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"An unregulated market will spawn entities that provide the services it needs. This includes security and trust. Insurance companies, for example, are entities

"An unregulated market will spawn entities that provide the services it needs. This includes security and trust. Insurance companies, for example, are entities that people trust to protect them against loss. Rating agencies are entities that people trust to provide risk assessment." Do you have any examples from reality where this has happened? Are insurance companies and ratings agencies really trusted agencies that would function even better in an unregulated market? I posit that with no regulation, these entities would become even more unscrupulous than they are now.

hammock 15y ago
Why? The regulations erect great barriers to entry for would-be competitors, solidifying profits of the current market players and allowing them great latitude for slacking off and sub-par performance. We're seeing the same thing now with the money transmitters.
randallsquared 15y ago
Do you have any examples from reality where [an unregulated market spawning entities that provide trusted rating services] has happened? http://en.wikipedia.org/wiki/Underwriters_Laboratories http://en.wikipedia.org/wiki/Underwriters_Laboratories http://en.wikipedia.org/wiki/Consumer_Reports http://en.wikipedia.org/wiki/Consumer_Reports
- tptacek 15y ago
  The question was not whether unregulated markets spawn "trusted rating services". It's whether society could function with private rating services in lieu of regulation.
  - hammock 15y ago
    http://en.wikipedia.org/wiki/Moving_the_goalposts#As_logical_fallacy http://en.wikipedia.org/wiki/Moving_the_goalposts#As_logical... Go back and read your exchange. It looks to me like he answered your question, and you're changing it now.
    - shadowfox 15y ago
      But it does appear that he has a legitimate question (whether it is different from his original question or not)
    - sophacles 15y ago
      Actually, he is not moving goal-posts, he is just asking for the second half of his originally stated question to be answered. I know it is silly, and probably sounds like nitpicking to you, but please, don't make false claims, particularly when they are just veiled ad-hominem.
- nupark2 15y ago
  These are both government regulated non-profits. Compare to the BBB.
olalonde 15y ago
All those work on the principle of trust despite not being regulated: - http://en.wikipedia.org/wiki/Certificate_authority http://en.wikipedia.org/wiki/Certificate_authority - eBay feedbacks - http://www.escrow.com http://www.escrow.com etc. Furthermore, magazines, blogs and retail store all act as rating agencies in some ways. Magazines have a strong incentive to only recommend quality products since their reputation is at stake. The same goes with retail store. They make sure they sell quality product because their reputation is at stake and they don't want to lose business. Of course, the incentive for building those kind of companies is very low given the uncertainty that the government might decide to assume your role, putting you out of business.
- lookofevil 15y ago
  CAs suck and are unaccountable. Any of them can (and many of them have) issue a certificate for a site to an attacker. eBay feedbacks can be gamed and I generally don't trust them. Escrow services work, but they are generally regulated. Your retail store example is laughable. I'm sure Walmart really cares about the quality of its products.
  - olalonde 15y ago
    > CAs suck and are unaccountable. Any of them can (and many of them have) issue a certificate for a site to an attacker. > eBay feedbacks can be gamed and I generally don't trust them. Do you think the government would do a better job at providing CAs or rating eBay sellers? Do you think the government is somehow immune to fraud? > Your retail store example is laughable. I'm sure Walmart really cares about the quality of its products. "I'm sure Walmart customers really care about the quality of products they buy at Walmart." Walmart offers what customers want: cheap prices at the cost of lesser quality. Luckily we are still free to buy low quality products, because the government might "fix that" someday.

hammock 15y ago

Why? The regulations erect great barriers to entry for would-be competitors, solidifying profits of the current market players and allowing them great latitude for slacking off and sub-par performance. We're seeing the same thing now with the money transmitters.

randallsquared 15y ago

Do you have any examples from reality where [an unregulated market spawning entities that provide trusted rating services] has happened? http://en.wikipedia.org/wiki/Underwriters_Laboratories http://en.wikipedia.org/wiki/Underwriters_Laboratories http://en.wikipedia.org/wiki/Consumer_Reports http://en.wikipedia.org/wiki/Consumer_Reports

tptacek 15y ago
The question was not whether unregulated markets spawn "trusted rating services". It's whether society could function with private rating services in lieu of regulation.
- hammock 15y ago
  http://en.wikipedia.org/wiki/Moving_the_goalposts#As_logical_fallacy http://en.wikipedia.org/wiki/Moving_the_goalposts#As_logical... Go back and read your exchange. It looks to me like he answered your question, and you're changing it now.
  - shadowfox 15y ago
    But it does appear that he has a legitimate question (whether it is different from his original question or not)
  - sophacles 15y ago
    Actually, he is not moving goal-posts, he is just asking for the second half of his originally stated question to be answered. I know it is silly, and probably sounds like nitpicking to you, but please, don't make false claims, particularly when they are just veiled ad-hominem.
nupark2 15y ago
These are both government regulated non-profits. Compare to the BBB.

olalonde 15y ago

All those work on the principle of trust despite not being regulated: - http://en.wikipedia.org/wiki/Certificate_authority http://en.wikipedia.org/wiki/Certificate_authority - eBay feedbacks - http://www.escrow.com http://www.escrow.com etc. Furthermore, magazines, blogs and retail store all act as rating agencies in some ways. Magazines have a strong incentive to only recommend quality products since their reputation is at stake. The same goes with retail store. They make sure they sell quality product because their reputation is at stake and they don't want to lose business. Of course, the incentive for building those kind of companies is very low given the uncertainty that the government might decide to assume your role, putting you out of business.

lookofevil 15y ago
CAs suck and are unaccountable. Any of them can (and many of them have) issue a certificate for a site to an attacker. eBay feedbacks can be gamed and I generally don't trust them. Escrow services work, but they are generally regulated. Your retail store example is laughable. I'm sure Walmart really cares about the quality of its products.
- olalonde 15y ago
  > CAs suck and are unaccountable. Any of them can (and many of them have) issue a certificate for a site to an attacker. > eBay feedbacks can be gamed and I generally don't trust them. Do you think the government would do a better job at providing CAs or rating eBay sellers? Do you think the government is somehow immune to fraud? > Your retail store example is laughable. I'm sure Walmart really cares about the quality of its products. "I'm sure Walmart customers really care about the quality of products they buy at Walmart." Walmart offers what customers want: cheap prices at the cost of lesser quality. Luckily we are still free to buy low quality products, because the government might "fix that" someday.