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> Regulatory capture is an economic theory that regulatory agencies may come to be dominated by the interests they regulate and not by the public interest. The
by jaytaylor 5y ago
> Regulatory capture is an economic theory that regulatory agencies may come to be dominated by the interests they regulate and not by the public interest. The result is that the agency instead acts in ways that benefit the interests it is supposed to be regulating.
I'm not sure if I am reading your comment correctly.
Regulatory capture doesn't sound like a desirable thing, and wouldn't do the desired regulating. What did/do you believe the definition is?
- jjkaczor 5y ago>Regulatory capture doesn't sound like a desirable thing It's not a desirable thing for the public - plenty desirable for industry... It worked out pretty well with Ajit Patel and the FCC... Or the CRTC and it's board members and adhoc meetings in bars/pubs with the telecom industry.
- arcticbull 5y agoAjit Pai right? Mr. Reese's Pieces Cup.
- jjkaczor 5y agoSigh - my GoogleFu failed me.
- loldk 5y agoAnd Pharmaceutical Companies and the FDA, and chemical companies like Monsanto and the USDA & FDA. Just to sprinkle a few more examples.
- dumbfoundded 5y agoI'm sorry I wrote my comment quickly but I'll expand and I do think I used "regulatory capture" somewhat correctly. Once an innovative industry gets big enough, the public will want it regulated and the largest companies will regulate it in such a way to stifle competition. It's certainly not a good thing. The stock market, oil/gas, telecommunications are all examples of industries that started as innovative with no regulation. Once established, they were regulated. The stock market got consumer protections. Oil/gas faced environment & safety regulations. Telecommunications face many regulations around zoning and providing rural and not always profitable access. In return, this regulation raised the startup costs so significantly that only the pre-existing large companies could adapt and new entrants effectively ceased to exist. It's a bit of a tradeoff. As consumers, we get some benefits and the company gets their existence & rent guaranteed indefinitely. The same will happen with digital advertising and the gig economy. The public is already getting tired of the wild west and calling for regulation. This regulation will be twisted and controlled by the companies it impacts to secure their future.
- nl 5y ago> It's a bit of a tradeoff. As consumers, we get some benefits and the company gets their existence & rent guaranteed indefinitely. You have misunderstood regulatory capture. Regulatory capture occurs when the regulator puts the interests of those in the industry ahead of consumers. > In return, this regulation raised the startup costs so significantly that only the pre-existing large companies could adapt and new entrants effectively ceased to exist. This isn't regulatory capture. Regulatory capture is things like making laws that it is only possible for incumbents to be licensed to do specific jobs.
- dumbfoundded 5y agoI don't think the world is that simple. Corporations will usually use some consumer benefit that gives them an even greater benefit. I think I'm literally saying the same thing as you but with some nuance added. Companies don't just own the regulators and force them to do whatever they want. Companies justify extremely self interested regulations through the guise of some consumer benefit. For industries emerging from the innovation stage to the regulatory capture state, usually the first regulations increase the startup cost to some extremely high level that only the incumbents can support. Only in the advanced stages to governments grant monopolies to specific companies.
- nl 5y agoThis might be true, but it's not what regulatory capture I'd talking about. That's a very specific term with a specific meaning.