Students of public affairs have observed that the paramount question today is not whether government shall regulate economic activity but rather to what degree and in what direction. An increasingly larger number of persons are beginning to believe that a new millennium has arrived in which we can confide all our troubles to a paternalistic government which will "pass a law" to remedy them. The fact that laissez faire represented a reaction against the extremes of mercantilism--a system under which government rules and regulations stifled industry--seems to have been forgotten. At the present time the pendulum appears to be swinging back to that extreme. But what assurance have we that government today is wiser than that of the mercantilistic system? Evidence has already appeared to indicate that the increase in red tape will undoubtedly stifle business again.
In its very nature, control by government whether manifested in legislative enactment or administrative order is coercive even though the party or parties coerced may not be readily apparent. Laws may order people to do those things which they would not do voluntarily or prohibit them from doing those which, but for the law, they would be free to do. Laws may also be permissive, that is, they may allow, although they do not compel, people to adopt a certain line of action. Such laws are illustrated by the recently enacted Fair Trade Laws. Even here, the law is coercive in effect since these laws deprive the merchant of the right he once had to sell trade-marked goods at any price he pleases. In other cases, the individual may be free to do what he wishes providing he pays certain penalties for non-compliance. If these penalties are very burdensome, as in the case of the Bankhead Cotton Control Act, this freedom is more illusory than real.
The writer is not one of those who feel that the doctrine of laissez faire is practicable or desirable under present conditions; on the other hand, he also does not agree with those who say "let the government do everything." There is a middle ground. As society becomes more complex the number of activities undertaken by the government must necessarily increase. Abuses developed in industry . . .