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It smells like regulatory capture whenever the barrier to entry is set to a point where it's almost impossible for small players to enter the market. For this

by skohan 6y ago

It smells like regulatory capture whenever the barrier to entry is set to a point where it's almost impossible for small players to enter the market. For this reason I think it makes sense to have a cutoff (or maybe several) for businesses under a certain size to operate in a lazies-faire environment with only the essential regulations to be accountable to. Regulation of business is important in a lot of cases, but if you really want to encourage innovation you need to carve out a space where people can grow up to the point where they can really contend with all that complexity.

tastyfreeze 6y ago
I like this idea. But, what I see happening with this structure is businesses growing up to the cut off and not taking any further measures to grow. For some businesses that will be just fine. Not everybody wants to grow a multi-million dollar business. For those that do want to grow this becomes something like the welfare cliff.
- bitcurious 6y ago
  Unlike taxes/benefits, I don’t think you could scale regulations linearly - at some point there has to be a cliff. I wonder if a solution could be a time-offset cliff. I.e. regulations apply five years after hitting a revenue threshold, at which point you either grow past the cliff or fall under it.
  - tastyfreeze 6y ago
    An alternative is changing requirements to recommendations allowing businesses to compete on equal ground. The recommendations become a guide to making a consumer friendly business. Let the business decide if they want to implement recommendations to reach a broader market. Some requirements, that protect the commons, are necessary. Things like "you can't dump gasoline in a river". Requirements necessitate enforcement which costs the citizens money and compliance which costs businesses money. Money that could be put back into the economy instead of evaporating in the government machine.
- gowld 6y ago
  So? It takes a billion dollars of funding to get an IPO, but it is still extremely popular. A business is not like a single employee. Anyway, its simple if have regulations step up with growth over many small steps, as they already do today.
Leherenn 6y ago
I'm not sure it's regulatory capture. I'd say most of the times it's death by a thousand cuts. You have a place that has obvious hygiene issues, e.g. only one sink and everything is done there. Then some people got sick because that place was just careless. Now you have people clamouring "how could this happen?" "something must be done!" and a new regulation is put in place, and in isolation, it's not necessarily stupid. Repeat this many times, and you have the situation s people are talking about here.
- gowld 6y ago
  The existence of the TSA disproves this theory. The public didn't clamor for 1000 rules. The bureaucracy is self perpetuating and captures by special interests.

by skohan 6y ago

tastyfreeze 6y ago

I like this idea. But, what I see happening with this structure is businesses growing up to the cut off and not taking any further measures to grow. For some businesses that will be just fine. Not everybody wants to grow a multi-million dollar business. For those that do want to grow this becomes something like the welfare cliff.

bitcurious 6y ago
Unlike taxes/benefits, I don’t think you could scale regulations linearly - at some point there has to be a cliff. I wonder if a solution could be a time-offset cliff. I.e. regulations apply five years after hitting a revenue threshold, at which point you either grow past the cliff or fall under it.
- tastyfreeze 6y ago
  An alternative is changing requirements to recommendations allowing businesses to compete on equal ground. The recommendations become a guide to making a consumer friendly business. Let the business decide if they want to implement recommendations to reach a broader market. Some requirements, that protect the commons, are necessary. Things like "you can't dump gasoline in a river". Requirements necessitate enforcement which costs the citizens money and compliance which costs businesses money. Money that could be put back into the economy instead of evaporating in the government machine.
gowld 6y ago
So? It takes a billion dollars of funding to get an IPO, but it is still extremely popular. A business is not like a single employee. Anyway, its simple if have regulations step up with growth over many small steps, as they already do today.

Leherenn 6y ago

I'm not sure it's regulatory capture. I'd say most of the times it's death by a thousand cuts. You have a place that has obvious hygiene issues, e.g. only one sink and everything is done there. Then some people got sick because that place was just careless. Now you have people clamouring "how could this happen?" "something must be done!" and a new regulation is put in place, and in isolation, it's not necessarily stupid. Repeat this many times, and you have the situation s people are talking about here.

gowld 6y ago
The existence of the TSA disproves this theory. The public didn't clamor for 1000 rules. The bureaucracy is self perpetuating and captures by special interests.