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Originally Posted by CoccoBill
Why is that, what is stopping them from changing?
Incumbency in voter, business, and bureaucratic interests that have high incentive to perpetuate their niche in the law, and the inherent nature of law/legislation being enormously complex
Governments do change, just at a snail's pace. Refer to the drug analogy. It's solid. The US (and Europe) are not living with drug laws that reflect the society today, but the society that existed decades ago. If the slate was cleaned today and all drug laws had to be passed all over again tomorrow, we'd find they look much, much different than the ones on the books. Markets begin reacting to new information almost instantly. Shifts in company and consumer practices can take place overnight or within weeks. Yet, notice how the US government has been "debating" immigration reform for, um, a decade now, and with no change whatsoever.
Your argument is more against bad/rigid governance and policies than governance and policies themselves. Personally I'm not for bad governance or shitty regulations, only for the ones that are necessary, actionable, fair and efficient. Obviously achieving those isn't trivial, but I'm not convinced it's impossible.
My argument is fundamentally against government, not just bad government. But it is also against bad government when compared to good government. I think I addressed this in an earlier post. Basically, if we were to do something like compare healthcare systems in US and EU, the difference in their function wouldn't be about amount of government, but competency of government. A large presidential federation of dynamic cultures just doesn't govern as well as small unitary parliaments. But even then, be sure that my argument here is fundamentally anti-government. Government brings with it inherent corruption and distortions like regulatory capture, moral hazards, and rent seeking that are incredible problems (so huge they're sometimes existential problems) that markets do not.
Both. A faulty/dangerous product gets recalled fast after the fault is discovered by the public, before that there is zero incentive to do that. There are numerous examples where companies deny any faults in their products when their existence is painfully obvious to everyone else. Answer this question: Why would a company's executive recall a product with a major flaw, causing major financial losses and damage to the company's public image, when the flaw would without rigorous testing only manifest itself after several years if at all, after the executive has already left the company?
This view of snake oil salesmen running off with the cash as his company dies is mostly a myth. It's not that people wouldn't try it, but that responsibilities and incentives don't align with the idea that one man can or would do this (to the degree that it's a systemic risk). Nobody at Google could do this. Nobody at Amazon, nobody at Goldman, nobody at GE. The responsibilities are way too dispersed. There are shareholders.
But let's say there's just one owner, like Gabe Newell of Valve. He has autonomy over every aspect of his multi-billion dollar company (IIRC). If he wanted to do this, he could, right? No, he couldn't. Well, he *could*, but it would be incredibly stupid, he would be met by mounting reasons why not to at every turn, and even in a system without government, he would probably end up destitute, punished, and ostracized anyways. Why wouldn't he do this? Because selling his assets nets him more money (and prestige) than ripping himself off and running into the night. If he did the latter, the market would respond terribly to him and it would be so bad that he would likely be unable to even keep his money/assets in any safe bank/insurance systems. He would have screwed over a lot of people, and every relatively free market we know of already has designed ways to punish those who behave like this. It's like how if I get caught bouncing checks in one bank, I go into an inter-banking system and can't get any new checking accounts.
Markets hate fraud. Way more than governments do.
Even if you scenario was true, how do you suppose regulators could regulate against it? This is more of the "perfect being the enemy of the good" thing. It's an assumption that if capitalism is flawed, government can necessarily fill the gap. That isn't true and every bit of evidence we have is that government is inherently terrible at filling these gaps. This should be an open and shut concept given the fact that there are millions of felons for smoking weed. Renton once told me that he thinks people are bred to believe in the state, so it becomes like blasphemy to suggest otherwise, and we so easily ignore colossal examples of how government destroys lives to far, far, far, far greater degrees than private enterprise ever has
Those are people working both for the public and private sectors, there's nothing inherently different in their analytic capabilities. Their incentives and goals, however, differ. The accountant at the private company is (perhaps directly) incentivised to maximize their company's profits, say by finding/creating loopholes in their own policies, whereas the goal for the public sector accountant (albeit indirectly through their motivation to adhere to their instructions) is to ensure product safety, ethical practices, legality etc. I don't doubt that the markets will adjust, in time. I just wonder how long people will have to breath leaded air and eat leaded toys waiting for that to happen.
These are the assumptions, but not how it falls down. Companies "finding loopholes in their policies" is a capability given to them by government, so it's not market concern. That aside, companies trying to create more wealth is good, pretty much regardless how it's done. The reason is because there are other companies doing the same thing and consumers are choosing the winners. The last thing companies can get away with is screwing customers. Just look at how in the US (where the capitalist ideal is most held), "the customer is always right" is a thing. Restaurants exist in one of the freest markets around, and every single one of them bends over backwards to please the customer, even when the customer is wrong, because the customer really isn't "wrong" because the easiest thing in the world would be for him to go next door and help the competition
As for what you said about government incentives being about public safety and stuff, that's true to a small percentage, but because there is little accountability, it becomes a burden for bureaucracies. How many videos of cops beating or killing innocent civilians in the US have you watched? How many times have you seen these cops punished? Just like with companies, in bureaucracies, the incentive is self-perpetuation. But unlike in companies, in bureaucracies, there is little accountability for results since their revenue streams are not based on results. If McDonalds was acting like the LAPD, it would be bankrupted within a month. If people try to stop the LAPD when they're hurting somebody, they get put through extensive legal trouble and usually into prison.
The word "corruption" probably wouldn't exist except for government. Since government has little accountability, its incentives align more with fraud and coercion than with results.
I think a lot of people from the relatively small areas where government doesn't suck nearly as much (like Scandinavia) are wrong if they are to call government a driver of the good in their societies. Those regions are healthy and unified because the populace is healthy and unified, and government was not the creator of that.
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