INVESTOR BLOG

Monday, June 06, 2005

Government and Business

The government is (supposed to be) a benefactor to society and an equalizer of wealth and opportunity in that it possesses the legal authority of taxation and lawmaking. For example, the government imposes and collects taxes and then spends those taxes for society's benefit - though sometimes money is lost or wasted "accidentally". Or the government may launch anti-trust suits and create laws to promote more efficient competition within the business world as it has done with several large corporations in recent years.

The government is also a sort of "business partner" in that it can provide opportunities, funding, and legal benefits to businesses. Lobbyists working for a drug company like Merck (NYSE: MRK), for example, can gain permission for the selling of a new drug by negotiating with the FDA (a government body).