Question

Which of the following kept corporations under control?

Answer 1

The correct answer is: "labor laws and anti trust cases".

Both are elements which limit the actions of corporations when they pursue their own interest of profit maximization without caring about the negative consequences that their economic activity may be causing to other economic agents or to the society as a whole.

On the first hand, labor laws defined the terms that should govern a labor contract and the rights of employers and employees, so that any abuses can be commited on any side.

Secondy, anti trust regulations (like Sherman Antitrust Act) and cases enable to prevent the consolidation of monopolies, which have serious negative consequences for consumers: high prices, lower amounts of production (possible shortages) and lower quality products, and also for society, as monopolists who control an industry do not have incentives for investing on innovation or efficient tecniques.