[nickik]

Its funny, whenever somebody makes a libertarian argument, somebody throws 'libertarian utopia' back. I don't believe in utopia, a libertarian system would not be perfect, misery and suffering will not be eliminated. Not everything you buy will be perfectly labeled. No libertarian I have ever met in my hole live believes the market/legal based system is perfect, just that it usually outperforms a regulatory system

> Or his incentive is to run a fly by night operation that shuts down before it can be sued.

So what, you manufacture 10 bottles of creme and then vanish into the shadows?

Companies have a huge intensive to stay, establish partnerships, branding, funding and so on.

Also, I think the idea of legal person has gone to far. Im not against the idea of big cooperations but the legal system has clearly gone to far into the direction of none accountability (something that was actually often the case in common law legal systems).

> Their replacement for the evil gubmint is a host of other bureaucracies (giant consumer groups, a bunch of non-profits doing testing, insurance for everything, etc.) that presumably will have many of the same pathologies as the gubmint.

I have nothing against big organisations per se. That has never been my criticism of regulatory agencies.

The groups have much more intensive to actually provide value because they relay on people to be their costumer. Also, you have pluralism, different groups have different demands.

I honestly only care if stuff is not poisonous, and Im happy to pay for the lowest level of testing. I however don't really care if the meat is actually beef, Im fine with horse as long as it is tasty.

Other people, like vegans are willing to pay way more for exact information.

How about a suggestion that can make both of use happy? We keep the FDA, they do everything the do now, only that other products can still be sold, but they need to have a reasonably BIG label on it, that they are not FDA approved. We put a tiny tax on all products actually approved by the FDA to fund the FDA.

This way we the people who care about the FDA fund it. If you are not happy with that, how about we fund 50% of the FDA that way and the other 50% threw taxes? How about if its still fully tax funded?

Would that not make everybody at least reasonably happy?

Historically such system usually prove that the state is not needed, and rather then excepting that the state monopolises it.

[alexose]

> Companies have a huge intensive to stay, establish partnerships, branding, funding and so on.

Companies have huge incentives to act altruistically, but individuals within those companies sometimes have huge incentives to maximize short-term profits.

There's an asymmetry in the way companies and their employees operate. Employees can endanger the life of the company at a negligible-- or even negative-- cost to themselves. It's why banking executives might reward the opening of millions of fraudulent accounts, for example.

I've yet to see an example of a company that can completely prevent this problem. Given the lack of evidence, I have to continue to believe in regulations that protect consumers.

[nickik]

But we are living in a system of literally exploding banking regulation. The amount of regulation bank have are so astronomically high that no human can actually read it. There are huge organisations that try to enforce these regulation but for some reason this does not solve the problem.

Each time there is a issue, there is a new movement for anther Basel. This time things will be different. But they are not. For some reason many people just keep yelling 'more regulation' without any evidence that they actually do or change much.

Yes, individuals do suboptimal things for the long term of the company, but I don't see a massive amount of cases were companies get created for a short time to defraud everybody and then leave. Every company has a intensive to set up a structure so that they can prevent this sort of stuff, its in the responsibility of the owner, who has the most to lose.

Interestingly enough Adam Smith had invested in a bank that went down. In this system you had companies with double exposure. That means that if you had a stock of a failing company you could lose the value of the stock plus pay that much into the bank.

This actually had the effect that banks when failing would try to fail early, now failing banks try to make high risk investments to get everything back and then ask for bailouts if it fails.

I would highly suggest you study historical bank systems. Compare the highly regulated US banking system (US banking was highly regulated from the very beginning, usually requiring a special charter, no branching and so on) to the hardly regulated banking system of Canada. During the Great Depression the US had about 3000 bank failures, Canada had 0-1 depending on how you count. Canada during that time did not have a central bank, but rather competitive note issue by a group of banks (the US had taxed this heavily during the Civil War and reduced it, then finally getting ride of it in 1913 with the Fed).

It must also be said that Canada suffered very heavily economically, but the banking system was stable. Canada was famed for its banking system on to this day have a far superior less regulated system. In the US many people actually wanted to adopt the Canadian unregulated system, but JPMorgan and friends did of course not want to lose their monopoly on the international market (small banks had to use a partner in New York).

You can also go back to England and Scotland. Scotland probably had the freest banking system that ever existed and it was one of the best performing system that we have historical evidence of.

[Ironchefpython]

> How about a suggestion that can make both of use happy? We keep the FDA, they do everything the do now, only that other products can still be sold, but they need to have a reasonably BIG label on it, that they are not FDA approved. We put a tiny tax on all products actually approved by the FDA to fund the FDA.

Sure, with two small changes. One, we make the FDA tax progressive. Use whatever argument you like to justify this, like rich people's lives are more valuable, and therefore they can pay more to stay alive, but the key is that everyone will buy into the system in a way that they can both afford, AND be emotionally invested in.

Second, all non-FDA labeled products will have a MASSIVE tax applied, to pay for the externalized costs of bad food, such as emergency room visits, death, sickness, etc.

Of course we need a state to enforce this system, and it won't work any better than the existing one, but hey, it's a market solution!

[nickik]

A fixed tax is already progressive since rich people consume far more, but I don't really care. Also the tax would be so small that it really would not matter (as long as many produces have this stamp). Only if nobody cares about the FDA it will be expensive.

> Second, all non-FDA labeled products will have a MASSIVE tax applied, to pay for the externalized costs of bad food, such as emergency room visits, death, sickness, etc.

That's another problem with government. Once it does everything, everything has effect on everything else. You can force any health measure on the population with the argument that others have to pay for you if you don't do something. You might as well require that everybody does mandatory sports and eat the state approved diet.

If you as a state want to make a commitment to universal health care then you have to accept people being people and doing unhealthy things. If you as a state don't want to do that, you have two options, don't do it or put a totalitarian policy state in place so people follow your rules.

Even so, there is no way to prove that these MASSIV externalisiere exist. That's simply your assertion. It could also be that these people are exactly the same on avg. It could be that because they abuse products they die faster and thus cost less money to the state.

> Of course we need a state to enforce this system, and it won't work any better than the existing one, but hey, it's a market solution!

You are contradicting yourself. Its not a market solution, its a state run system either way.

What this idea is about is testing if products that are not FDA approve really are worse in the longer term. Because if it turns out that it is the case that they are not, then we can just all agree to drop the FDA.

As long as the FDA has monopoly we have know way of knowing what there actual effects. Seems to me more people should care about stuff like that.

[generj]

> As long as the FDA has monopoly we have know way of knowing what there actual effects. Seems to me more people should care about stuff like that.

While we may not know exactly the actual effects of the FDA or any other governmental policy, we can have a pretty good idea. We do this via econometric analysis of countries with and without entities like the FDA. Ideally we can get time series data where a country created an FDA. We'd throw in a few control variables as well. Then we see the effects of the stuff like the FDA - and even if this isn't perfect, we'd know in general the likely effects of it.

The evidence shows that having an agency regulating drugs and food increases safety. For example, England had a massive issue with a drug which impacted their newborns. We didn't have the issue because the FDA rejected it for use.

>Even so, there is no way to prove that these MASSIV externalisiere exist Well, actually we can prove externalities exist via various quasi-experiments and math. That's kind of what economists do in order to justify intervening in a market. There are measurable externalities in healthcare - which are at least a certain size and probably larger.

Healthcare in general is interesting because of stuff like the herd effect. If someone takes a bunch of sub-par antibiotics and the bacteria they have evolve around that pill all of society is negatively impacted. The disease is more resistant (kills more people) and society needs to pay for a new antibiotic to be researched and produced. And we don't know what these potential adverse effects are initially - what if we accidentally expose a bacteria to enough weak anti-bacterial agents that it becomes immune and kills millions of people? What if a sub-par untested drug turns all of it's users into homicidal maniacs? Or, like England, we could have years of birth defects.

The companies usually don't know the risks either - because before the FDA medical tests were usually very rushed.

So, as a society we have two options to fix these externalities.

One was listed above: charge producers/consumers of poor drugs a tax equal to the costs they impose on society. The government would then redistribute the tax to injured parties. The problem here is in pricing the externaities properly. Also, how do we know what a poor drug is without testing them? We can't, so we'd have to tax all drugs the same. As a result, if we tax too high we have fewer drugs produced and society suffers. If we tax too low then bad drugs slip in and possibly we didn't guess the cost of compensating people properly. So we don't have enough to pay the widow of a man who took a pill and then died four minutes later.

The second option is to regulate away the possibility of poor drugs as much as is plausible. Here we don't need to guess at how much money the externalities would cost. We also don't need to figure out optimal tax rates to get new drugs produced. In the case of healthcare clearly regulation is the best way to deal with possible negative risks.

[skaplun]

When government isn't involved a "dysfunctional" organization will sell you air and tell you its medicine because there's no regulator checking him.

Its like people are aching to be poisoned and die

[nickik]

What what a insightful comment. Thanks for all your arguments.

[nommm-nommm]

It already pretty much happens with the supplement industry.

[nommm-nommm]

>Companies have a huge intensive to stay, establish partnerships, branding, funding and so on.

Fly by night operations are already a problem on Amazon. Sure actual companies have an incentive establish themselves but fly by night operations aren't actual companies, their business model is dump and run.

[nickik]

Sure. There will be problems with that, just as we have now.

There are ways we are already dealing with it, and we will continue to do so. I don't see what a state can do. If you want security always go to the same company that has done well by you in the paste.

It you want security you have to pay a little extra.

I don't see how a state can do more. If people are actually doing illegal stuff, then there is the policy, just as now.

[nommm-nommm]

Most purchases are one time. I'm not going to have an "aloe Vera gel company" that I trust. Even if I did I wouldn't know I could trust them, I only know what they tell me.

That does not even cover the problem of if "people only buy from established companies" then how does any company ever become established?

[logfromblammo]

One option would be to turn FDA-approved into a service mark. No product that has not passed FDA approval testing could bear the FDA's service mark.

This is in line with logos like the UL service mark or service marks indicating kosher products. Products that bear a service mark usually have to pay the mark owner a licensing fee for use of the mark, which may be partially recoverable with higher prices to the customer.

If people trust the FDA, they will look for their mark, and not buy products without it. Service mark counterfeiting would have to be dealt with through civil court cases.

This leaves the market open for a competitor to the FDA to service different consumer needs or for specific product categories.