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Related point: big corporations _love_ regulation, since they can afford the cost but startups they might otherwise have to compete with cannot.

by jbellis 16y ago

notauser 16y ago
It should be obvious that they love some regulation, but not all of it. For example if AT&T and Verizon are so keen on it then why are they spending so much money fighting net neutrality regulation? Regulatory oversight of big players in one market to stop them crushing smaller players in dependent markets doesn't have to impose any obligations at all on those smaller players. Think about the App Store - if Apple were regulated so that they had to approve Google Voice-like apps, which Application Writers would that impose obligations on? Regulations are also sometimes set up so that they only touch big players. Monopoly regulation being the prime example. Finally some startups have actually gained advantage from regulation by ignoring it and choosing to accept the risk of their LLC possibly being sued. That's a heck of a lot cheaper than thousands of lawyer-hours and huge technical complexity. Skype and 911 is a good example.
Robin_Message 16y ago
Here I think you can distinguish between types of regulation. Lots of bureaucracy, with forms to fill in and specific certifications to get can be onerous to startups. For example, having to get FCC approval for wireless devices falls into this category. There isn't really a way around this, other than to make sure the bureaucracy is not excessive, which brings us to a tautology - excessive bureaucracy is excessive. However, much regulation is done proactively, for free. For example, restaurants don't pay for food hygiene inspectors, and if they have good hygiene practices the costs are minimal (and if they don't, we want them to fail.) I agree we want regulation to be of the second type, but sometimes the first type is the only practical way to do it (and you could still make it cheaper, e.g. by doing FCC-compliance tests for free.) Also, in reality there is a sliding scale for small and innovative companies, e.g. PayPal or Pandora. TL;DR Bureaucratic love-ins aside, regulation doesn't need to fall any heavier on the little guy than the big guy, and the little guy can often just ignore it (at least until they are big.)
- anamax 16y ago
  > I agree we want regulation to be of the second type, but sometimes the first type is the only practical way to do it You're assuming that the benefits of the first type exceed the costs. Regulation is systemic risk. It's also always captured by the politically powerful. > Bureaucratic love-ins aside, regulation doesn't need to fall any heavier on the little guy than the big guy It may not "need to", but it always does. Walmart can always amortize its regulatory burden over more revenue someone else can. And with the savings, they can get special rules and treatment. They get to write the rules. Yes, I know that you have good intentions for regulation, but reality trumps.
  - Robin_Message 16y ago
    Addressing this in a slightly different order: > > I agree we want regulation to be of the second type, but sometimes the first type is the only practical way to do it > You're assuming that the benefits of the first type exceed the costs. Yes, that's what I meant when I said "the only practical way to do it." FCC licensing is not prohibitive on innovative, small radio companies, and is hugely beneficial to avoid a tragedy of the commons. > > Bureaucratic love-ins aside, regulation doesn't need to fall any heavier on the little guy than the big guy > It may not "need to", but it always does. Walmart can always amortize its regulatory burden over more revenue someone else can. And with the savings, they can get special rules and treatment. They get to write the rules. Two things: amortizing is unavoidable, but Walmart has more regulatory burden than a corner shop, so it has both more costs and more revenues -- who knows what the ratio is? Often the corner shop avoids regulation costs by getting away with ignoring some of it, which is probably as near to optimal as we can hope to get. Getting to write the rules, we'll get to that. > Yes, I know that you have good intentions for regulation, but reality trumps. The Clean Air Act, the Factories Act, the Child labour laws, clean water acts, the powers that will be used on BP to make them pay for Deepwater, FCC spectrum allocation. Yes it's political, and yes it's messy, and of course special interests get more than their fair say, but those are problems with democracy, not regulation. My intentions are irrelevant, but reality works out pretty well thank you so very much. > Regulation is systemic risk. It's also always captured by the politically powerful. What's your point? "The politically powerful set the rules" is a tautology. The only way I can see you going from here is hardcore Libertarianism, and I don't bother debating that.

Related point: big corporations _love_ regulation, since they can afford the cost but startups they might otherwise have to compete with cannot.

by jbellis 16y ago

Related point: big corporations _love_ regulation, since they can afford the cost but startups they might otherwise have to compete with cannot.

notauser 16y ago

It should be obvious that they love some regulation, but not all of it. For example if AT&T and Verizon are so keen on it then why are they spending so much money fighting net neutrality regulation? Regulatory oversight of big players in one market to stop them crushing smaller players in dependent markets doesn't have to impose any obligations at all on those smaller players. Think about the App Store - if Apple were regulated so that they had to approve Google Voice-like apps, which Application Writers would that impose obligations on? Regulations are also sometimes set up so that they only touch big players. Monopoly regulation being the prime example. Finally some startups have actually gained advantage from regulation by ignoring it and choosing to accept the risk of their LLC possibly being sued. That's a heck of a lot cheaper than thousands of lawyer-hours and huge technical complexity. Skype and 911 is a good example.

Robin_Message 16y ago

Here I think you can distinguish between types of regulation. Lots of bureaucracy, with forms to fill in and specific certifications to get can be onerous to startups. For example, having to get FCC approval for wireless devices falls into this category. There isn't really a way around this, other than to make sure the bureaucracy is not excessive, which brings us to a tautology - excessive bureaucracy is excessive. However, much regulation is done proactively, for free. For example, restaurants don't pay for food hygiene inspectors, and if they have good hygiene practices the costs are minimal (and if they don't, we want them to fail.) I agree we want regulation to be of the second type, but sometimes the first type is the only practical way to do it (and you could still make it cheaper, e.g. by doing FCC-compliance tests for free.) Also, in reality there is a sliding scale for small and innovative companies, e.g. PayPal or Pandora. TL;DR Bureaucratic love-ins aside, regulation doesn't need to fall any heavier on the little guy than the big guy, and the little guy can often just ignore it (at least until they are big.)

anamax 16y ago
> I agree we want regulation to be of the second type, but sometimes the first type is the only practical way to do it You're assuming that the benefits of the first type exceed the costs. Regulation is systemic risk. It's also always captured by the politically powerful. > Bureaucratic love-ins aside, regulation doesn't need to fall any heavier on the little guy than the big guy It may not "need to", but it always does. Walmart can always amortize its regulatory burden over more revenue someone else can. And with the savings, they can get special rules and treatment. They get to write the rules. Yes, I know that you have good intentions for regulation, but reality trumps.
- Robin_Message 16y ago
  Addressing this in a slightly different order: > > I agree we want regulation to be of the second type, but sometimes the first type is the only practical way to do it > You're assuming that the benefits of the first type exceed the costs. Yes, that's what I meant when I said "the only practical way to do it." FCC licensing is not prohibitive on innovative, small radio companies, and is hugely beneficial to avoid a tragedy of the commons. > > Bureaucratic love-ins aside, regulation doesn't need to fall any heavier on the little guy than the big guy > It may not "need to", but it always does. Walmart can always amortize its regulatory burden over more revenue someone else can. And with the savings, they can get special rules and treatment. They get to write the rules. Two things: amortizing is unavoidable, but Walmart has more regulatory burden than a corner shop, so it has both more costs and more revenues -- who knows what the ratio is? Often the corner shop avoids regulation costs by getting away with ignoring some of it, which is probably as near to optimal as we can hope to get. Getting to write the rules, we'll get to that. > Yes, I know that you have good intentions for regulation, but reality trumps. The Clean Air Act, the Factories Act, the Child labour laws, clean water acts, the powers that will be used on BP to make them pay for Deepwater, FCC spectrum allocation. Yes it's political, and yes it's messy, and of course special interests get more than their fair say, but those are problems with democracy, not regulation. My intentions are irrelevant, but reality works out pretty well thank you so very much. > Regulation is systemic risk. It's also always captured by the politically powerful. What's your point? "The politically powerful set the rules" is a tautology. The only way I can see you going from here is hardcore Libertarianism, and I don't bother debating that.