Major Law Questions in America - Essay Example

This formula of economic working rests on three fundamentals: property, competition, and trust (American Government, 2004), and especially the last two postulates.

What the Enron-Arthur Anderson case has shown us is the flaws, or rather, the weak points of such an economic system, which depends so much on subjective, non-regulatory postulates as trust and promise-keeping. The competition, which forms the spirit of liberal economy means that companies and businesses would, by hook or by crook, try to gain an edge over their competitors, and increase their clientele. Although the clause of trust is there precisely to control such a monopoly and twisted shape of affairs, in a market where everyone is trying to gain the upper hand, this control check tends to be weakened. However, the Bill of Rights prevents governments to perform otherwise. The only way to deal with such bonding between companies and businesses, and the violation of trust is to apply much stricter measures and checks on businesses to ensure they are following the law, even if there may be other vested interests of influential bodies, like the Congress (American Government, 2004) in their operations.

Laissez-Faire is French for left alone (American Government, 2004). This concept of freedom has been embedded in the economy and the business sector of the nation, especially after the Civil War, when government intervention was seen as a hindrance in the general development of the public, while only a few corporations benefitted from government subsidies. It means that if people are left on their own, economic as well as social development would be incurred because only those well-suited to the economic environment would thrive, akin to the natural selection of the fittest in Darwinism (American Government, 2004). The Constitution can be seen largely to support this philosophy, as the Bill of Rights states that governments would not interfere in the matters of the public economy unnecessarily, and the Declaration of Independence promises life, liberty, and the pursuit of happiness as three “inalienable rights” of the people (American Government, 2004). This means that in essence, it promotes public freedom in the economic sector, with people deciding on their own how to proceed with their businesses. However, the same constitution in Article One promises equal opportunity and non-discrimination to all (American Government, 2004), and in the economic sector, this becomes near impossible without government intervention, as huge corporations, sometimes seen as monsters (American Government), take over most of the market, monopolizing the sector and virtually ruling over the laymen. This clause of the Constitution, in this context, appears anti-laissez-faire, and government subsidizing of important businesses becomes imperative to apply checks and balances.

The modern state, according to the Declaration, holds to the rights of the people concerning liberty and property, or as stated in the document, the pursuit of happiness. This means that people retain the right to own property and to conduct businesses over them as they deem fit, all the while staying in the parameter of law. This results in great competition, and impertinent risk-taking. The Constitution does seem to encourage this risk-taking as the third fundamental of the liberal economy which it endorses is trust. Hence, indeed, the modern state encourages risk-taking and encourages liberal economy which is risk in a safety net provided. This safety net is, in the modern economic environment, the modern corporation with limited liability (American Government, 2004), which means that people can pre-calculate their losses before investing money in businesses, so the general public investment booms, whereas the risk factor is reduced by its security of calculated losses, nourishing the economy of the state. Touting it as a democratic form of the economy as the stakes are in people’s hands (American Government, 2004), the government, and indirectly the Constitution, does provide a safety net for risk-takers in a so-called insurance state.