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> Not saying I have an answer The answer must involve making the risks outweigh the benefits, through both an increased probability of being caught and a highe

> Not saying I have an answer The answer must involve making the risks outweigh the benefits, through both an increased probability of being caught and a higher level of punishment.

lordnacho 8y ago
That's the target, but how do you reach it without creating more issues? Say you have a stringent approval process run by a government agency. Well that takes time. If the product actually works fine you've lost out on the benefits in the meantime.
- wongarsu 8y ago
  You can get most of the benefit by testing the product after it hits the market and hit those found harmful with high punishments. Bonus points if not just the company is liable but someone in higher management can be personally held liable. Testing before it hits the market is safer, but giving compliance departments enough incentive to care gets you 95% of the way.
  - pmichaud 8y ago
    One thing I am confused about (maybe more like suspicious about) is why fines for stuff like this aren't more onerous. There are lots of businesses that just factor in the cost of the fines which are way less than the total margin. If I were designing regulations like this, and I actually had the goal of curtailing this sort of behavior, the fines would be tied to the total revenue of the product, like (total revenue + capital gains) * 1.25 (where the .25 is the punitive fine %) That way there's no business tradeoff except "if we get caught, we're fucked". Like, in this situation the fine would be all the revenue ever made with the product for 40 years, and whatever interest they could reasonably calculate, times some proportional punitive amount. J&J would maybe be looking at a bankruptcy for it. It may be too much, but I'd also be tempted to look into criminal charges for anyone with fiduciary responsibility related to the breach. So like the people who were directly responsible are charged criminally, but also their manager, and that person's manager, and so on up to the CEO. If line workers doing shady things could blow back into jail time for CEOs, certainly CEOs would be way more interested in making certain that everything was on the up and up. Just build in corrective procedures like a window for disclosure to law enforcement or regulators if something shady is discovered internally, to give the company a chance to correct the situation if there's a rogue actor or whatever. I know the idea is impractical in a variety of ways, and as a person who has run organizations of various sizes it scares me to contemplate because I know first hand that people just do dumb shit sometimes and I can't always stop it. But the incentives do feel too far the "it's easy and profitable to get away with" side.
ajross 8y ago
Which is why we have the class action law suit and whistleblower protection statutes. (Both of which, sadly, seem to have become partisan issues in the modern world...)

> Not saying I have an answer The answer must involve making the risks outweigh the benefits, through both an increased probability of being caught and a higher level of punishment.

lordnacho 8y ago

That's the target, but how do you reach it without creating more issues? Say you have a stringent approval process run by a government agency. Well that takes time. If the product actually works fine you've lost out on the benefits in the meantime.

wongarsu 8y ago
You can get most of the benefit by testing the product after it hits the market and hit those found harmful with high punishments. Bonus points if not just the company is liable but someone in higher management can be personally held liable. Testing before it hits the market is safer, but giving compliance departments enough incentive to care gets you 95% of the way.
- pmichaud 8y ago
  One thing I am confused about (maybe more like suspicious about) is why fines for stuff like this aren't more onerous. There are lots of businesses that just factor in the cost of the fines which are way less than the total margin. If I were designing regulations like this, and I actually had the goal of curtailing this sort of behavior, the fines would be tied to the total revenue of the product, like (total revenue + capital gains) * 1.25 (where the .25 is the punitive fine %) That way there's no business tradeoff except "if we get caught, we're fucked". Like, in this situation the fine would be all the revenue ever made with the product for 40 years, and whatever interest they could reasonably calculate, times some proportional punitive amount. J&J would maybe be looking at a bankruptcy for it. It may be too much, but I'd also be tempted to look into criminal charges for anyone with fiduciary responsibility related to the breach. So like the people who were directly responsible are charged criminally, but also their manager, and that person's manager, and so on up to the CEO. If line workers doing shady things could blow back into jail time for CEOs, certainly CEOs would be way more interested in making certain that everything was on the up and up. Just build in corrective procedures like a window for disclosure to law enforcement or regulators if something shady is discovered internally, to give the company a chance to correct the situation if there's a rogue actor or whatever. I know the idea is impractical in a variety of ways, and as a person who has run organizations of various sizes it scares me to contemplate because I know first hand that people just do dumb shit sometimes and I can't always stop it. But the incentives do feel too far the "it's easy and profitable to get away with" side.

ajross 8y ago

Which is why we have the class action law suit and whistleblower protection statutes. (Both of which, sadly, seem to have become partisan issues in the modern world...)