Should e-commerce be regulated by governments, or should it should be allowed to be "self-regulated" by the forces of the free market. Economies work more efficiently when they are free from governmental interference. In this regard, a classical economist Adam Smith claims that an individual pursuing his self-interest by engaging in commerce is "led by an invisible hand to promote an end which was no part of his intention." This "invisible hand" is said to guide individuals to achieve greater collective wealth. Smith felt that the idea of the "invisible hand" applies to the realm of international commerce as well as to domestic commerce. However, Smith did not argue against government regulation in all instances. There are certain limited areas of economic activity where governmental regulation is necessary (to protect individual rights, for example). Smith also believed that it is permissible for governments to tax commercial activities, as long as the tax is collected on the basis of earned revenue.

Author: Samirul Ariff bin Othman. Publication/Conference: MIERScan, 19 November 2007. [Download]