Does Siemens or GE or any company with assets and a reputation longer than 5 years sell such a fuse? That would be an example of a market mechanism that doesn’t stop Amazon from selling it, but would help prevent savvy buyers from purchasing it.
An example of this working well, and better than the FDA, is the UL listing system. A UL listing is not required. So it’s not blocking innovation if the UL is slow to evaluate a product, or if a company is too small and is selling some unlisted products they just developed. An improved FDA would be unable to actually block a drug from being used, but would “share information” on what it knows, if anything, on a particular drug. An improved system for building codes would not block construction of a structure that passes engineering approval, but would allow nearby residents affected to sue for the loss of their sight lines, etc, that they object to, after the fact.
The NRC would not be able to block the construction of a nuclear plant if it can’t find any valid reason to deny a permit after some short period of time—same idea. Non blocking.
It’s the blocking property for regulations that is destructive. This is also why “AI pauses” are so destructive, they have this same extreme negative property.
Another similar issue is governments don’t have to pay the costs for their own wrong acts. For example, if a government chooses to block construction of an apartment building due to a missing environmental review, and later a judge determines that an environmental review was not required, the government shouldn’t enjoy “sovereign immunity” and should have to compensate the developer for all of the costs of this action. Probably they should have to pay it in escrow before blocking anything...
I think you’re making claims of facts that are based on counter-factuals. While I have some sympathy to the general idea that we’re in an over regulated time. I do like the idea of government and its agencies being more about reducing information and organizational costs to allow private individuals and groups to pool their resources to solve their own problems over it being the active principle in all such efforts.
I also agree that incentive structures here matter. Perhaps that type or rule requiring a set aside to escrow would make regulators more diligent in their evaluations—but could also just produce greater delays and be a bad unintended consequence. But clearly a place to spend mental efforts.
I also agree that the margins probably do need to shift some towards private (e.g., UL) rather then public mechanisms. However, I am also reminded of the critique Hal Varian made regarding the private solutions to supposed market failures documented in Tyler Cowan’s The Theory of Market Failure: they all seemed to include some government actions. The implication of your comment seems to be that we can get rid of all these agencies. I’m not sure on that point, I suspect some role remains even if we change the names for optics.
Regarding sovereign immunity, not all acts are protected and some areas the government and its agents only enjoy qualified immunity. So in your example I’m not certain that some compensation would not be supported by law. But the other twisty bit there is the government is not separate from you or me. Yes, the share we have to pay is small but in the end it is all of us who are paying. I suspect some in the local community or tax payers who see some of their money redirected to off-set the builder’s cost might question that as an unjust taking. Some might think the developer failed to perform sufficient due diligence before incurring all those costs. Just a counter hypothetical for consideration on this particular point. Largely just trying to point out that your approach is not clearly a parato improving move—or at least you’re not clearly identifying the side payments that would be made to accomplish that outcome.
I think the broader scope claim is that rapid progress requires mistakes. That all of China’s hastily built excess structures that have some quality issues that will cause problems for some of them, or the belching clouds of coal smoke, or all the people in the USA who were poisoned by leaded gasoline, may to some extent be a necessary sacrifice.
The eras when the most actual forward progress were made seem to have the most incidents like this. Today we have Teslas occasionally driving themselves out of control, or having component failures that legacy auto long since repaired. Or how AI models have all their faults.
I would suspect that excessively strict and arbitrary building codes/zoning are similar, that they kill more people from homelessness than are saved by a laxer system.
So that’s the tradeoff. Obviously you need government, but government agencies need to be somehow responsive to the total effect of it’s actions, not just it’s narrow domain. The NRC has to consider the coal pollution each requirement will cause, etc. Autonomous car regulators need to consider all the crashes a flawed autonomous car software stack will prevent, not just the few it will still cause.
Sovereign immunity happens to remove one of the feedback mechanisms.
Does Siemens or GE or any company with assets and a reputation longer than 5 years sell such a fuse? That would be an example of a market mechanism that doesn’t stop Amazon from selling it, but would help prevent savvy buyers from purchasing it.
What happened on Amazon is that items advertised as being sold by Amazon itself wouid turn out to be Chinese counterfeits. You could order a thingamajig made by Siemens and get something with the name “Siemens” on it that wasn’t actually made by Siemens.
This is what I’ve heard that Amazon did, and I don’t know whether or not they still do:
Amazon has a “Fulfilled by Amazon” service that third party sellers can use, in which they ship products to Amazon, and when someone orders the product from that seller, Amazon will then ship them the product. However, the Amazon warehouse doesn’t keep track of which seller sent in which item: if there are multiple sellers that use Fulfilled by Amazon to sell a Siemens Thingamajig, they all get marked with the same ID number and put in the same bin. If Amazon itself also sells Siemens Thingamajigs directly, its own stock gets put in the bin with the ones from third party sellers. So, if a third party seller opts to use “Fulfilled by Amazon” and ships Amazon a counterfeit Siemens Thingamajig, someone ordering a Siemens Thingamajig from Amazon directly could end up with the counterfeit that the third party seller had put up for sale.
Does Siemens or GE or any company with assets and a reputation longer than 5 years sell such a fuse? That would be an example of a market mechanism that doesn’t stop Amazon from selling it, but would help prevent savvy buyers from purchasing it.
An example of this working well, and better than the FDA, is the UL listing system. A UL listing is not required. So it’s not blocking innovation if the UL is slow to evaluate a product, or if a company is too small and is selling some unlisted products they just developed. An improved FDA would be unable to actually block a drug from being used, but would “share information” on what it knows, if anything, on a particular drug. An improved system for building codes would not block construction of a structure that passes engineering approval, but would allow nearby residents affected to sue for the loss of their sight lines, etc, that they object to, after the fact.
The NRC would not be able to block the construction of a nuclear plant if it can’t find any valid reason to deny a permit after some short period of time—same idea. Non blocking.
It’s the blocking property for regulations that is destructive. This is also why “AI pauses” are so destructive, they have this same extreme negative property.
Another similar issue is governments don’t have to pay the costs for their own wrong acts. For example, if a government chooses to block construction of an apartment building due to a missing environmental review, and later a judge determines that an environmental review was not required, the government shouldn’t enjoy “sovereign immunity” and should have to compensate the developer for all of the costs of this action. Probably they should have to pay it in escrow before blocking anything...
Same with FDA, same with all the other examples.
I think you’re making claims of facts that are based on counter-factuals. While I have some sympathy to the general idea that we’re in an over regulated time. I do like the idea of government and its agencies being more about reducing information and organizational costs to allow private individuals and groups to pool their resources to solve their own problems over it being the active principle in all such efforts.
I also agree that incentive structures here matter. Perhaps that type or rule requiring a set aside to escrow would make regulators more diligent in their evaluations—but could also just produce greater delays and be a bad unintended consequence. But clearly a place to spend mental efforts.
I also agree that the margins probably do need to shift some towards private (e.g., UL) rather then public mechanisms. However, I am also reminded of the critique Hal Varian made regarding the private solutions to supposed market failures documented in Tyler Cowan’s The Theory of Market Failure: they all seemed to include some government actions. The implication of your comment seems to be that we can get rid of all these agencies. I’m not sure on that point, I suspect some role remains even if we change the names for optics.
Regarding sovereign immunity, not all acts are protected and some areas the government and its agents only enjoy qualified immunity. So in your example I’m not certain that some compensation would not be supported by law. But the other twisty bit there is the government is not separate from you or me. Yes, the share we have to pay is small but in the end it is all of us who are paying. I suspect some in the local community or tax payers who see some of their money redirected to off-set the builder’s cost might question that as an unjust taking. Some might think the developer failed to perform sufficient due diligence before incurring all those costs. Just a counter hypothetical for consideration on this particular point. Largely just trying to point out that your approach is not clearly a parato improving move—or at least you’re not clearly identifying the side payments that would be made to accomplish that outcome.
I think the broader scope claim is that rapid progress requires mistakes. That all of China’s hastily built excess structures that have some quality issues that will cause problems for some of them, or the belching clouds of coal smoke, or all the people in the USA who were poisoned by leaded gasoline, may to some extent be a necessary sacrifice.
The eras when the most actual forward progress were made seem to have the most incidents like this. Today we have Teslas occasionally driving themselves out of control, or having component failures that legacy auto long since repaired. Or how AI models have all their faults.
It’s just a vibes thing, I don’t know an explicit way to prove this, but it certainly is suggestive, that the regulatory ratchet prevents negatives and also prevents the positives. And the positives can be enormous. For example if the NRC had less regulation, and a few hundred people had been exposed to radioactive releases and died, it might have prevented ~920,000 deaths over the last 40 years. https://www.hsph.harvard.edu/news/press-releases/particulate-pollution-from-coal-associated-with-double-the-risk-of-mortality-than-pm2-5-from-other-sources
I would suspect that excessively strict and arbitrary building codes/zoning are similar, that they kill more people from homelessness than are saved by a laxer system.
So that’s the tradeoff. Obviously you need government, but government agencies need to be somehow responsive to the total effect of it’s actions, not just it’s narrow domain. The NRC has to consider the coal pollution each requirement will cause, etc. Autonomous car regulators need to consider all the crashes a flawed autonomous car software stack will prevent, not just the few it will still cause.
Sovereign immunity happens to remove one of the feedback mechanisms.
What happened on Amazon is that items advertised as being sold by Amazon itself wouid turn out to be Chinese counterfeits. You could order a thingamajig made by Siemens and get something with the name “Siemens” on it that wasn’t actually made by Siemens.
This is what I’ve heard that Amazon did, and I don’t know whether or not they still do:
Amazon has a “Fulfilled by Amazon” service that third party sellers can use, in which they ship products to Amazon, and when someone orders the product from that seller, Amazon will then ship them the product. However, the Amazon warehouse doesn’t keep track of which seller sent in which item: if there are multiple sellers that use Fulfilled by Amazon to sell a Siemens Thingamajig, they all get marked with the same ID number and put in the same bin. If Amazon itself also sells Siemens Thingamajigs directly, its own stock gets put in the bin with the ones from third party sellers. So, if a third party seller opts to use “Fulfilled by Amazon” and ships Amazon a counterfeit Siemens Thingamajig, someone ordering a Siemens Thingamajig from Amazon directly could end up with the counterfeit that the third party seller had put up for sale.
And yeah, manufacturers have been suing Amazon over this.