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On one hand yes, on the other the company wouldn't exist. Regulators are important, but they also serve incumbent interests as they raise the barrier to entry f
by eloff 7y ago
On one hand yes, on the other the company wouldn't exist. Regulators are important, but they also serve incumbent interests as they raise the barrier to entry for newcomers. It's a way to pull the ladder up behind you once you've achieved success. I don't know how we can better balance those seemingly conflicting aspects.
- Benjammer 7y agoI can never really understand this argument. Why can't we carefully craft regulations to scale in their burden with the company's ability to bear said burden in some way? Scale with revenue or head count numbers? Similar to how income at the lowest bracket isn't taxed, to lessen the burden on people much less able to pay.
- jdbernard 7y agoWe can, but usually it's the established encumbents who are helping draft the language of the legislation (which is better than politicians with no expertise working alone) and they are not incentived to encourage the kind of regulation you propose.
- taneq 7y agoBecause (a) then you'd end up with things like pacemakers designed by sole operators because their regulatory burden would be that much lower than what a biomedical engineering firm would face, and (b) any such system would be trivial to game anyway.
- eloff 7y agoI like this idea a lot. We don't currently do this, but it would get most of the benefits without most of the downside. Seems like a win.
- slg 7y ago> Regulators are important, but they also serve incumbent interests as they raise the barrier to entry for newcomers. Call me crazy, but when it comes to products that could so easily cause death, a barrier to entry is a good thing.
- missosoup 7y agoAaaaand that's why Americans need to pay 500 bucks for an insulin injector pen while Indians pay 10 bucks for the same device. The problem with regulatory capture and arguing it's a good thing, is that there's a downside/cost to the barrier it creates. And often that downside outweighs the upside. To be clear, no one is arguing regulation shouldn't exist. Just that the nature of regulation is to be captured by incumbents and serve a purpose orthogonal to protecting the people.
- slg 7y agoI didn't say regulatory capture is a good thing. I said that barriers to entry can be good in certain instances. In the instance of medical devices, the problem in the US has nothing to do with barriers to entry. If you can drive across the border to Canada and buy an identical product for a fraction of the price it would cost in the US, that isn't because the barrier to entry is too high in the US. The product already exists and is being produced, it just costs more due to a broken healthcare industry.
- missosoup 7y agoNo, Americans are paying 500 bucks for a pen precisely because of regulatory capture. None of the manufacturers of the cheaper version have been successful in jumping the regulatory barrier to entry which the incumbents lobbied for, and tens of thousands of Americans suffer for it each year.
- bildung 7y agoI have a hard time believing e.g. most european countries have less regulation in the medical sector than the US. Probably less corruption/"lobbying" (because corporate campaign distribitions are more strictly regulated in most other countries), but corruption quite different from regulation, even if both affect how law gets written.
- throwaway100773 7y ago