7 ms·

This is why the idea that we can trust the market to regulate itself is completely ridiculous.

by sickcodebruh 7y ago

atian 7y ago
The market decided that data breaches are not worth anything.
- mostlysimilar 7y ago
  The market has no other options.
- rolltiide 7y ago
  The data is worth a lot But not a cost or negative consequence to the organization that the data came from
  - nickpsecurity 7y ago
    The revenue that Equifax makes selling it further corroborates your position.
- souterrain 7y ago
  Those whose data was compromised are not equal participants in said “market”.
- paulkon 7y ago
  The financial markets are for businesses, not people.
  - deleted 7y ago
    [deleted]
- haberman 7y ago
  The market relies on a sensible legal framework of ownership and liability. Society has to decide under what circumstances a person or business can be financially liable for their mistakes. The liability should match the real-world harm. Data breaches have significant real-world harm. Unfortunately Equifax got out of this without paying fines in several state at least. It was the regulators who failed us here, not the market: https://www.reuters.com/article/us-equifax-states-agreement/equifax-avoids-fines-in-deal-with-u-s-states-over-data-breach-idUSKBN1JN2YH https://www.reuters.com/article/us-equifax-states-agreement/... Customer data should be like radioactive waste. Companies should know that if they have it, they have to take appropriate measures to secure it, and if they don't they will take a significant financial hit. The financial penalties should be significant enough that if a business doesn't feel sure they can invest into proper security, it makes more sense to just not keep the user data.
  - rectang 7y ago
    > It was the regulators who failed us here, not the market On the contrary: the credit reporting industry is a perfect example of market failure thanks to regulatory capture. The actors in the market exercise a high degree of control over the regulators. The regulators are not independent and the companies that influence them are not innocent. All markets are constructed. The credit reporting market is just set up with rules which are grossly harmful to individuals.
    - haberman 7y ago
      I don't think Equifax is innocent, I believe they should be liable for the damage they caused. Regulators answer to the people, it is their job to act in our interest and our job to hold them accountable to this.
      - rectang 7y ago
        We're mostly on the same page, but here's my quibble: you hold Equifax responsible "for the damage they caused" but not for their role in corrupting the regulatory regime. Regulators should answer to the people, but because corporations are extremely motivated, fabulously wealthy, and privileged by the court system, the people have to compete for the regulators' attentions. I think it makes sense to acknowledge that Equifax is acting against the common good, even if that's just incidental to Equifax acting in its own interests.
- danShumway 7y ago
  In the market's defense, from a certain perspective it was right. There are no significant regulatory penalties coming at Equifax over this (the biggest change is that credit freezes are now free, which is great win but won't have a huge market impact). Additionally, consumers can't choose not to participate in this process. I mean, if you're wealthy, you can choose not to buy anything on credit, and if you're tech savvy you can choose to freeze your credit with Equifax and force the majority of your traffic through other companies. But again, that's not the majority of the population and it's not going to have much of an effect. Businesses aren't going to stop relying on social security numbers and background checks, because... well, for a lot of reasons, but partially because that system is really entrenched and it would take more than leaking half of the US population's data to make it change. That's going to be a very, very hard battle to win. In the meantime, that just means its even harder for consumers to avoid businesses that rely on Equifax for credit checks. So, the market determined that consumers were not going to change their behaviors over this breach, in part because there aren't a lot of reasonable ways for consumers to do anything. It determined that Equifax wasn't likely to be harmed in the long term by the government, and it determined businesses weren't going to change their behavior around identity verification -- and it priced itself accordingly. If you want the market to punish bad actors, you have to give consumers and people effected by the market agency to move their business or to choose not to participate in systems they don't like. Current credit systems just don't give ordinary consumers that kind of agency. This also pops up in privacy debates sometimes where people say, "oh, people don't care." That's sometimes true, but it's generally really complicated -- and part of the reason it's complicated is because consumers have been taught over and over that there is no point to caring and nothing they do is going to stop companies from tracking them.
rossdavidh 7y ago
I'm fairly libertarian, but I have to agree. No system does everything, and that clearly includes the market. It's almost a Godel-style limitation; no system can do everything. The market can do a lot, but it can't do everything. Ergo, you need a system to do what it can't. Insuring attention to things like security is clearly one of those things.
- allthecybers 7y ago
  I think this is the tension for me in trying to embrace a fully libertarian mindset. When companies in their blind allegiance to producing shareholder value and conducting profitable free enterprise perpetuate harm upon consumers, what does the free market do with that?
  - rectang 7y ago
    For me, the sweet spot lies in acknowledging that both market failure and regulatory overreach are harmful. Unregulated markets lead to a Hobbesian world dominated by a succession of monopolies, just like markets controlled through central planning. Markets with true competition can only be sustained through continuing struggle, because companies hate competition and constantly innovate new ways to capture the regulators. The best we can do is regulators who retain their humility and exercise a light touch.
  - noob_slayer 7y ago
    Any business transacting in dollars is not going to be a free enterprise in a free market.
  - gwright 7y ago
    The devil is in the details, but if there is an agreement about what defines "harm", then the libertarian remedy would be civil or criminal liability for that harm.
    - ionised 7y ago
      And who enforces that civil or criminal liability?

This is why the idea that we can trust the market to regulate itself is completely ridiculous.

atian 7y ago

The market decided that data breaches are not worth anything.

mostlysimilar 7y ago
The market has no other options.
rolltiide 7y ago
The data is worth a lot But not a cost or negative consequence to the organization that the data came from
- nickpsecurity 7y ago
  The revenue that Equifax makes selling it further corroborates your position.
souterrain 7y ago
Those whose data was compromised are not equal participants in said “market”.
paulkon 7y ago
The financial markets are for businesses, not people.
- deleted 7y ago
  [deleted]
haberman 7y ago
The market relies on a sensible legal framework of ownership and liability. Society has to decide under what circumstances a person or business can be financially liable for their mistakes. The liability should match the real-world harm. Data breaches have significant real-world harm. Unfortunately Equifax got out of this without paying fines in several state at least. It was the regulators who failed us here, not the market: https://www.reuters.com/article/us-equifax-states-agreement/equifax-avoids-fines-in-deal-with-u-s-states-over-data-breach-idUSKBN1JN2YH https://www.reuters.com/article/us-equifax-states-agreement/... Customer data should be like radioactive waste. Companies should know that if they have it, they have to take appropriate measures to secure it, and if they don't they will take a significant financial hit. The financial penalties should be significant enough that if a business doesn't feel sure they can invest into proper security, it makes more sense to just not keep the user data.
- rectang 7y ago
  > It was the regulators who failed us here, not the market On the contrary: the credit reporting industry is a perfect example of market failure thanks to regulatory capture. The actors in the market exercise a high degree of control over the regulators. The regulators are not independent and the companies that influence them are not innocent. All markets are constructed. The credit reporting market is just set up with rules which are grossly harmful to individuals.
  - haberman 7y ago
    I don't think Equifax is innocent, I believe they should be liable for the damage they caused. Regulators answer to the people, it is their job to act in our interest and our job to hold them accountable to this.
    - rectang 7y ago
      We're mostly on the same page, but here's my quibble: you hold Equifax responsible "for the damage they caused" but not for their role in corrupting the regulatory regime. Regulators should answer to the people, but because corporations are extremely motivated, fabulously wealthy, and privileged by the court system, the people have to compete for the regulators' attentions. I think it makes sense to acknowledge that Equifax is acting against the common good, even if that's just incidental to Equifax acting in its own interests.
danShumway 7y ago
In the market's defense, from a certain perspective it was right. There are no significant regulatory penalties coming at Equifax over this (the biggest change is that credit freezes are now free, which is great win but won't have a huge market impact). Additionally, consumers can't choose not to participate in this process. I mean, if you're wealthy, you can choose not to buy anything on credit, and if you're tech savvy you can choose to freeze your credit with Equifax and force the majority of your traffic through other companies. But again, that's not the majority of the population and it's not going to have much of an effect. Businesses aren't going to stop relying on social security numbers and background checks, because... well, for a lot of reasons, but partially because that system is really entrenched and it would take more than leaking half of the US population's data to make it change. That's going to be a very, very hard battle to win. In the meantime, that just means its even harder for consumers to avoid businesses that rely on Equifax for credit checks. So, the market determined that consumers were not going to change their behaviors over this breach, in part because there aren't a lot of reasonable ways for consumers to do anything. It determined that Equifax wasn't likely to be harmed in the long term by the government, and it determined businesses weren't going to change their behavior around identity verification -- and it priced itself accordingly. If you want the market to punish bad actors, you have to give consumers and people effected by the market agency to move their business or to choose not to participate in systems they don't like. Current credit systems just don't give ordinary consumers that kind of agency. This also pops up in privacy debates sometimes where people say, "oh, people don't care." That's sometimes true, but it's generally really complicated -- and part of the reason it's complicated is because consumers have been taught over and over that there is no point to caring and nothing they do is going to stop companies from tracking them.

rossdavidh 7y ago

I'm fairly libertarian, but I have to agree. No system does everything, and that clearly includes the market. It's almost a Godel-style limitation; no system can do everything. The market can do a lot, but it can't do everything. Ergo, you need a system to do what it can't. Insuring attention to things like security is clearly one of those things.

allthecybers 7y ago
I think this is the tension for me in trying to embrace a fully libertarian mindset. When companies in their blind allegiance to producing shareholder value and conducting profitable free enterprise perpetuate harm upon consumers, what does the free market do with that?
- rectang 7y ago
  For me, the sweet spot lies in acknowledging that both market failure and regulatory overreach are harmful. Unregulated markets lead to a Hobbesian world dominated by a succession of monopolies, just like markets controlled through central planning. Markets with true competition can only be sustained through continuing struggle, because companies hate competition and constantly innovate new ways to capture the regulators. The best we can do is regulators who retain their humility and exercise a light touch.
- noob_slayer 7y ago
  Any business transacting in dollars is not going to be a free enterprise in a free market.
- gwright 7y ago
  The devil is in the details, but if there is an agreement about what defines "harm", then the libertarian remedy would be civil or criminal liability for that harm.
  - ionised 7y ago
    And who enforces that civil or criminal liability?