4 ms·

When it's out of alignment, usually it's because of regulatory capture.

by billytetrud 5y ago

triceratops 5y ago
Not always. Tobacco generated enormous profits even when there was no regulatory heat on it.
- billytetrud 5y ago
  You're correct, usually is not always. But also, that's not what I meant. I meant that when companies can make profits without creating more value to society than the profits they make, its generally because of regulatory capture that allows them to extract rents from their customers or push costs onto the people as externalities. Regulatory capture is where companies "capture" the regulatory framework and use it to their advantage. So regulatory capture is actually the opposite of "regulatory heat".
  - triceratops 5y ago
    I understood what you meant by "regulatory capture". I was implying that capture often happens when there's regulatory heat.
tablespoon 5y ago
> When it's out of alignment, usually it's because of regulatory capture. No. The GGP's examples are a direct counterexample to that idea. Being a little more general: based on past experience, I interpret general complaints about "regulatory capture" without further clarification as complaints about regulation in general and advocacy for "market solutions" as an alternative. However, a poorly regulated market will almost certainly result in a great many monopolies and businesses that convert some negative externality into private profit, which are the apotheosis of the idea that financial value != value to society.
- billytetrud 5y ago
  Sorry, what is GGP? What counter examples? > a poorly regulated market will almost certainly result in a great many monopolies A market regulated in poorly thought through ways can certainly lead to monopolies. But monopolies specifically are almost entirely due to regulatory capture. Case in point internet service in the US is almost always given either a de facto monpoloy or a straight up legislated monopoly for a particular area. That's why internet service in the US sucks so much. Countless regulatory burdens on businesses are designed to favor large companies, and is one of the many regulatory reasons that companies merge so often and industries in the US are oligopolies. And that's not to mention the actual government run monopolies like utilities and the post office. It was despicable that the post office killed Outbox and prevents people from using their own mailboxes however they want. https://smallbiztrends.com/2014/05/usps-killed-outbox-mail.html https://smallbiztrends.com/2014/05/usps-killed-outbox-mail.h... If the US had good representation, maybe the regulations it creates would generally benefit the consumer rather than entrenched business interests. Unfortuantely, that's not really the case today.

When it's out of alignment, usually it's because of regulatory capture.

triceratops 5y ago

Not always. Tobacco generated enormous profits even when there was no regulatory heat on it.

billytetrud 5y ago
You're correct, usually is not always. But also, that's not what I meant. I meant that when companies can make profits without creating more value to society than the profits they make, its generally because of regulatory capture that allows them to extract rents from their customers or push costs onto the people as externalities. Regulatory capture is where companies "capture" the regulatory framework and use it to their advantage. So regulatory capture is actually the opposite of "regulatory heat".
- triceratops 5y ago
  I understood what you meant by "regulatory capture". I was implying that capture often happens when there's regulatory heat.

tablespoon 5y ago

> When it's out of alignment, usually it's because of regulatory capture. No. The GGP's examples are a direct counterexample to that idea. Being a little more general: based on past experience, I interpret general complaints about "regulatory capture" without further clarification as complaints about regulation in general and advocacy for "market solutions" as an alternative. However, a poorly regulated market will almost certainly result in a great many monopolies and businesses that convert some negative externality into private profit, which are the apotheosis of the idea that financial value != value to society.

billytetrud 5y ago
Sorry, what is GGP? What counter examples? > a poorly regulated market will almost certainly result in a great many monopolies A market regulated in poorly thought through ways can certainly lead to monopolies. But monopolies specifically are almost entirely due to regulatory capture. Case in point internet service in the US is almost always given either a de facto monpoloy or a straight up legislated monopoly for a particular area. That's why internet service in the US sucks so much. Countless regulatory burdens on businesses are designed to favor large companies, and is one of the many regulatory reasons that companies merge so often and industries in the US are oligopolies. And that's not to mention the actual government run monopolies like utilities and the post office. It was despicable that the post office killed Outbox and prevents people from using their own mailboxes however they want. https://smallbiztrends.com/2014/05/usps-killed-outbox-mail.html https://smallbiztrends.com/2014/05/usps-killed-outbox-mail.h... If the US had good representation, maybe the regulations it creates would generally benefit the consumer rather than entrenched business interests. Unfortuantely, that's not really the case today.