equal opportunity, and even technology.. Absolute control by regulations has shown to be just as

ineffective as no regulations at all, so the solution is found with compromise; regulate the

industry on grounds of the aspects listed previously, yet laissez-faire would effectively remain in

social structure and finances. History has shown many sides to the

laissez-faire-versus-regulations conflict, but an overall picture displays that compromise would

be an effective way to ground the manufacturing industry.

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Handman, Max. "Round Table Confrences." ​Economic History - The Decline of Laissez-Faire.

22 (1931): 3-8. ​EBSCO​. American Economic Association, 2002. Web. 26 Mar. 2017.

Levins, Stephanie. "The Truth Behind Company Safety Regulations." Message to the author. 26

Mar. 2017. E-mail.

Linder, Douglas. "The Triangle Shirtwaist Factory Fire Trial." ​SSRN.​ SSRN, 25 Oct. 2007. Web.

22 Mar. 2017.

Pearce, Richard. "Social Responsibility in the Marketplace: Asymmetric Information in Food

Labelling." ​Business Ethics: A European Review​ 8.1 (1999): 26-36. ​EBSCO.​ Web. 14

Mar. 2017.

Plastics News. "OSHA Proposes Nearly $275,000 in Penalties for Lauren Manufacturing."

OSHA. Small Business Reference Center, 7 Jan. 2017. Web. 22 Mar. 2017.

Simonovich, Leo. "A Holistic Cybersecurity Strategy in Oil & Gas." ​Pipelines & Gas Journal​.

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