Laissez-faire doctrine was generally accepted by all the political leaders of that time and the role of the government was limited to the maintenance of law and order in economic affairs. The concept of regulatory authorities was introduced much later and the government’s involvement was kept at a minimum during the early years of independence. This was done for the protection of the interests of the investors and capitalists of that time because the newly born country was not in a position to support its economy on its own and the confidence of the investors had to be built up. The strategy was successful and was the most significant factor behind the rapid economic growth of the country in the immediate years after the War of Independence. However such a strategy could not have lasted forever and therefore during the later part of the 19th century farmer and labour movements started to emerge in different parts of the country in protesting about the oppressive behaviors of the investors and capitalists. Under these circumstances, government had to change its strategy and with the emergence of the first labor union in 1820’s the government started intervening in the economic affairs of the country.
The emergence and establishment of labor unions in the country was a significant factor in bringing about a revolution in the economic life of the country (Danny). These changing conditions resulted in the formulation of an educated middle class in the country which forced the government to introduce regulations in the business practices in order to ensure the provision of rights to the employees, establishment of free market economy and to ensure quality control.
The Sherman Antitrust Act which ensured the presence of competition in the market by barring large enterprises from establishing a monoply in a single industry and the Interstate Commerce Act, a regulatory mechanism for the railroad industry which required the railroad fares to be kept ...Show more