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>They don't take into account the fact that human beings are not independent, perfectly rational actors. and >That's the practical reality of fallible humans

>They don't take into account the fact that human beings are not independent, perfectly rational actors. and >That's the practical reality of fallible humans with finite computational capacity. and >Fortunately, laws do recognize that fact. A lot of them exist to shield people from being predictably exploited. And who votes in these people who enact these laws? Other people. They are not always rational, especially when dealing with issues of enormous complexity, that obfuscates the effects of policy. These laws will inevitably be used to stifle competition to vested interests, in the name of consumer protection. See [1] above. Governing a complex society composed of hundreds of millions of people through cookie cutter rules on what non-coercive interactions are exploitive is not practical. The spontaneous order of a decentralized, non-coerced society works surprisingly well. For example, after the Mt Gox insolvency, people in the cryptocurrency space wisened up, and stopped using Bitcoin exchanges that didn't use the highest security standards, like cold wallet storage. Yet the Wild West days of Bitcoin exchanges were a necessary phase at a time when the Bitcoin market cap was less than $20 million and no VC company in the world would have funded a Bitcoin exchange, so exchanges run by amateurs were the best we could hope for. In other words, had there been regulations requiring millions in capital to start a Bitcoin exchange, we never would have had a nascent exchange industry in the first place, and Bitcoin would never have gotten off the ground. As the market grew, and venture capital began flowing into exchanges, those exchanges became more professionally run and more secure. This was a natural evolution that didn't need to be guided by top-down decree. Also, the emergence of security standards that effectively protected against major hacks was a result of trial and error, and the culture within the cryptocurrency market of retail traders and investors evolving to become more vigilant. This is a more robust situation than a market of sheep consumers corralled by regulators who become the target of rent-seeking parties looking to use regulatory barriers to stifle competition. A couple of Bitcoin exchanges in the US were actually shut down in the early days, due to regulatory enforcement action, which contributed to MtGox dominating the market. Absent those regulatory restrictions, venture capital would have began investing in US based exchanges much sooner, and thus we would have had professionally run exchanges sooner than we did. In conclusion, regulations destroy innovation and the development of industries, and the lost benefits of that outweigh the short-term harm caused by an industry's growing pains. There is good reason societies that adopt liberal democratic principles have historically prospered relative to those subscribing to paternalistic ideologies. Thankfully with cryptocurrencies, industries operate more on liberal democratic principles, whether the political institutions want them to or not.

dwaltrip 9y ago
> In conclusion, regulations destroy innovation and the development of industries Let's go back to using leaded gasoline then, shall we? And we should remove all nutritional labels from food packaging. Safety ratings for automobiles are clearly a waste of time and are holding back innovation. Restaurant health inspections, also useless. And I'm sure building codes have nothing to do with the fact the we don't really have earthquake deaths in the U.S. anymore. And so on... Of course, not all regulation is effective, and some probably ends up doing more harm than good. But we shouldn't throw out the baby with the bathwater.
- Jabanga 9y ago
  Leaded gasoline damages the health of others without their consent. Restricting pollution is obviously not the kind of "regulation" I'm talking about. We should abolish mandates requiring nutritional labeling, safety ratings for cars (carmakers far exceed government safety requirements anyway, because it's good for business), restaurant health inspections, and building codes. That is not to say we shouldn't have nutritional labeling, safety standards, and restaurant inspections. But it should be voluntary, in response to consumer demand for certified safety and quality. Apple didn't become the largest company in the world by producing shoddy products. The market rewards a reputation for quality. In other words, society evolves toward safer and better quality products over time, whether it's through government mandates or simply changing consumer preferences and increasing consumer awareness. I would argue that the agricultural and food safety regulations have contributed to the modern industrial agro-business model, because they are naturally geared toward more centralized operations. Small farms that slaughter and butcher animals on the premises for example face significant hurdles due to agriculture regulations. Cookie cutter solutions mandated by the government kill diversity and encourage consolidation and centralisation. The government can play an active and positive role, by creating voluntary opt-in certification programs, that act as market signals for quality. For example, it can create a voluntary food safety certification that participating companies that meet its requirements can advertise with a seal on their products. The government can fund public information resources to better inform consumers of the options available on the market and how they compare in quality and risks. I am not arguing against a government role in the economy. I'm only arguing against mandating a cookie cutter solution that abridges the right of an individual to decide for themselves what risks to incur.

dwaltrip 9y ago

> In conclusion, regulations destroy innovation and the development of industries Let's go back to using leaded gasoline then, shall we? And we should remove all nutritional labels from food packaging. Safety ratings for automobiles are clearly a waste of time and are holding back innovation. Restaurant health inspections, also useless. And I'm sure building codes have nothing to do with the fact the we don't really have earthquake deaths in the U.S. anymore. And so on... Of course, not all regulation is effective, and some probably ends up doing more harm than good. But we shouldn't throw out the baby with the bathwater.

Jabanga 9y ago
Leaded gasoline damages the health of others without their consent. Restricting pollution is obviously not the kind of "regulation" I'm talking about. We should abolish mandates requiring nutritional labeling, safety ratings for cars (carmakers far exceed government safety requirements anyway, because it's good for business), restaurant health inspections, and building codes. That is not to say we shouldn't have nutritional labeling, safety standards, and restaurant inspections. But it should be voluntary, in response to consumer demand for certified safety and quality. Apple didn't become the largest company in the world by producing shoddy products. The market rewards a reputation for quality. In other words, society evolves toward safer and better quality products over time, whether it's through government mandates or simply changing consumer preferences and increasing consumer awareness. I would argue that the agricultural and food safety regulations have contributed to the modern industrial agro-business model, because they are naturally geared toward more centralized operations. Small farms that slaughter and butcher animals on the premises for example face significant hurdles due to agriculture regulations. Cookie cutter solutions mandated by the government kill diversity and encourage consolidation and centralisation. The government can play an active and positive role, by creating voluntary opt-in certification programs, that act as market signals for quality. For example, it can create a voluntary food safety certification that participating companies that meet its requirements can advertise with a seal on their products. The government can fund public information resources to better inform consumers of the options available on the market and how they compare in quality and risks. I am not arguing against a government role in the economy. I'm only arguing against mandating a cookie cutter solution that abridges the right of an individual to decide for themselves what risks to incur.