I ask this because I am struck by how old-fashioned certain things are today:
-houses: if you want to build a house, you are regulated by local building codes. These often have the effect of discouraging new and innovative house designs. The fact is, we are building houses the same way we did in 1900=and I’m convinced that we could have much cheaper, better SF houses if these local codes were overturned.
-car designs: you know all of those neat-looking concept cars (that never make it to the showroom)? In many cases, innovative designs are held back by archaic regulations: case in point, headlights. We can now have bright, narrow-diameter headlamps-but the US Federal regulations on headlights dictate designs that go back to 1948
So, do regulatory bodies help or hinder progress-my feeling is, these bodies become corrupted by money and influence. The local building codes favor (guess who) the local builders, who want no competition! Should we scrap most regulatory bodies? Yes-we have something superior-the free market-people can choose what they want!
I ask this because I am struck by how old-fashioned certain things are today:
I don’t know…I do most of my work dealing with a regulatory body (the FCC), and, while I’ll curse it up and down for incompetence, I really don’t know that it would be possible to function without it. I mean, you need somebody to divide up the radio spectrum, and apportion and monitor it so that there isn’t interference. You need somebody to make sure everybody puts lights on their towers so that planes don’t crash into them. In a lot of ways, the FCC encourages progress, because it lets people build stations with the expectation that the frequencies they’re using will be protected.
Well, as with most things you have to weigh the good against the bad. For instance, most people agree that our society needs police protection even though abuses such as police brutality occur. The good of having police protection far outweighs the bad, and rather than throwing out the police altogether, we try figure out ways to reduce the negative consequences while still retaining the benefits. Even if we never fully eliminate brutality most people would agree that police are still necessary. The world is far from perfect and almost everything is a tradeoff.
So listing the negative aspects of regulation without considering the positive does not convince me that it should be eliminated. What good does regulation provide? Does the good outweigh the bad? How can regulatory bodies be modified to reduce their negative aspects?
This is the first time I have ever heard somebody make the statement that regulations tend to favor the company upon which they are imposed. You’ll need to come up with some examples wherein business benefit from being regulated if this debate is going to go anywhere. The whole purpose of regulations is to set some controls so (for example) builders can’t wire your house with aluminum wire (a fire hazard) just because it’s cheaper.
Regulations become a problem when taken to extremes, causing simple proceedures to become bogged-down in a sea of red tape. Therein lies the cornerstone of conservative views on big government (bad) and too much regulation (also bad).
But a reasonable level regulation is necessary for consumer protection. As Palmer said, there needs to be a comfortable medium.
Regulations always tend to be a little behind the state of the art. However, sometimes the latest whiz-bang gadget has hidden flaws that aren’t obvious when it is first used. Aluminum house wiring is a good example.
And of course it depends upon what kind of regulation we are talking about. The use of child labor resulted in lower manufacturing costs. Sometimes these costs were passed along in the form of lower cost to the consumer. More often they went to increase the profit of the owner of the business. Do you want the regulations regarding child labor abandoned so you can have a cheaper suit of clothes?
Do you want the regulations on workplace safety dropped so that people can run unsafe shops and throw the cost of taking care of the injured back on society as a whole as was the case in the 19th century?
Regulations don’t grow just because of a desire to regulate. They are in response to some abuse: filthy meat packers, child labor, unsafe vehicles, dishonest acounting practices, you name it.
Are they sometimes carried too far? Probably, but as others have said, a balance needs to be struck.
Your supposed “free market” doesn’t exist and never has. Those who pump loudest for a free market don’t want one. They really want a captive market for themselves. The laissez faire system was tried in the 19th century industrial revolution days and it didn’t work then either.
Sorry to interrupt for a moment, but
The round sealed-beam headlights with a(n approximately) 10 inch diameter bulb were the only things allowed on the road in the 1960s. I listened to lots of guys whine that U.S. laws were “stifling” innovation. Now we have all sorts of strange lights on our cars. With the exception of the HID bulbs, (that cost $200), on a few luxury cars, most of the headlamps give maybe 15% - 30% more light at only 400% - 700% of the cost of the old (and still available) 1960s bulbs.
That rant aside, where in the world do you get the notion that the lights on a Lexus or Beamer would meet 1948 regulations?
Can’t offer you a cite, but it seems to me this is pretty commonplace. Companies will accept all kinds of burdens if it puts even heavier burdens on their competitors. A specific example I recall is doctors - I remember reading a study a while back in which is was claimed that doctors are under-represented in the population based on efficient market theory, and the reason was that regulatory bodies like the College of Physicians and Surgeons were manipulating entry into the field.
Another example came from a project to build modular housing at I believe Stanford University. The project was deemed not commercially feasible because no one-size-fits-all solution could weave its way through the morass of building codes. One example was that there were a number of municipalities that required threaded pipe instead of press-fit PVC. It seemed that the regulation was in place for no reason but to ensure that a union plumber would have to attach pipes. In this case, press-fit pipes would make the job easier on the plumber, but it would also open the door to competition from other building methods, and also ensure more billable time.
I’m not sure I agree. Any of us over 30 probably remember how awful cordless phones were in the 70’s and 80’s. It wasn’t that the technology didn’t exist for longer transmitting phone (hell, digital spread spectrum was availbale for over 50 years) but it took the FCC over 3 decades to get it’s thumb out of it’s butt and finally allow use of higher frequencies, like 900mhz. Remember those weak walkie talkies you got as a kid? Now compare to the Family Radio Service radios available. Again, the technology was there, it just took the feds forever to decide to allow it to be used.
Sitting on something for years and decades, to me, is impeding progress.
pkbites, I don’t think anyone here is going to argue that instances of bureaucracy and red tape are good things. However, that’s not the only effect of regulation – that’s a drawback.
Companies simply are not acting for the good of the people. They are acting in order to gain a profit. (I am not saying that this is evil or anything along those lines – I am simply stating the facts.) Companies that do not make money will, eventually, fail. The government is there to regulate because companies simply cannot regulate themselves. The government is there, supposedly, to protect the interests of the people, to protect long-term interests (like the economy and the environment) that companies are not equipped to handle, and so on.
This takes the form of all sorts of things. Some actions are encouraged (by farm subsidies, for example); other actions discouraged (by regulations, laws, fines, liability). These are done in order to control companies by forcing them to see issues of societal good and other governmental interests in terms of profitability.
Is this always a good thing? No. The government has its hands in a huge variety of issues and not all organizations are well-run and nor do they always make good decisions. Yet, to simply throw regulations out – for not being “progressive” – would be foolish. Companies would then take things to the edge of profitability.
Look at the pharmaceutical companies, for example. If no FDA existed to regulate what sorts of drugs were being released, pharmaceutical companies would have a lot more leeway to release untested and potentially dangerous drugs (particularly if they felt that the profit to be made exceeded their liability). Testing a drug and moving it through the FDA costs a great deal of money which no company is going to spend altruistically. While some drugs that would save lives would be out faster (which is good), we would also get drugs with horrible long-term effects at the cost of human life and quality of life (which is bad).
We need regulatory bodies. I simply don’t believe our economy and our society could work without them.
Regulations certainly have impeded progress in in property-casualty insurance. (As others have said, that doesn’t mean the regulations were bad or not needed.)
E.g., the unregulated line of Inland Marine developed more varied of coverages, earlier than the regulated line of Fire Insurance did.