Critics of regulations often argue that they hinder business operations. However, many regulations serve the greater societal good by preventing harmful practices that might otherwise be financially beneficial to some companies. For example, laws that prohibit pollution hurt businesses that would otherwise engage in environmental degradation, while regulations against child labor affect those who would exploit vulnerable children for profit. Such regulations are essential to maintain ethical standards in business.

There's a significant discrepancy between private gains and social benefits, leading to market inefficiencies. The government plays a critical role in reconciling these differences to ensure that businesses operate in a way that is beneficial not just for their own profit but for society as a whole. By enforcing regulations that discourage unethical behavior and protect public welfare, the government helps create a balanced environment where both businesses and society can thrive.