4 ms·

There's something wrong with a notion that a single actor can cause enormous damages, spread them out between community members and suffer no consequences, and

by kova12 5y ago

There's something wrong with a notion that a single actor can cause enormous damages, spread them out between community members and suffer no consequences, and I'm not even talking about only credit companies. For example, take an action which makes everybody spend an hour of their time. Disposing snail mail for example. Lets say there's 300M people in USA. Lets say only 100M of them are affected. Lets also be charitable and say that an hour of their time is worth $10. That's a 1B damage right away. It is a Fukushima level damage. I don't have a solution, but it is disturbing that we allow actors capable of causing such damage just go do their business, take risks, and if risks don't work out - just file for bankruptcy and suffer essentially no consequences

AnthonyMouse 5y ago
The underlying problem is that people are capable of causing more damages than they can cover. If you cause a billion dollars in damages, but you don't have a billion dollars, who pays? Not you, for sure, because you can't. Some of these have decent solutions. We want people to recycle aluminum cans, so we have a deposit which you get back when you take the can to the recycling machine. If you're too lazy to do that, now it's a means for the homeless to make a buck, you don't get your deposit back, and the cans still get recycled. For other things the solution isn't obvious. You could require anyone who wants to operate in these industries to post a massive bond of their own money to pay the claims if there are any, but that's just asking for market consolidation. You end up with an abusive monopoly or possibly even nobody willing to offer a product in the market at all. The cure is worse than the disease. In some sense what you need is the opposite. If there are a thousand competitors then there is no one company who can breach a hundred million users. Moreover, there is plenty of competition, so companies that get breached have to worry about reputational harm and customers switching to a competitor. Then you would expect the companies with good long-term records to take over. And then we're back to the problem with credit reporting agencies. The problem is that the victim has no way to opt out of the system. One solid solution would be to eliminate social security numbers whatsoever and otherwise put them out of business. The entire credit system is just a zero-sum bidding war anyway. Making it harder for everyone to get credit only reduces the bidding war for housing and makes it more affordable to everyone.

by kova12 5y ago

AnthonyMouse 5y ago

The underlying problem is that people are capable of causing more damages than they can cover. If you cause a billion dollars in damages, but you don't have a billion dollars, who pays? Not you, for sure, because you can't. Some of these have decent solutions. We want people to recycle aluminum cans, so we have a deposit which you get back when you take the can to the recycling machine. If you're too lazy to do that, now it's a means for the homeless to make a buck, you don't get your deposit back, and the cans still get recycled. For other things the solution isn't obvious. You could require anyone who wants to operate in these industries to post a massive bond of their own money to pay the claims if there are any, but that's just asking for market consolidation. You end up with an abusive monopoly or possibly even nobody willing to offer a product in the market at all. The cure is worse than the disease. In some sense what you need is the opposite. If there are a thousand competitors then there is no one company who can breach a hundred million users. Moreover, there is plenty of competition, so companies that get breached have to worry about reputational harm and customers switching to a competitor. Then you would expect the companies with good long-term records to take over. And then we're back to the problem with credit reporting agencies. The problem is that the victim has no way to opt out of the system. One solid solution would be to eliminate social security numbers whatsoever and otherwise put them out of business. The entire credit system is just a zero-sum bidding war anyway. Making it harder for everyone to get credit only reduces the bidding war for housing and makes it more affordable to everyone.