4 ms·

Seems like the regulatory bodies don’t actually function to protect the consumer, but rather to protect the interests of the corporations that lobby. A good exa

Seems like the regulatory bodies don’t actually function to protect the consumer, but rather to protect the interests of the corporations that lobby. A good example of this is the telecom industry.

deleted 7y ago
[deleted]
maximente 7y ago
regulatory capture is often just a rational response from a corporation once it gets to a certain size. the value add of $1 dollar of lobbying/capture efforts goes farther than $1 in R&D or whatever after a certain point. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
- rayiner 7y ago
  If that was true, companies wouldn’t spend so much on R&D and so little on lobbying. Boeing is one of the top lobbying companies. Last year it spent $15 million on lobbying. It spent $5 billion on R&D. (It probably spent more on office entertainment, Christmas parties, retirement parties, etc., than lobbying.)
  - maximente 7y ago
    that's a good point. i should have said that at a certain size it makes sense for a corporation to "invest" in lobbying as a form of increasing profits instead of, say, using that amount to increase R&D. it may be that the required amount of lobbying money necessary for a larger corp is in relative terms tiny but in absolute terms somewhat large (e.g. $15mil gets you 80% of the way there, whereas $150mil only 85%; but a smaller corp can't chalk up the $15mil required for pareto or whatever distribution)
  - dredmorbius 7y ago
    Diminishing returns. You only need to buy so many legislators, and there's only so much competition. What stats you got for ROI on aerospace R&D vs. lobbying?
    - rayiner 7y ago
      That’s not how economics works. Legislators are a scarce resource. If owning them results in a high ROI, then the price would be bid up.
      - dredmorbius 7y ago
        It's very much how special-interest economics works. Boeing is effectively a monopoly, its counterparty interest is the public at large, who are too diffuse to counter it. Mancur Olsen, The Logic of Collective Action. Seminal economics text. https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action https://www.worldcat.org/title/logic-of-collective-action-public-goods-and-the-theory-groups/oclc/802129775 https://www.worldcat.org/title/logic-of-collective-action-pu...
        rayiner 7y ago
        Boeing does a ton of defense contracting. Why is the counter party not Lockheed, Rockwell, etc? Also, companies don’t need to be direct competitors to have adverse interests. For example, Google lobbied heavily on copyright issues because it wants to commoditize a downstream product input to its own services. That places Google at odds with media companies, even though the companies don’t compete directly.
        dredmorbius 7y ago
        In civil aviation, Boeing has no domestic competition, though it may oppose competing transport modes such as high-speed rail. (I don't know that it has, though other avaiation interests, famously Southwest Airlines, have.) In defence, Beoing and other MIC firms are generally better served by fighting for a larger pie, than over their share of it. The fight is over defence vs. nondefence (mostly social services) spending. See for example; https://www.sourcewatch.org/index.php/Boeing https://www.sourcewatch.org/index.php/Boeing And I'd asked what your data are. Got any, or do you prefer asking to answering questions?
  - BurningFrog 7y ago
    1. I really appreciate when people try reality check claims. Thanks! 2. I have to think that a lot more money and effort is expended trying to influence regulations than what shows up in the formal lobbying accounting. One thing companies do is make sure to have major employment centers in as many states and congressional districts as possible, in order to get a good base of votes in any matters that may come up. This must cost a fair amount, but would never show up in the lobbying budget. Just as an example.
  - Der_Einzige 7y ago
    Books are cooked and I'm sure that Boeing spent more on "lobbying" or "lobbying and backroom deals" than 15 million. Id expect a difference of at least a factor of 10 but it's not easy to prove as they have a vested interest to keep that money out of the public eye.

Seems like the regulatory bodies don’t actually function to protect the consumer, but rather to protect the interests of the corporations that lobby. A good example of this is the telecom industry.

deleted 7y ago

[deleted]

maximente 7y ago

regulatory capture is often just a rational response from a corporation once it gets to a certain size. the value add of $1 dollar of lobbying/capture efforts goes farther than $1 in R&D or whatever after a certain point. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture

rayiner 7y ago
If that was true, companies wouldn’t spend so much on R&D and so little on lobbying. Boeing is one of the top lobbying companies. Last year it spent $15 million on lobbying. It spent $5 billion on R&D. (It probably spent more on office entertainment, Christmas parties, retirement parties, etc., than lobbying.)
- maximente 7y ago
  that's a good point. i should have said that at a certain size it makes sense for a corporation to "invest" in lobbying as a form of increasing profits instead of, say, using that amount to increase R&D. it may be that the required amount of lobbying money necessary for a larger corp is in relative terms tiny but in absolute terms somewhat large (e.g. $15mil gets you 80% of the way there, whereas $150mil only 85%; but a smaller corp can't chalk up the $15mil required for pareto or whatever distribution)
- dredmorbius 7y ago
  Diminishing returns. You only need to buy so many legislators, and there's only so much competition. What stats you got for ROI on aerospace R&D vs. lobbying?
  - rayiner 7y ago
    That’s not how economics works. Legislators are a scarce resource. If owning them results in a high ROI, then the price would be bid up.
    - dredmorbius 7y ago
      It's very much how special-interest economics works. Boeing is effectively a monopoly, its counterparty interest is the public at large, who are too diffuse to counter it. Mancur Olsen, The Logic of Collective Action. Seminal economics text. https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action https://www.worldcat.org/title/logic-of-collective-action-public-goods-and-the-theory-groups/oclc/802129775 https://www.worldcat.org/title/logic-of-collective-action-pu...
      - rayiner 7y ago
        Boeing does a ton of defense contracting. Why is the counter party not Lockheed, Rockwell, etc? Also, companies don’t need to be direct competitors to have adverse interests. For example, Google lobbied heavily on copyright issues because it wants to commoditize a downstream product input to its own services. That places Google at odds with media companies, even though the companies don’t compete directly.
        dredmorbius 7y ago
        In civil aviation, Boeing has no domestic competition, though it may oppose competing transport modes such as high-speed rail. (I don't know that it has, though other avaiation interests, famously Southwest Airlines, have.) In defence, Beoing and other MIC firms are generally better served by fighting for a larger pie, than over their share of it. The fight is over defence vs. nondefence (mostly social services) spending. See for example; https://www.sourcewatch.org/index.php/Boeing https://www.sourcewatch.org/index.php/Boeing And I'd asked what your data are. Got any, or do you prefer asking to answering questions?
- BurningFrog 7y ago
  1. I really appreciate when people try reality check claims. Thanks! 2. I have to think that a lot more money and effort is expended trying to influence regulations than what shows up in the formal lobbying accounting. One thing companies do is make sure to have major employment centers in as many states and congressional districts as possible, in order to get a good base of votes in any matters that may come up. This must cost a fair amount, but would never show up in the lobbying budget. Just as an example.
- Der_Einzige 7y ago
  Books are cooked and I'm sure that Boeing spent more on "lobbying" or "lobbying and backroom deals" than 15 million. Id expect a difference of at least a factor of 10 but it's not easy to prove as they have a vested interest to keep that money out of the public eye.