The Sandbox Governing Principle: balancing private sector activities and government regulations

Sometimes we think the government is too involved in our lives and businesses. It creates layers of red tape hindering innovation and investment. Sometimes we complain that the government should be more involved to protect us from harm and corporate abuse. The need for regulation depends on the industry, technology or process it is meant to regulate. After all, we want proper barriers and regulation for processes that can affect our lives. The example of new medicines come to mind. On the other end of the spectrum, we don’t want government in the way of activities we consider trivial or inherently human.

It is a constant social discussion between libertarians and conservatives. On one end, libertarians want to minimize regulation, allowing individuals to choose. Meanwhile, conservatives like to set rules of conduct and keep them intact for the long run.

Every culture has those extremes and every opinion in between. How governing bodies deal with the wide range of citizen’s opinions is as diverse as there are countries. I cannot dictate what would be best for each nation of the world since the people within those nations are as diverse as there are nations. However, I’d like to take some time to illustrate a guiding principle I’ve been thinking. I call it “The Sandbox Governing Principle”.

As a holistic futurist, I try to find the most common denominator in whatever situation that faces me. The common denominator for a large group like the whole planet always circles back to the desire to get basic needs met because that’s the only thing all 7.4 billion of us have in common. No matter your thinking about how involved the government should be in our lives, we can all agree that we need food, shelter, security and a social purpose in our communities.

So no matter our preference as far as how we would like government involvement to be, we can all agree that we want it in that sweet spot that ensures we’ll get the basics from our economy.

“The Sandbox Governing Principle” is a way to visualize the relationship between government and the private sector. It has a bunch of sand in the middle, and a containment wall around it to keep the sand inside. If the box walls are too high, it is difficult for the kids to get in there to play. If the sandbox walls are too low, then the sand escapes, which allows the play area to expand in many areas it wasn’t meant to.

Similarly, if the sandbox is too small, the kids feel restricted in their play. If it is too big, then the children aren’t playing together anymore.

The analogy with real life is the box is government regulations, and the area in the middle is the market where the private sector lives.

The regulator’s job is to create a box of the right height and size for companies to play and thrive. Their job is also to prevent business activities from causing problems. The government should take every decision on the shape and size of the box based on the population’s basic needs first, and the company’s requests second.

I often hear people complain about private companies being abusive or trying to gain more power and take control. Hugely successful companies like Apple, Google, Facebook and Amazon are often discussed. I can understand the feeling but frankly, these companies aren’t to blame. Companies, big and small, are built specifically to generate more revenues and profits. This is the lifeblood of all companies and their entire reason for being. A small percentage of companies, like charities and not-for-profits, are created to do social good, but these entities are not those we complain about. Also, some company founders and C-suite executives may be sociopathic, but this is also the minority. Over 80% of all crimes committed in North-America are committed by people below the poverty line, not the wealthy.

Company owners have invested their money in the company to generate profits. They chose a board of directors to oversee their interests. The board member’s livelihood depends on their ability to guide the company towards more revenues. They, in turn, hire executives to run the company by hiring employees and buying equipment. All those people within the company have one fundamental duty: make sure the company generates more revenues and profits.

It is no surprise in our current employment-based economy, where work is a condition for social survival (and in many countries, physical survival), that companies compete against each other for market share. They are all trying to access the consumer’s limited supply of cash. It is also unsurprising, in industries where there are regulatory loopholes, that some companies will use those loopholes to out-compete others, sometimes to the population’s detriment.

Therefore, without the sandbox, companies would compete for market dominance without restriction, leaving a trail of citizen casualties along the way. Thankfully, most of our countries are nations of rules and laws. Good laws are created to prevent commercial behavior that that nation’s society considers amoral or illegal. Those laws, rules and regulations then guide companies by limiting their actions to those actions the culture deems appropriate and fair.

Some government rules are in place to keep people safe from market competition and others are in place to guide private sector activities towards certain national economic and cultural goals i.e. government incentive programs.

If the government does a great job setting up the sandbox walls, then it only needs to monitor the sandbox and identify players that don’t play by the rules, keeping them in check by applying fines and kicking the criminal and civil courts into gear.

Thus, if we want private companies to behave in a way, we can have our basic needs met, we need only to ensure we have good conscientious and active government in place. Companies playing in a proper sandbox will play within its boundaries, chase after their revenues and profits and will adapt to the shape and wall height of the sandbox. Some companies will emerge victorious while some will close in the eternal dance of supply and demand we citizens ultimately control.

This is putting the population, and its needs first. Company behavior will always adapt to the sandbox and the government is the one responsible for creating it. Where it becomes a problem is when governing bodies grant requests to the private sector without full consideration of the impact their decision will have on the population. We’ve seen a few cases of government granting huge benefits to companies recently with government justifying the act by claiming the company’s additional profits will “trickle down” to the employees.

That is contrary to how businesses work. Don’t believe it. Corporations don’t work that way.

It is, therefore, the duty of a nation’s citizens to stand up and choose the government they want in place and its leadership. Then, it is the citizen’s duty to keep that government in check. Technologies like distributed ledgers (blockchain) and artificial intelligence can help minimize the size of government and allow the population to be a lot more involved in governance. Our requests to the governing bodies can be expressed safely, efficiently and securely online nowadays. There are better ways to engage with government than going through fallible representatives. The population can send comments, videos and photos to the government which is analysed by artificial intelligence. Then the system can report to the government and even help divvy out the resources based on every community’s needs.

All the while consumers can enjoy the healthy, safe, low-cost, quality products and services we deserve from a healthy optimally regulated free market. We should also nudge the sandbox by voting with our wallets, influencing innovation from the private sector.

If governments would just do their job with regulation, creating proper sandboxes, only considering the good of the population they represent, their citizens, without being influenced by companies crying for preferred treatment, we’d be much better off.

We need to bring the focus back on the citizen, the consumer and give the people more power through available technologies and intelligently structured government. Government and private companies should serve our needs.

We can go from slaves of the system to controllers of the system if we wanted to. As always, it takes willpower, some elbow grease and willingness to change core systems to get there.