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Regarding medical innovation. Other fields also threaten people's lives. If you build a new kind of jet engine, which gets through testing but which then is re

Regarding medical innovation. Other fields also threaten people's lives. If you build a new kind of jet engine, which gets through testing but which then is responsible for a spectacular crash, then your product has killed a few hundred people. And yet, unless there was fraud in the documentation of the tests, there have not been criminal cases in the past. I worry that in the future there will be criminal cases. Again, the trend that I worry about is that what used to have been treated as a civil matter will, in the future, be treated as a criminal matter. We do not need to focus on the medical field. Many other fields can cause people to die - industrial automation, the transport and disposal of toxic chemicals, the construction of buildings (which could then fail and kill people). All industries are in need of innovation all of the time, yet innovation brings with it risk, including the risk of death. How much innovation will we get if we make these matters criminal? I should emphasize, just in case people forget, that fraud has always been criminal. It has been criminal for centuries. So the move to criminalize more aspects of business is not a move to make fraud criminal. If you think that the Sarbanes-Oxley Act made fraud criminal, then you are mistaken. Fraud has always been criminal. Sarbanes-Oxley is representative of the new trend. The overall goal was to encourage greater accuracy in the reporting of a company's financial health. This goal could have been reached through a variety of methods, including both the carrot (rewards) and the stick (punishments). Rewards could have included tax breaks for meeting some additional level of compliance. Punishments could have included fines levied against companies that failed to meet a higher level of compliance. These approaches would not have raised the risk of jail time for CEO's. Instead, Sarbanes-Oxley decided to go with the heaviest kind of punishment of all - to treat infractions as criminal offenses, potentially meriting jail time. This punitive attitude is going to have a chilling effect on the amount of innovation we can expect in any field.

kiba 17y ago
The punitive attitude is going that way because there is no incentive or disincentive to care about innovations in any given market. Politicans care far more about abortion and other popular issue because it give them the vote. It doesn't even matter if their policy isn't good, they will parrot it in lieu of popular opinions. Clearly, the republic do not have any if much features that keep bad policies away and tending toward good policies. Unfortunately, it is also very painful to remove a republic or any monopolistic governemnt and start a new type of governing system. It could even have disasterous consequences if the new governing system is seriously flawed. The market for governing is only 200ish suppliers versus 6 billions human beings. Clearly, we also going to need a better system that generate these "governing entities" so that we can speed up innovation in social paradigms that regulate human socities.
pyre 17y ago
The problem can be that punitive matters are handled as a 'cost of doing business.' Who cares if we kill a few people with our products if our profit will be more than the costs of any punitive settlements/fines? The problem really comes in when there is willful negligence or malice in the process. If an engineer comes to you (as a manager) and tells you the your product will fail in certain circumstances and cost lives. Then you say, "I'll take that 'under advisement'," and completely ignore it because to take that into account would cause the project to run over deadlines and you want to look good to your bosses. Then the product is deployed in the field it fails under those same circumstances. Lives are lost. Lawsuits are filed. The 'company' loses and/or settles with the grieving families and pays out some money. But the real cause of those deaths is your willful neglect just to please some corporate masters in the hope of a promotion. I personally think that you should be held legally responsible in such a case. But the prevalence of 'not me syndrome'... aka Diffusion of Responsibility (http://en.wikipedia.org/wiki/Diffusion_of_responsibility http://en.wikipedia.org/wiki/Diffusion_of_responsibility). Once a sufficiently large group of people start to function as an entity, that entity can do things that no normal person would be allowed to do... and no one is held responsible.
- kiba 17y ago
  Killing a few people will be more than just punitive settlements/fine, it will also lower overall revenues in the long term because consumers now have reasons to fear a certain company's product. That, and your competitors will hawk their wares and point out that their product never killed anybody, in addition to big suspicions from consumer magazines.
  - pyre 17y ago
    This kind of stuff happens all the time in the auto industry. Don't narrow your view to just medical companies.
    - kiba 17y ago
      What do you mean by this? Is my conjecture wrong?
lkrubner 17y ago
pyre, in your rendition, the punitive attitude acts as some kind of leveling force, effecting the really big corporations at least as much as the small startups. But the article that is linked at the top of this thread ("Company size: Big is back") implies that the regulatory trend is giving an advantage to the biggest corporations, as such increased regulations impose costs that small firms can not handle. Again, the Sarbanes-Oxley Act is worth considering in this context. The biggest firms are the ones most likely to avoid a conflict with the law, as they can afford the legions of accountants and lawyers needed to comply. And, of course, along with a punitive attitude that will likely effect smaller firms most, there are the enormous bailouts being given to the largest firms. As the article says: "Governments have been rescuing companies they consider too big to fail, such as Citigroup and General Motors. Recession is squeezing out smaller and less well-connected firms. But there are other reasons too, which are giving big companies a self-confidence they have not displayed for decades." I suspect that at some level these attitudes are linked. The flip side of "too big to fail" is possibly "we don't give a damn about the rest of you."

kiba 17y ago

The punitive attitude is going that way because there is no incentive or disincentive to care about innovations in any given market. Politicans care far more about abortion and other popular issue because it give them the vote. It doesn't even matter if their policy isn't good, they will parrot it in lieu of popular opinions. Clearly, the republic do not have any if much features that keep bad policies away and tending toward good policies. Unfortunately, it is also very painful to remove a republic or any monopolistic governemnt and start a new type of governing system. It could even have disasterous consequences if the new governing system is seriously flawed. The market for governing is only 200ish suppliers versus 6 billions human beings. Clearly, we also going to need a better system that generate these "governing entities" so that we can speed up innovation in social paradigms that regulate human socities.

pyre 17y ago

The problem can be that punitive matters are handled as a 'cost of doing business.' Who cares if we kill a few people with our products if our profit will be more than the costs of any punitive settlements/fines? The problem really comes in when there is willful negligence or malice in the process. If an engineer comes to you (as a manager) and tells you the your product will fail in certain circumstances and cost lives. Then you say, "I'll take that 'under advisement'," and completely ignore it because to take that into account would cause the project to run over deadlines and you want to look good to your bosses. Then the product is deployed in the field it fails under those same circumstances. Lives are lost. Lawsuits are filed. The 'company' loses and/or settles with the grieving families and pays out some money. But the real cause of those deaths is your willful neglect just to please some corporate masters in the hope of a promotion. I personally think that you should be held legally responsible in such a case. But the prevalence of 'not me syndrome'... aka Diffusion of Responsibility (http://en.wikipedia.org/wiki/Diffusion_of_responsibility http://en.wikipedia.org/wiki/Diffusion_of_responsibility). Once a sufficiently large group of people start to function as an entity, that entity can do things that no normal person would be allowed to do... and no one is held responsible.

kiba 17y ago
Killing a few people will be more than just punitive settlements/fine, it will also lower overall revenues in the long term because consumers now have reasons to fear a certain company's product. That, and your competitors will hawk their wares and point out that their product never killed anybody, in addition to big suspicions from consumer magazines.
- pyre 17y ago
  This kind of stuff happens all the time in the auto industry. Don't narrow your view to just medical companies.
  - kiba 17y ago
    What do you mean by this? Is my conjecture wrong?

lkrubner 17y ago

pyre, in your rendition, the punitive attitude acts as some kind of leveling force, effecting the really big corporations at least as much as the small startups. But the article that is linked at the top of this thread ("Company size: Big is back") implies that the regulatory trend is giving an advantage to the biggest corporations, as such increased regulations impose costs that small firms can not handle. Again, the Sarbanes-Oxley Act is worth considering in this context. The biggest firms are the ones most likely to avoid a conflict with the law, as they can afford the legions of accountants and lawyers needed to comply. And, of course, along with a punitive attitude that will likely effect smaller firms most, there are the enormous bailouts being given to the largest firms. As the article says: "Governments have been rescuing companies they consider too big to fail, such as Citigroup and General Motors. Recession is squeezing out smaller and less well-connected firms. But there are other reasons too, which are giving big companies a self-confidence they have not displayed for decades." I suspect that at some level these attitudes are linked. The flip side of "too big to fail" is possibly "we don't give a damn about the rest of you."