O'Reilly vs. Palin on Tea Party

What the hell? That's about as free-market as you get. Consumers identified a need, organized themselves to serve that need, and did it explicitly not to make a profit, but rather to provide a service. The government was never involved.

Ah, but it is. The UL safety standards instantiate government codes like the National Electric Code. I would have pegged self-regulation by manufacturers as the voluntary ideal.

'Free market' is not at ALL synonymous with 'for profit'. A much, much better synonym is 'voluntary participation'. Everyone who ever got involved with the UL did so voluntarily. No law was passed, no force of arms were used to demand participation. It's the benchmark for free-market regulation.

I agree with you partly here. But the difference - and I would think it would be important for you - is that UL both develops and codifies tests for *government* safety standards. It's not the case that each company voluntarily sets up it's own compliance organizations. Nor do UL standards have any force independent of government codes. Instead, government regulation is imposed through the UL standards.

I'd have thought that would not pass your sniff test, but I guess I'm wrong. You're okay with government imposing standards, as long as a third-party is available to do the legwork and offer the functional standards to corporations. Fair enough.

I've said on numerous occasions that I'm okay with many kinds of regulation. I've repeatedly pointed out that, were it legal, many construction companies would use pregnant women as building material.

I've also said that, if the game of football were played by capitalist rules, there would be moats and landmines.

What I'm trying to point out is that the UL is very much a free-market organization, and that profit != free market by any means.

Aetius wrote:

It's impossible to predict what would have happened, of course, but it's also not fair to dismiss all alternative scenarios where the government doesn't spend any money on transit as belonging to the Stone Age of transportation.

Then please tell me which corporation would have stepped up the plate to build a coherent national system? The answer is none of them. Or if they did, they'd only connect major cities or cities that were critical to their supply chain. It would be a patchwork system at best. And all the economic benefit of increased trade and travel a large number of businesses have benefited from since the 50s would never have been realized.

Aetius wrote:

What you're missing here is that regulations don't have to be government regulations. There are numerous examples of private-sector regulators that arguably work as good or better, and are certainly much cheaper, UL being the canonical example. Those of us who believe the free market is more efficient and effective are not opposed to regulation. We're just opposed to government regulation, such as the regulation that was in place around the meat industry in Chicago at the time Upton Sinclair wrote his not-entirely-true The Jungle. It's not that government regulation can be ineffective, but rather than it tends to be less effective ... and cost a lot more, in addition to often being arbitrary, unfair, co-opted by large industry players, and often downright intrusive.

Unless regulations are backed with the pain of punishment, they are worthless. In fact, the only reason why UL regulation works is because the government backs it up and says "if it's not certified by a firm like UL, it's illegal to use the product". That doesn't mean UL certification is effective, it just means they're benefiting from the government incorporating its certification into laws, building codes, etc.

Self-regulation by businesses or industries simply doesn't work. There's too much incentive to cheat in the short term to maximize profits and really no downside if they do. Any death/injury/disease/loss caused by this can be papered over with an army of corporate lawyers and a good PR agency.

I've said on numerous occasions that I'm okay with many kinds of regulation. I've repeatedly pointed out that, were it legal, many construction companies would use pregnant women as building material.

Sorry for the confusion, then.

Robear wrote:

Ah, but it is. The UL safety standards instantiate government codes like the National Electric Code. I would have pegged self-regulation by manufacturers as the voluntary ideal.

Of course they do - it's part of the service they provide to their customers, navigation of the myriad and labyrinthine requirements of all the various state and national regulations.

'Free market' is not at ALL synonymous with 'for profit'. A much, much better synonym is 'voluntary participation'. Everyone who ever got involved with the UL did so voluntarily. No law was passed, no force of arms were used to demand participation. It's the benchmark for free-market regulation.

I agree with you partly here. But the difference - and I would think it would be important for you - is that UL both develops and codifies tests for *government* safety standards. It's not the case that each company voluntarily sets up it's own compliance organizations. Nor do UL standards have any force independent of government codes. Instead, government regulation is imposed through the UL standards.

You've got this entirely backwards. When the UL was established, they weren't implementing government regulations, they were providing services for insurance companies. They only offer the services dealing with government regulations because their customers want that service. If the government regulations went away, UL would still be there and still be effective, just as it was a hundred years ago when they got started. And they DO have force, because no major retailer will deal in products that are not UL certified and no sane consumer would buy something that wasn't tested. Inertia is useful in the private sector too.

And it's very important to understand that the free market is just that, free. For-profit corporations can participate. So can non-profits. Co-ops? Check. Communes? Check. S-Corporations? Check. A free market means free, so as long as you're not stealing or hurting someone, in the free market you arrange whatever economic organization works for you and/or your friends.

OG_slinger wrote:
Aetius wrote:

It's impossible to predict what would have happened, of course, but it's also not fair to dismiss all alternative scenarios where the government doesn't spend any money on transit as belonging to the Stone Age of transportation.

Then please tell me which corporation would have stepped up the plate to build a coherent national system? The answer is none of them. Or if they did, they'd only connect major cities or cities that were critical to their supply chain. It would be a patchwork system at best. And all the economic benefit of increased trade and travel a large number of businesses have benefited from since the 50s would never have been realized.

You're making two assumptions: a) that major projects are never privately funded, and b) a national road system is the solution the market would have chosen. We have a coherent national telephone and internet system that, despite the fantastic cost, has obliterated the tiny, low-capacity voice-only network that was once built by a government-controlled monopoly. We're continuing to add to that system to the tune of tens of billions of dollars a year, because demand is so high, and now Google is starting a pilot project to bring Gigabit networking to select cities. It's quite simply ridiculous to say that corporations cannot or will not invest in major infrastructure projects, because it is continually happening around us on a daily basis on a scale that dwarfs government infrastructure investment. And guess what? Highway systems are also part of that investment.

And while the national road system is useable and does offer some advantages, you can't just argue that "it would be a patchwork system at best". Private roads in the past were efficiently maintained and vastly superior to the alternatives at the time, and there's no reason that trend would not have continued. Demand and competition drive innovation. And the innovations aren't limited to just roads. Perhaps we would not have the pollution problems we have today because private roads would have much more control over vehicle licensing. Perhaps our fatalities would be much lower because the private roads would have more leverage over car companies to produce safer cars. There's been a lot of thought put into that, and there are current examples of how such systems can work.

Unless regulations are backed with the pain of punishment, they are worthless.

And so are government regulations that are not enforced, or worse, are used to protect companies from competition and bail them out with taxpayer money when they get in trouble - those are a net negative. The most effective regulation is one that, when violated, puts the company out of business and generates criminal charges when necessary. That's all that is required.

In fact, the only reason why UL regulation works is because the government backs it up and says "if it's not certified by a firm like UL, it's illegal to use the product". That doesn't mean UL certification is effective, it just means they're benefiting from the government incorporating its certification into laws, building codes, etc.

That's simply not true. UL came about, and is still effective, because insurance companies needed standards. The government had very little to do with it until relatively recently. And the government does have a role to play when criminal charges are necessary.

Self-regulation by businesses or industries simply doesn't work. There's too much incentive to cheat in the short term to maximize profits and really no downside if they do. Any death/injury/disease/loss caused by this can be papered over with an army of corporate lawyers and a good PR agency.

Of course it doesn't, precisely because there is such incentive to cheat. That's why UL and organizations like it are independent and non-profit, not part of any business group or industry. Which would you trust - a third party like UL with a hundred-year history of fair and strict regulation, or an industry organization that was organized last year? It also requires other businesses and consumers to have a basic understanding of the market. UL and other private regulator' businesses are based entirely on trust, not from the companies who's products they test, but from the retailers and consumers who rely on them. It is overwhelmingly in their interest not to cheat. That's why they've been doing this longer than almost all of the companies they work with. Would it be possible to cheat in such an environment? Sure. But the incentives are against it, and thus cheating has always been minimal, government involvement or not. An army of corporate lawyers and a good PR agency cannot fix a problem where no one will buy your products because they aren't properly certified by a trusted third party. Long-term spinning of trust does not and cannot work, because word will always get out.

You've got this entirely backwards. When the UL was established, they weren't implementing government regulations, they were providing services for insurance companies.

Yes. And three years after their first contract, they began working with the National Electric Code - a government standard enforced by law. And that's a huge part of their work since then, working to ensure government mandated codes are met in industry.

A free market means free, so as long as you're not stealing or hurting someone, in the free market you arrange whatever economic organization works for you and/or your friends.

It's the definition of "not stealing or hurting someone" that is often problematic.

Aetius wrote:

You're making two assumptions: a) that major projects are never privately funded, and b) a national road system is the solution the market would have chosen. We have a coherent national telephone and internet system that, despite the fantastic cost, has obliterated the tiny, low-capacity voice-only network that was once built by a government-controlled monopoly. We're continuing to add to that system to the tune of tens of billions of dollars a year, because demand is so high, and now Google is starting a pilot project to bring Gigabit networking to select cities. It's quite simply ridiculous to say that corporations cannot or will not invest in major infrastructure projects, because it is continually happening around us on a daily basis on a scale that dwarfs government infrastructure investment. And guess what? Highway systems are also part of that investment.

And while the national road system is useable and does offer some advantages, you can't just argue that "it would be a patchwork system at best". Private roads in the past were efficiently maintained and vastly superior to the alternatives at the time, and there's no reason that trend would not have continued. Demand and competition drive innovation. And the innovations aren't limited to just roads. Perhaps we would not have the pollution problems we have today because private roads would have much more control over vehicle licensing. Perhaps our fatalities would be much lower because the private roads would have more leverage over car companies to produce safer cars. There's been a lot of thought put into that, and there are current examples of how such systems can work.

A project on the size of a national highway system would never be funded by private means. You know it and I know it. It would be too expensive and take too long for any investor to get a reasonable return on their investment. We're talking hundreds of billions of dollars and decades to have the tolls pay off the development costs.

I can argue that a private system would be nothing more than a patchwork because it would be. It would follow the development of rail roads, with regional "lines" popping up here and there. The replacement to your I-75 or I-70 would be exceptionally difficult for a single company or group of investors to build. When its so expensive to build a three or four billion semiconductor fab plant that companies now band together to spread the risk, I find it very difficult to believe that investors easily scrape together the tens of billions it would cost to replicate the highway network. Again, it took a massive government subsidy in the form of land grants to get the railroad companies to link the coasts. Investors would look for the same to build a road network or price guarantees on how much they could charge.

I'm glad you think the highway system is "useable" and offers "some advantages". I'm sure you'd think it better if every vehicle had to bother with multiple toll booths and transfer systems as they switch from one company-owned highway to another, if they connected at all. The added transportation costs would be a big sponge on the economy, sucking up money. Raw materials, finished goods, everything would cost more because of the added cost of paying the road companies. That would stunt economic development and, very likely, cut off entire regions of the country because investors couldn't see the value of connecting them.

Your example of our communication system isn't really valid since you are comparing different technologies (and technologies that wouldn't exist without government-sponsored research). Considering that I live in a major city and can't get access to digital cable or fiber to my home, you might want to rethink the efficiency of the market. Perhaps if those companies hadn't spent billions of dollars duplicating laying fiber (much of which still remains dark) and focused on connecting homes there might even be more market for what they laid.

Aetius wrote:
Unless regulations are backed with the pain of punishment, they are worthless.

And so are government regulations that are not enforced, or worse, are used to protect companies from competition and bail them out with taxpayer money when they get in trouble - those are a net negative. The most effective regulation is one that, when violated, puts the company out of business and generates criminal charges when necessary. That's all that is required.

Then the answer is simple, Aeitus. Companies should simply stop trying to influence government. You blame the government, but it's really all your "freemarket" companies that have lobbied for the twisting of government rules and regulations.

Aetius wrote:
Self-regulation by businesses or industries simply doesn't work. There's too much incentive to cheat in the short term to maximize profits and really no downside if they do. Any death/injury/disease/loss caused by this can be papered over with an army of corporate lawyers and a good PR agency.

Of course it doesn't, precisely because there is such incentive to cheat. That's why UL and organizations like it are independent and non-profit, not part of any business group or industry. Which would you trust - a third party like UL with a hundred-year history of fair and strict regulation, or an industry organization that was organized last year? It also requires other businesses and consumers to have a basic understanding of the market. UL and other private regulator' businesses are based entirely on trust, not from the companies who's products they test, but from the retailers and consumers who rely on them. It is overwhelmingly in their interest not to cheat. That's why they've been doing this longer than almost all of the companies they work with. Would it be possible to cheat in such an environment? Sure. But the incentives are against it, and thus cheating has always been minimal, government involvement or not. An army of corporate lawyers and a good PR agency cannot fix a problem where no one will buy your products because they aren't properly certified by a trusted third party. Long-term spinning of trust does not and cannot work, because word will always get out.

So paint me a picture of a private entity that would regulate banks and the financial system. Please. Where would it get funding? From the banks themselves? If so, we're exactly where we're at now, with the budget for federal regulators coming from the companies they regulate. That created the environment of regulators who wouldn't regulate so as to get more companies to use them. And what could that group do if the banks were doing something bad? Issue a press release? Again, regulations have to have teeth. UL worked only because the insurance companies wouldn't pay out unless certified products were used. Or should we just wait 100 years for a financial UL to evolve and become trustful?

The anti-regulatory crowd always seems to forget that a regulation gets put on the books, not for whim, but because someone f*cks up in a fabulous way and that regulation is us collectively shutting the barn door after all the horses have already fled.

A project on the size of a national highway system would never be funded by private means.

You know, I'm not sure that's the case. The toll road system that's often used in the East seems to work really well. I have a visceral dislike of toll roads and avoid them whenever possible, and I personally would prefer to see roads under government control, but they do work. There's one toll highway in Atlanta, I don't remember the name, that's surrounded by government-maintained roads. The toll highway is extremely well-maintained in comparison. No litter, perfect road surface. Leaving that highway to the government-controlled ones is an immediate and obvious reduction in quality.

Now, the government roads are good enough, and I don't mind driving on them at all, but the toll road is about as perfect as roads get.

Malor wrote:

The toll highway is extremely well-maintained in comparison. No litter, perfect road surface. Leaving that highway to the government-controlled ones is an immediate and obvious reduction in quality.

Anecdotally, I might've agreed with you a couple years back, but the piss poor management of the Ohio Turnpike over the last 5 years has utterly soured me on the concept of private roads. Not sure where my tolls are going, but it's certainly not going into road repair. Pretty new buildings housing chain restaurants charging 50-100% more than anywhere else (because you're on a toll road, where else can you go for food?) that sprouted up every 4-ish miles seem to be the culprit.

Malor wrote:
A project on the size of a national highway system would never be funded by private means.

You know, I'm not sure that's the case. The toll road system that's often used in the East seems to work really well. I have a visceral dislike of toll roads and avoid them whenever possible, and I personally would prefer to see roads under government control, but they do work. There's one toll highway in Atlanta, I don't remember the name, that's surrounded by government-maintained roads. The toll highway is extremely well-maintained in comparison. No litter, perfect road surface. Leaving that highway to the government-controlled ones is an immediate and obvious reduction in quality.

Now, the government roads are good enough, and I don't mind driving on them at all, but the toll road is about as perfect as roads get.

And would the toll road system of the East work the same in Montana, Nevada, or any sparsely populated Western state? Of course not. They would never make enough money because of the lower traffic levels so they would never be built (or they would be the cheapest POS around).

OG_slinger wrote:

And would the toll road system of the East work the same in Montana, Nevada, or any sparsely populated Western state? Of course not. They would never make enough money because of the lower traffic levels so they would never be built (or they would be the cheapest POS around).

It depends, a century and a half ago, both publicly funded and private railroads connected the two coasts of the US. The private routes made folks rich. There's still money in interstate commerce. I'd speculate that along shipping routes between hub cities, roads could be profitable. It's the remote points that don't connect natural resource harvesting or tourist traffic points that would fall apart without government funding. Already, the Southeastern parts of Oregon are suffering from this. Something like 60% of all land is publicly owned, which means there isn't really a tax base. Until recently, the Federal Government made timber payments, to help support the civil infrastructure after legislation made it difficult or impossible to harvest timber. Now that those are gone or in question (they started to come back when the Dems regained control of congress) there are all sorts of unanswered questions about what to do with a rural population that cannot support the cost of civilization through taxing themselves.

From another perspective, I think we should look at open-source software for an example of what voluntary self-regulation might look like. Sure, it is a hell of a mess at times, but how many of us rely on the Apache, PHP, and MySQL standards to do our work? In some cases, people who need regulation (read: consistent design standards) have managed to voluntarily organize themselves in order to get them.

It depends, a century and a half ago, both publicly funded and private railroads connected the two coasts of the US. The private routes made folks rich.

Heavily subsidized by the government, you know. And they paid it back, in part - the railroad barons were responsible for funding recovery from recession on at least one occasion, at the "request" of the President.