[kjar]

If I interpreted this argument correctly - regulation is bad, costs money. How much is a human life worth? Clear to me is that Boeing did that sick math and rolled the dice and F’d up royally and fatally.

FAA was gamed, but If you think Boeing would self regulate, I think you are on a different timeline where stockholder dividends are not the prime directive.

[Mirioron]

I understood his argument as: regulation is rigid and some regulations end up pushing things towards a bad ending, because actors in the real world don't always do what regulators imagine they will do. Eg the total costs of recertifying the plane are so high that it's worth it (for the company) to roll the dice to avoid it.

[dmix]

This isn't about whether more or less regulations should exist or not, but how we can build better administrative systems. When the regulations create an environment where only one or two mega-companies like Boeing can exist, combined with pretty much any democratic system where said company can have a direct influence on both the regulatory agencies (often through staffing via knowledge gaps in industry/academia where those in the company often are the only ones who know enough to make the policy) and policy making itself by elected officials in favour of just the current company not the future.

Simply put, the definition of 'failure' of a regulation needs to be broadened. Regardless if it reduced deaths by the company itself in the near term, if it adds long term risk to deaths/accidents in the future by encouraging regulatory capture and eliminating any competition but Boeings to exist - we are worse off as a society, period. The only option we are allowing is some pseudo-market mega-corps with monopolies and the mediocrity in both service and safety or public gov run companies (which do make sense occasionally, but rarely).

There's a few solutions I can think of here which isn't "all regulation is bad" or "lets only have mega corporations in every market via poorly designed regulation" or "let gov nationalize the markets":

a) Contextual oversight. Allow a certain level of freedom at the lower tiers of markets so a future competitor to Boeing can exist and challenge them on everything from prices, to technology, customer service, and safety (which yes is a massive competitive advantage, ask all the people who now refuse to fly in Max, what other options do they have? A single European version of Boeing?). While allowing the courts to expunge any company that sacrifices on safety or any other externality via tort laws, liability, via stronger consumer and property rights.

b) Constant pressure on regulatory agencies (possibly by an outside agency) to look for regulatory capture within agencies and severely punish civil servants and companies engaged in any backroom deals, creating policy/incentives which are barriers for competition with little/zero benefit to citizens, punishing companies for obvious lapses, etc.

c) Stop politicians from anointing themselves job creators and promoters of businesses. They should strictly be in an administrative role when absolutely necessary (to eliminate any forms of violence, coercion, externalities that courts can't handle, etc). This is the biggest source of the worst of a) and b).

When politicians think their job is to 'create jobs' themselves by creating monetary/policy incentives for companies, this inherently create incentives for kickbacks to politicians and moral hazards for companies, and therefore should not be the job of politicians period. The only "help" to companies should be to help get out of the way by eliminating useless policy OR streamline necessary administrative systems. Otherwise don't help them at all.

Companies should not be able to buy success and maintain success in markets (by that I mean monetarily regardless of behaviour or outcomes) by having influence from politicians. All policy should be neutral of company size (or tiered based on size, the way modern rent control has tried to stop disincentivizing new lower income buildings by not applying to new developments) and factor in small firms who can't afford a team of lawyers or checkbox checkers.

[wbl]

Do you think Boeing owners would like it if no one bought Boeing planes because of safety concerns? Of course not.

[PeterStuer]

They might not 'like' it but they might not care enough as long as the stock goes up and the dividends keep flowing. The regulation should be there to prevent the erosion of certain boundaries, the eternalization of certain costs and the eventual public recovery of the profits.

Like most of the neoliberale 'economic theoretical models', the idea that the regulation is fully separated from the arena of the competition and thus cannot be captured and coopted is so ludicrous it begs the question how it ever became more than a joke in a b-list standup comedian's backup repertoire.

[wbl]

The dividends would not flow if no one ordered the plane.

[PeterStuer]

Planes are ordered because companies hope they can make a profit operating them (the hope is important, it does not necessarily mean they can). Which planes they order depends on many factors other than safety. Costs and risks of accidents are externalized through insurance, executive and shareholder indemnification and. as a last resort. bankruptcy. Then again, if they are seen as 'strategically relevant', or have the right connections, they can rest assured they will not have to pull in the 'last resort and will be bailed out of any troubles.

A German automaker was caught gassing the world population. They're still around, even having the audacity not to even change the brand name.