4 ms·

There is a move large companies do where after innovating they pull the ladder up behind them by trying to drag regulators into the space. Regulation establishe

There is a move large companies do where after innovating they pull the ladder up behind them by trying to drag regulators into the space. Regulation establishes a moat and allows them to cruise on that innovation until enough external pressure builds up that the dam breaks (people innovating in countries without that regulation for example). I'm not quite sure what the solution is to this by the way. I don't think the answer is no regulation, but how to improve the quality of regulation.

dd36 4y ago
Name a large company that has successfully done that recently?
- f0e4c2f7 4y ago
  Yet to be seen if it will be successful yet but Meta lobbying to congress to trim or eliminate section 230 comes to mind as a recent example.
imnotreallynew 4y ago
Is there any evidence that companies (or rather senior staff at those companies) knowingly do that, or is it simply that once some innovation results in a new, large market, a government tries to get involved?
- akimball 4y ago
  There is a substantial literature documenting regulatory capture in the modern bureaucratic state, but the business model dates back centuries. This is almost like asking for evidence of air.
  - karpierz 4y ago
    I think this is conflating two phenomenon. The parent poster was asking: Do companies push for the creation regulatory bodies to stifle competition? Whereas regulatory capture is the process by which companies shape existing regulatory bodies to serve their interests. But it presumes the existence of a body to regulate them; regulatory capture can't occur if there isn't regulation to start with.
- f0e4c2f7 4y ago
  You make a good point here that it's not obvious if it's the tail wagging or the dog. I suspect it's both. This paper may be interesting further reading on the topic of regulatory moats specifically. (I saw your comment below discussing regulatory capture vs this specific subset of capture.) https://www.nber.org/papers/w26001?sy=001&fbclid=IwAR0oYZBL3CCv9Hrmed6mfgoaLNbgJWrjvHvinchUxV9UElz_pXaxxwQ7Bcs https://www.nber.org/papers/w26001?sy=001&fbclid=IwAR0oYZBL3...

dd36 4y ago

Name a large company that has successfully done that recently?

f0e4c2f7 4y ago
Yet to be seen if it will be successful yet but Meta lobbying to congress to trim or eliminate section 230 comes to mind as a recent example.

imnotreallynew 4y ago

Is there any evidence that companies (or rather senior staff at those companies) knowingly do that, or is it simply that once some innovation results in a new, large market, a government tries to get involved?

akimball 4y ago
There is a substantial literature documenting regulatory capture in the modern bureaucratic state, but the business model dates back centuries. This is almost like asking for evidence of air.
- karpierz 4y ago
  I think this is conflating two phenomenon. The parent poster was asking: Do companies push for the creation regulatory bodies to stifle competition? Whereas regulatory capture is the process by which companies shape existing regulatory bodies to serve their interests. But it presumes the existence of a body to regulate them; regulatory capture can't occur if there isn't regulation to start with.
f0e4c2f7 4y ago
You make a good point here that it's not obvious if it's the tail wagging or the dog. I suspect it's both. This paper may be interesting further reading on the topic of regulatory moats specifically. (I saw your comment below discussing regulatory capture vs this specific subset of capture.) https://www.nber.org/papers/w26001?sy=001&fbclid=IwAR0oYZBL3CCv9Hrmed6mfgoaLNbgJWrjvHvinchUxV9UElz_pXaxxwQ7Bcs https://www.nber.org/papers/w26001?sy=001&fbclid=IwAR0oYZBL3...