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> A rational actor would only engage in the behavior of their expected gain was larger than the expected cost to society. This is - bluntly put - a shite fucki

> A rational actor would only engage in the behavior of their expected gain was larger than the expected cost to society. This is - bluntly put - a shite fucking idea. I am not trying to "maximize total welfare" where one way to accomplish that is to allow a bad actor to get ridiculously wealthy at the expense of everyone else (even if the total paid by everyone else is less than the bad actor makes). We have a term for this: Privatized profits and socialized losses. We're witnessing that this mindset is completely dysfunctional. It allows bad actors to accumulate immense wealth through behaviors that are net negatives for all other participants - further, those bad actors can then use that wealth to avoid or offset the share of their social costs that should be paid (ex: lobbying politicians, paying off regulators, bribing judges, etc) ---- There is a reason most people don't accept a deal where both parties gain, but one gains at a heavy advantage over the other: We know that allowing this behavior is bad for long term social stability, and we have all sorts of ideas about "Fair" that we apply to stop it: https://www.sciencedirect.com/topics/neuroscience/ultimatum-game https://www.sciencedirect.com/topics/neuroscience/ultimatum-... > The firms profit should be irrelevant in my opinion. But make these firms believe that they will have to cover the true costs of their behavior! The profit is the ONLY FUCKING THING that is relevant. The firms don't care about "true costs" (which, as an aside are often impossible to reasonably calculate). All the firms cares about is "Does bad behavior A lead to more net money, or less net money?" As long as the answer is "More net money" The firm is going to engage in bad behavior. The answer ALWAYS needs to be: Fine the bad behavior until it is not profitable. Full fucking stop.

manoDev 3y ago
IMO, all that is necessary is the law strongly backing personal liability of C-level in all industries. Trying to penalize companies never works in practice, regulators CANT let large companies going bankrupt, cascading defaults of creditors, creating unemployment, etc. It never happens. Also, this penalizes the workers the most. Once psychopaths have certainty of personal consequences they will want to stay away from executive positions.
- horsawlarway 3y ago
  There is too strong an incentive to assign fall men to positions of "public responsibility" and then operate behind them at will (profitably). I'd maybe be in favor of a law that demanded that fines be paid in equity of the company (starting with equity held by the C-level officers and board) at a steep discount on market price (say... 50% valuation). Engage in enough bad behavior and you become nationalized over time, and then the public can decide what to do with the result.
- hedora 3y ago
  Regulators definitely could let large companies go bankrupt. They’d seize 100% of the stock and cancel any exit packages, then fire the board, and CEO, and claw back any remaining fines from the personal accounts and garnished wages of the executives responsible for the problem. This would protect the employees, customers and creditors of the company. Of course, it wouldn’t protect the people that own congress and the supreme court, so it will never happen.
reaperman 3y ago
To be fair, if you follow the GP's formula, and magically plug in the correct numbers...you'll socialize the gains as well. Because the social losses of the pollution will be offset by the high fines. It's a fair system, it just moves agency for "who can pollute for the social good?" from the government to the private corporation. I don't love it personally, but it's decidedly not "Privatized profits and socialized losses". It's explicitly a system to make sure that the profits are shared from the damaging-corporation, to the government of the people damaged. In theory, I think they have a great point, which might be workable to inform future fine frameworks (we will always need fines in addition to anything else, and this isn't the worst way to set the fines). In reality, I suspect that captive government officials will set some of the variables far too "in-favor" of the corporations in exchange for backroom deals or cronyism. But it's far from the worst idea I've seen.
- horsawlarway 3y ago
  But the issue is that it's not "who can pollute for the social good?". It's "Who's been doing some serious illegal dumping?". In almost all of these cases - the issue is NOT that the company simply didn't know what was going to happen (although in many cases this is where they started). It's that the company hid facts, lied, manipulated the public, and in general attempted to squash any and all evidence that might hurt their profits. The first is acceptable. The second should be met with termination (as in - the companies that do this should have leadership removed: anything from jail time to nationalization).
pilsetnieks 3y ago
> We have a term for this: Privatized profits and socialized losses We have an even older term for that: The tragedy of the commons [1] [1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons
lumb63 3y ago
What you are proposing is great in a black-and-white world where some party is doing something strictly “bad” and harming society for their own gain, but it’s disingenuous to pretend that everything is “good” or “bad” behavior. A lot of people have benefited in some way from PFAS products, like non-stick pans, waterproof clothing, etc. The problem is that the cost of those benefits was intentionally covered up to influence consumer behavior. Now, the logical thing as a society is to assess what we lost due to that bad behavior, and recoup that, maybe plus some punitive measure. Look at different products to get an idea of what I’m talking about. For instance, prescription medicine often has side effects. People are aware of the side effects, typically, and make an assessment of whether the benefits outweigh the costs. When we discover that companies did not correctly assess the side effects, we react accordingly, and fine them, ban them from selling the product, etc. But some of those drugs, despite unknown side effects, do a lot of good in the world.
- horsawlarway 3y ago
  > The problem is that the cost of those benefits was intentionally covered up to influence consumer behavior. Now, the logical thing as a society is to assess what we lost due to that bad behavior, and recoup that, maybe plus some punitive measure. So go back to the first point where the company is acting in bad faith: Covering up data that shows a danger. Take EVERY fucking cent since then. If they don't have it? Nationalize them. You're still entirely focused on the "Recover the commons" side of this, and what I'm saying is that punishment is used to establish the set of accepted social rules we play by. Right now, we're saying "Lie all you want, obfuscate all you want, Literally kill people to make money - don't worry, we'll only fine you 5% of the profit you make doing it. (in reality: the fine here was less than 2% of the revenue made)" My attitude is that this is unacceptable. I am not a fool - the world is incredibly complex and I know full well there is a LOT of nuance around this topic. I still find it utterly galling that we're issuing fines that are literally chump change compared to the profits these companies are making. ---- So given that we've been trying the whole "fine them but not too hard" strategy, and we have clear evidence that companies treat these fines as simple costs of business... At what point do you admit that maybe a slap on the wrist is no longer the right answer?
ifyoubuildit 3y ago
> I am not trying to "maximize total welfare" where one way to accomplish that is to allow a bad actor to get ridiculously wealthy at the expense of everyone else (even if the total paid by everyone else is less than the bad actor makes). I don't know if parents suggestion leads to this or not, but I don't understand why we should have a problem with "maximizing total welfare" just because some entity would become ridiculously wealthy. Don't we want to incentivise that sort of behavior? Whether they're "bad" or not?
- horsawlarway 3y ago
  Because welfare cannot be boiled down to simply "More dollars are here". My problem with this is the same as my problem with using the average instead of the median. Imagine two situations with a small group of 10 people: In situation #1: All ten people have 10 dollars to their name. Net across the group is 100 bucks. In situation #2: 1 person (we'll call him Bob) has 1000 dollars, and every other person is 100 dollars in debt. Net across the group is 100 bucks. Which one of those do you want to live in? According to our "Money is literally all we care about because we're morally bankrupt" maximization strategy, these situations are identical, and everyone should be thrilled. In reality... Bob is living the high life and everyone else is too poor to matter. Great for Bob in the short term, terrible for social stability, because those 9 other folks are starting to think he looks mighty tasty right about now.

manoDev 3y ago

IMO, all that is necessary is the law strongly backing personal liability of C-level in all industries. Trying to penalize companies never works in practice, regulators CANT let large companies going bankrupt, cascading defaults of creditors, creating unemployment, etc. It never happens. Also, this penalizes the workers the most. Once psychopaths have certainty of personal consequences they will want to stay away from executive positions.

horsawlarway 3y ago
There is too strong an incentive to assign fall men to positions of "public responsibility" and then operate behind them at will (profitably). I'd maybe be in favor of a law that demanded that fines be paid in equity of the company (starting with equity held by the C-level officers and board) at a steep discount on market price (say... 50% valuation). Engage in enough bad behavior and you become nationalized over time, and then the public can decide what to do with the result.
hedora 3y ago
Regulators definitely could let large companies go bankrupt. They’d seize 100% of the stock and cancel any exit packages, then fire the board, and CEO, and claw back any remaining fines from the personal accounts and garnished wages of the executives responsible for the problem. This would protect the employees, customers and creditors of the company. Of course, it wouldn’t protect the people that own congress and the supreme court, so it will never happen.

reaperman 3y ago

To be fair, if you follow the GP's formula, and magically plug in the correct numbers...you'll socialize the gains as well. Because the social losses of the pollution will be offset by the high fines. It's a fair system, it just moves agency for "who can pollute for the social good?" from the government to the private corporation. I don't love it personally, but it's decidedly not "Privatized profits and socialized losses". It's explicitly a system to make sure that the profits are shared from the damaging-corporation, to the government of the people damaged. In theory, I think they have a great point, which might be workable to inform future fine frameworks (we will always need fines in addition to anything else, and this isn't the worst way to set the fines). In reality, I suspect that captive government officials will set some of the variables far too "in-favor" of the corporations in exchange for backroom deals or cronyism. But it's far from the worst idea I've seen.

horsawlarway 3y ago
But the issue is that it's not "who can pollute for the social good?". It's "Who's been doing some serious illegal dumping?". In almost all of these cases - the issue is NOT that the company simply didn't know what was going to happen (although in many cases this is where they started). It's that the company hid facts, lied, manipulated the public, and in general attempted to squash any and all evidence that might hurt their profits. The first is acceptable. The second should be met with termination (as in - the companies that do this should have leadership removed: anything from jail time to nationalization).

pilsetnieks 3y ago

> We have a term for this: Privatized profits and socialized losses We have an even older term for that: The tragedy of the commons [1] [1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons

lumb63 3y ago

What you are proposing is great in a black-and-white world where some party is doing something strictly “bad” and harming society for their own gain, but it’s disingenuous to pretend that everything is “good” or “bad” behavior. A lot of people have benefited in some way from PFAS products, like non-stick pans, waterproof clothing, etc. The problem is that the cost of those benefits was intentionally covered up to influence consumer behavior. Now, the logical thing as a society is to assess what we lost due to that bad behavior, and recoup that, maybe plus some punitive measure. Look at different products to get an idea of what I’m talking about. For instance, prescription medicine often has side effects. People are aware of the side effects, typically, and make an assessment of whether the benefits outweigh the costs. When we discover that companies did not correctly assess the side effects, we react accordingly, and fine them, ban them from selling the product, etc. But some of those drugs, despite unknown side effects, do a lot of good in the world.

horsawlarway 3y ago
> The problem is that the cost of those benefits was intentionally covered up to influence consumer behavior. Now, the logical thing as a society is to assess what we lost due to that bad behavior, and recoup that, maybe plus some punitive measure. So go back to the first point where the company is acting in bad faith: Covering up data that shows a danger. Take EVERY fucking cent since then. If they don't have it? Nationalize them. You're still entirely focused on the "Recover the commons" side of this, and what I'm saying is that punishment is used to establish the set of accepted social rules we play by. Right now, we're saying "Lie all you want, obfuscate all you want, Literally kill people to make money - don't worry, we'll only fine you 5% of the profit you make doing it. (in reality: the fine here was less than 2% of the revenue made)" My attitude is that this is unacceptable. I am not a fool - the world is incredibly complex and I know full well there is a LOT of nuance around this topic. I still find it utterly galling that we're issuing fines that are literally chump change compared to the profits these companies are making. ---- So given that we've been trying the whole "fine them but not too hard" strategy, and we have clear evidence that companies treat these fines as simple costs of business... At what point do you admit that maybe a slap on the wrist is no longer the right answer?

ifyoubuildit 3y ago

> I am not trying to "maximize total welfare" where one way to accomplish that is to allow a bad actor to get ridiculously wealthy at the expense of everyone else (even if the total paid by everyone else is less than the bad actor makes). I don't know if parents suggestion leads to this or not, but I don't understand why we should have a problem with "maximizing total welfare" just because some entity would become ridiculously wealthy. Don't we want to incentivise that sort of behavior? Whether they're "bad" or not?

horsawlarway 3y ago
Because welfare cannot be boiled down to simply "More dollars are here". My problem with this is the same as my problem with using the average instead of the median. Imagine two situations with a small group of 10 people: In situation #1: All ten people have 10 dollars to their name. Net across the group is 100 bucks. In situation #2: 1 person (we'll call him Bob) has 1000 dollars, and every other person is 100 dollars in debt. Net across the group is 100 bucks. Which one of those do you want to live in? According to our "Money is literally all we care about because we're morally bankrupt" maximization strategy, these situations are identical, and everyone should be thrilled. In reality... Bob is living the high life and everyone else is too poor to matter. Great for Bob in the short term, terrible for social stability, because those 9 other folks are starting to think he looks mighty tasty right about now.