[nannePOPI]

Did you ever noticed that when it comes to protect a public official, for example a cop killing someone, all the State pieces work in perfect synchrony? I mean, everyone, from lawmakers, judges and the lowest of clerks suddently learn how to make exceptions and interpret the laws in new ways.

Yet, I have to believe that lawmakers aren't able to stop billionaires from screwing up the small guy without making complex regulations that impede progress and innovation, regulations that in the end make the rich and the bureaucrats a lot of money and sink hopes for the honest entrepeneur. I have to believe they're making the laws in good faith because they really have no alternative. Of course. I totally believe it.

[spaginal]

Regulations are written by very big companies in that space of the market. The EU isn't immune to this, and our government in the US definitely isn't. I know this seems counter intuitive to people not familiar with barriers to entry in industry, but big companies easily absorb costs in regulatory frameworks that are legally put into place. They normally lobby and ensure that whatever goes into effect is either something they are actively doing, or can do at minimal cost to them, while being a large cost to others.

A great example recently in the United States was in the Consumer Product Safety Improvement Act passed in 2008. It was in response to large toy makers using lead paint in their toys coming from China. It wasn't small toy makers doing this, it was the Mattels. As a result of what these large companies did with their disregard to product safety, a regulatory safety framework was put into place that Mattel could easily absorb into their operating costs, while small mom and pop makers suddenly had a very expensive process to go through, even if they were not the cause of how this law came into effect.

We can all agree on respecting privacy, toy safety, etc. It's a good thing. But just remember that usually these things are passed to protect large companies, not necessarily for the benefit of the consumer, and definitely not for young competitive companies trying to break into a market space that now has a huge initial cost that may be insurmountable. The result sold to the consumer is normally just a side effect used to promote it.

[waisbrot]

Is that a great example? If you gave Mattel the choice between absorbing a regulatory framework and just having extra money would they really have chosen the former?

You can pay for safety explicitly with regulation or implicitly with poisoned children. Regulation hits small businesses harder; rather than concluding that regulation sucks, maybe we should try something else like providing some publicly-funded office to provide compliance help to small businesses.

[Mirioron]

You will never get anywhere close to mitigating the harm that regulation does to innovation through something like that. Approach this from the perspective of UX design. The more barriers a user has to overcome the less likely they are to actually try the product. In this case the user would be a small entrepreneur trying something small. But a lot of businesses start out as something small. If they work then they grow, if they don't they go back to the drawing board. If you put barriers on the way of these people they often won't even try.

That doesn't mean it's impossible to start a business, but it does mean you'll get a lot less of them. A lot less of them also means less successful ones and less jobs.

[spaginal]

Or just allow the free market and our courts to punish the offenders when they do bad things. If Google and Facebook violate privacy, sue them. If Mattel caused harm, sue them. Get the information out there that the service is bad or the toy is unsafe and they will either fix the behavior or go away.

Regulations may or may not be necessary for certain things, but to fold everything in the market under some kind of regulatory framework where you need to go to government to get approval and navigate a burdensome bureacratic process basically just ensures that you will harm innovation, destroy small business, and protect legacy companies in the space.

[yuhong]

Part of the problem is that we have been running a trade deficit for decades in the first place.