Term Paper on "Should the Free Market System Have Restrictions on It?"

Term Paper 6 pages (1873 words) Sources: 5

[EXCERPT] . . . .

Restrictions on the Free Market: The Gateway to Infringing on Successful Business Models and Eliminating Consumer Free Will

In Great Britain, advertisers are not allowed to use children in food ads aimed at young people, as well as in ads for foods that are high in fat, salt, or sugar which are included in programming aimed at children under 16 years of age. These government restrictions are based on the ever-increasing problem of childhood obesity which exists in the United Kingdom. Comparably, in the United States, the American Academy of Pediatrics has called for a ban on food ads within television shows aimed at children. In response, some of the country's most prominent food and drink manufacturers, fearing media attacks and limited consumerism, agreed to voluntarily devote at least half of their advertising to foods and lifestyles that are considered "good" for children. However, despite this promise by manufacturers, this has not happened, and as a result, the Federal Communication Commission is considering modernizing the rules on commercial time during children's television programming.

With the ever-increasing problem of childhood obesity throughout the world, and especially in modernized western societies, it appears as though the whole of society is simply looking for a credible direction in which to point their blaming fingers. Companies whose business models have always existed under free market guidelines, with the rule of supply and demand governing their business dealings rather than government oversight and regulation, have done so for years in a manner that seeks to maximize publicity and therefore profits, for their respective market corners. Additionally, companies such as those in jeopardy of losing their long-held business rights, have long provided significant boosts to western nations' respective economies.

No amount of advertising or company-targeting has the ability to force consumers to adhere to company beliefs or buy the products advertised. No matter how many times an advertisement for a "McDonald's Value Meal" runs during consumer-watched programming, the truth remains that no McDonald's executive or employee will ever come to that consumer's door and force-feed their product to that individual. As such, companies are not to blame for doing their part to increase their profits. The western consumer has a capable brain and with it has the knowledge-base to understand what is and is not good for their respective body. Companies existing in the free market should not be restricted in a manner that limits their target audience, and problems like childhood obesity remain based not in the way the free market is handled, but in the realm of parenting and education for all children in these nations.

History of Regulation of Children's Advertising and Parental Duty

The existence of free-market standards have long allowed companies to advertise under the guidelines of their own proven-to-be successful business models, and additionally, these business models have long contributed immensely large sums of money into national economies throughout the world. In looking at the aforementioned issues plaguing America today, one can better understand how this situation can be handled by understanding how the government has handled this issue in the past and learning from the mistakes that presented themselves.

In the 1970s, both the FCC and the FTC completed extensive examinations of advertising directed at children. The FCC issued a policy statement asking networks to voluntarily limit the commercials aired during programs directed at children, and the general public found that these limitations were fundamentally unfair for advertisers (CTRPS, 1974, pp.1). As such, the FTC received harsh political and public response to this proposed rule-making, and the Washington Pose called this proposal, "a preposterous intervention that would turn the government into a great national nanny" (the Washington Post, 1978, pp. 22).

While some might say that while these provisions dealt with the capacity of commercial broadcasting and not the content, one can certainly apply the "national nanny" factor to the problem being faced today. In the case of commercial regulations on businesses and their advertising, as impressionable as children are, it is up to a child's parents to say yes or no to their children regarding what their children ask of them. Today, multitudes of issues dealing with children are blamed on external things, and society rarely sides with the heart of the matter, which comes down to parental responsibility. While advertising can act as a temptation for children, essentially it is a parent's duty to regulate their children, and not for the government to regulate the advertisement of foods that are deemed "unacceptable" in the minds of many parents.

Pinpointing the Problem: Advertising or National Food Insecurity

While Americans are quick to blame the nation's obesity issues on fast food and the marketing of "unacceptable" sugary, salty, processed or fatty foods, many individuals, including dieticians, preach the fact that these foods are not inherently dangerous to human beings, including children, if they are eaten in moderation. Consequently, many individuals throughout the nation, eat these "unacceptable" in moderation and in balance with a healthy diet. For many parents, fast food or unhealthy items are purchased on rare occasions and in rare quantities. While children may see a new toy associated with a fast food meal on television and begin asking parents for it, it is up to a parent to enforce moderation. Even fast food organizations, for instance, understand this moderation, and change the coveted toy option in children's meals on a weekly to bi-weekly basis, which encourages parents and children alike to indulge in these meals infrequently. Further, significant advertising dollars have been spent throughout such companies to market the healthy options that come packaged with these meals. Perhaps, then, these companies are not entirely to blame.

What can be blamed, however, is the nation's levels of food insecurity that exist in impoverished areas throughout the country and the availability of cheap fast food that exists for a nominal fee in close reach to many families. Research has found that the relationship between food insecurity and childhood obesity is far closer than the relationship between childhood obesity and child-centered food advertising (Garasky, Gundersun, Kuku, 2012, pp. 21). Additionally, research has shown that it is not so much advertising dollars and ads as the general knowledge that fast food and other products exist that leads to its purchase and consumption (de Jong, Luo, 2012, pp. 604).

While there is absolutely no disputing that the issue of childhood obesity has managed to grow to a seemingly out-of-control level, in understanding the research at hand, and the understanding that there are many factors that contribute to this epidemic, it must be understood that the advertising of these "unacceptable" foods is simply not the overarching factor behind the problem. Many different factors contribute to this problem, and in allowing the government to intervene in the advertising of such products, the free market is in jeopardy of being essentially destroyed by a Pandora's box of regulations that will likely be monitored in the future. Unlike the limitations of alcohol or tobacco products during children's programing, the marketing of food is inherently different and therefore inherently different in its capacity to be marketed. Individuals need food to live. Companies need customers to survive. Therefore, the relationship between the two is easy to pinpoint. Just as tobacco products come with a warning label, so do food products with their depiction of nutritional facts (which are included now in many fast food items as well). The burden then lies with the consumer, to understand for themselves what they are putting in their bodies, and not to be swayed by the advertising industry or the government, which while influential, cannot make the final decision.

Value of the Free Market

In viewing the information at hand, reasonable individuals can immediately see that markets need to be free to be fully functioning. When the government interferes in the market and begins dictating what market participants can and cannot do, resources cannot flow to their most efficient capacity. Author HaJoon Chang, in his recent book, notes:

"If people cannot do the things that they find most profitable, they lose incentive to invest and innovate. Thus, if the government puts a cap on house rents, landlords lost the incentive to maintain their properties or build new ones. or, if the government restricts the kinds of financial products that can be sold, two contracting parties that may both have benefited from innovative transactions that fulfill their idiosyncratic needs cannot reap the potential grains of the free contract" (Chang, 2011, pp. 23).

In essence, people must be left free to choose, and this must be mirrored in the market. While the United States has seen times of economic disparity and struggles, this nation, operating under the standards of an essentially free market has not done too bad in the slightest. The role of information in the free market has always been the center of its success and the success of the companies that operate within it. This information is not limited to the business-end of dealings, with information coming in on a constant… READ MORE

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