Please note - this is a more modern belief. Something that solidified in the zeitgeist post 2008.
If you go to early Reddit, you will see it a staunchly pro market, anti tax stronghold - as was HN.
For eons, “competition” was the mantra along with “greed is good”. Many people who own wealth reached there with that ethos.
No one has to “contribute more”. That’s the opportunity for whichever bright eye person decides to take advantage of the gap in the market.
If you want a counter to this dogma -
1) Yes. Market inefficiencies should be open as opportunities to the industrious
2) No. Not all market inefficiencies are the same. for example, Public goods (police, military) are not better off with multiple companies. Insurance is similar.
3) Lobbying for convenient rules, lobbying for weakened regulators has given far more advantage to firms, which then use that wealth to become rent seekers. They dont need to innovate, because they can litigate.
4) “more regulation means higher compliance costs” was a new one I saw. Guess what - if your firm uses contracts, that’s a compliance cost. Why not just do it by a hand shake? Save your lawyer fees.
Compliance costs ensure fair play between entities of unequal strength. You can trade on your competitive advantage, not on the tertiary strengths, such as a firms ability to pay for a better legal team.
Edit: Soap box - This is about Personal Responsibility.
The place where most people agree today, is the desire for a fair fight.
How can I reasonably defend the idea of personal responsibility, in something like the sale of NINJA loans.
If firms field trained, resourced, networked sales people to sell loans to people who have a negligible chance of even understanding what they are getting into, then how do I reasonably bring up personal responsibility ?
Can people reasonably be expected to read all the contracts they have signed? ( Netflix, Uber, gmail, phone, etc.)
Algorithmic ads are fine tuned to grab your attention and keep you online. There is more money spent on UI UX research than the GDP of some global south countries.
Forget America for a second - imagine how regulators in smaller economies handle these things. Heck, that’s if they even have time to worry about these things.
> Lobbying for convenient rules, lobbying for weakened regulators has given far more advantage to firms, which then use that wealth to become rent seekers. They dont need to innovate, because they can litigate.
One of the big problems here, and the lobbyists do this on purpose, is that they promote the false notion that the issue is the quantity of regulations and not their substance. Quantity can be an issue when the number of regulations becomes excessive and their sheer number thwarts competition by creating high barriers to entry, but "incumbents want fewer regulations" is not only misleading but typically the opposite of what really happens.
Incumbents want to get rid of regulations that protect competition and add regulations that inhibit it. What we need, of course, is the opposite. Which isn't as simple as "make number of regulations go up/down", it matters very much which ones and what they do.
> Compliance costs ensure fair play between entities of unequal strength.
This is completely the opposite. Compliance costs are generally fixed costs, i.e. every entity has to hire a lawyer and pay them $250,000. For a megacorp this is negligible and they don't even notice, for a small business they're now out of the market because that amount of expense would bankrupt them. The more rules you have, the higher that number gets. This is the sense in which the absolute number of rules matters.
But it still depends what they are. Even if you only have a couple of rules, the incumbents will want rules that only they can comply with. Conversely, you can hypothetically have a lot of rules and still have them easy to comply with, though this is certainly easier said than done. What you really want is to have a small number of rules, but the right rules -- the ones the incumbents don't want and their smaller competitors do.
Just to be clear, you are quoting typical lobbyist talking points here? I definitely disagree with such a simplification.
I agree with the fact that incumbents want to make it easier to make money.
> This is completely the opposite …
Yes, I am in firm agreement that the content, quality and enforceability of the regulation matters.
That said, I used contracts as an example, specifically to combat this common reduction: “Compliance cost price smaller businesses out of the market, so they are bad for competition and the little guy.”
Writing up a contract is more expensive than trusting someone’s word, it is fair to say that having no contracts would enable more small businesses to flourish (lower costs).
Many things reduce costs, however firms / businesses having to bear compliance costs is not bad for the polity.
> Writing up a contract is more expensive than trusting someone’s word, it is fair to say that having no contracts would enable more small businesses to flourish (lower costs).
But now we're back to "what the regulation is matters more than how many there are". There can exist rules that benefit small companies, obviously. But if the rules every company has to comply with can fill three shelves at the library, this is not going to benefit small companies because they will be unable to operate.
> Many things reduce costs, however firms / businesses having to bear compliance costs is not bad for the polity.
It depends what they are.
One of most insidious is regulations that are ostensibly neutral, i.e. there is a societal benefit of approximately $100 per company on average and to get it the rule is going to impose costs of approximately $100 on the average company. The books are full of these because they provide some ostensible benefit and the cost isn't even being calculated. Nobody fights against them too hard because they're approximately breakeven.
Except that each of them adds $100 in compliance costs to every company, and there are ten thousand of them, so now every company in that industry has a million dollars in compliance costs, which small companies can't sustain. So the rules on their own provide neither benefit nor cost to society, but impair competition, and that has a societal cost.
If you go to early Reddit, you will see it a staunchly pro market, anti tax stronghold - as was HN.
For eons, “competition” was the mantra along with “greed is good”. Many people who own wealth reached there with that ethos.
No one has to “contribute more”. That’s the opportunity for whichever bright eye person decides to take advantage of the gap in the market.
If you want a counter to this dogma -
1) Yes. Market inefficiencies should be open as opportunities to the industrious
2) No. Not all market inefficiencies are the same. for example, Public goods (police, military) are not better off with multiple companies. Insurance is similar.
3) Lobbying for convenient rules, lobbying for weakened regulators has given far more advantage to firms, which then use that wealth to become rent seekers. They dont need to innovate, because they can litigate.
4) “more regulation means higher compliance costs” was a new one I saw. Guess what - if your firm uses contracts, that’s a compliance cost. Why not just do it by a hand shake? Save your lawyer fees.
Compliance costs ensure fair play between entities of unequal strength. You can trade on your competitive advantage, not on the tertiary strengths, such as a firms ability to pay for a better legal team.
Edit: Soap box - This is about Personal Responsibility.
The place where most people agree today, is the desire for a fair fight.
How can I reasonably defend the idea of personal responsibility, in something like the sale of NINJA loans.
If firms field trained, resourced, networked sales people to sell loans to people who have a negligible chance of even understanding what they are getting into, then how do I reasonably bring up personal responsibility ?
Can people reasonably be expected to read all the contracts they have signed? ( Netflix, Uber, gmail, phone, etc.)
Algorithmic ads are fine tuned to grab your attention and keep you online. There is more money spent on UI UX research than the GDP of some global south countries.
Forget America for a second - imagine how regulators in smaller economies handle these things. Heck, that’s if they even have time to worry about these things.