[Random_ernest]

> Even the example of hosting complexity being replaced by cloud companies seems kind of silly to me. Maybe that’s saving very small companies a sizable fraction of their engineering resources, but I really doubt it for medium or larger companies.

This might even lead to an _increase_ in demand for software engineering, since now small companies can write their own custom software cheaper and more reliable. It's called Jevons paradox.

[donw]

TIL https://en.wikipedia.org/wiki/Jevons_paradox

"In economics, the Jevons Paradox occurs when technological progress or government policy increases the efficiency with which a resource is used, but the rate of consumption of that resource rises due to increasing demand."

Only tangentially related to the thread: I'm struggling to think of how government policy might increase the efficiency with which a resource is used, other than by not existing in the first place.

So, an ask: any historical examples where government policy other than deregulation has increased the efficiency with which a resource is used?

[piva00]

Here in Sweden, government policies have enabled the larger cities to be optical fiber-wired with common infrastructure so multiple companies don't have to roll out their own, not only that, the larger program is to enable a completely connected Sweden [0].

Government policies are enabling better efficiency of optical fiber infrastructure usage, without requiring multiple vendors to do the most expensive and least rewarding part of servicing internet: digging trenches for wires.

[0] https://www.government.se/496173/contentassets/afe9f1cfeaac4...

[donw]

That's a good example -- and another "coordination problem" at that, which is one of the types of problems where appropriate government action may be the most efficient solution.

[donw]

Addendum: I'm seeing a common theme in the responses.

When there's a coordination problem, but the equilibria state is unsustainable (such as overfishing) or lower-value (imagine competing electric grids with different voltages and frequencies), then government regulation can be useful by either imposing unilateral costs, and/or by defining a common standard.

There is the issue of avoiding regulatory capture, but I suppose that's for another time. :)

[ajuc]

> So, an ask: any historical examples where government policy other than deregulation has increased the efficiency with which a resource is used?

EU banned selling incandescent light bulbs for one example. Which increased demand for LEDs, lowered their prices, and made people switch much faster.

Almost all countries have legislation that mandates fuel usage of passanger cars has to be at most X liters per 100 km. Or at least there's an incentive system with taxes and other bills.

There are minimal standards for thermal insulation of houses.

If you call clean air and clean water a resource then most environmental regulation count.

It's very common actually - it happens every time there's a tragedy of commons and government regulates it.

[donw]

> Almost all countries have legislation that mandates fuel usage of [sic] passanger cars has to be at most X liters per 100 km. Or at least there's an incentive system with taxes and other bills.

I'm not sure that's a great example. At least in the US, adoption of more fuel-efficient cars -- and the ascent of the Japanese motor industry -- started from the 1973 Oil Crisis, whereby oil prices skyrocketed due to a drop in supply.

American automakers had been shipping gas-guzzling land-yachts for years, but pricing changes drove consumers to buy fuel-efficient Japanese cars, where they stayed because Honda had invested in "customer service" and "building reliable cars that worked", whereas Chevrolet's R&D budget was divided between tail fins and finding new buckets of sand into which GM and UAW management could plunge their heads to pretend the rest of the planet didn't exist (to be fair, they're still really good at that).

[ajuc]

TBH American cars are still crazy inefficient from my (European) perspective :)

And oil prices are another way to regulate that. In my country oil price at the station is over 70% taxes.

[donw]

> TBH American cars are still crazy inefficient from my (European) perspective :)

Well, we can't all have Volkswagen do our emissions testing. :)

Why would you say "crazy inefficient"? I don't think that, say, a VW 1.8L is, practically speaking, any more or less efficient than a Ford or Toyota 1.8L. A Ford Focus gets comparable gas mileage to, say, a Golf or a Mazda3.

The Golf has a better interior, but will also fall apart much sooner -- VW in the US has a shockingly bad reputation for reliability and customer service. Which sucks, because I really prefer VW's design language to pretty much any other brand.

You might on average drive smaller cars in the cities, but that's more of a preference issue than

[bobthepanda]

One notable example I can think of is accessibility services.

In the US, public transit must accommodate the disabled, and for some types of trips or some types of disabilities there is a totally parallel transit system that involves specialized vehicles, operators, dispatchers to efficiently route vehicles, etc. It's also a massive PITA from the rider's POV, since you have to dial a call center to schedule a day in advance and you get a time window in which the driver will show up. This system dates from the '80s, before the Internet and before taxis were mandated to be accessible.

New York City tried a pilot program in which this system was replaced by subsidizing rideshare rides, since in the 21st century all taxis are required to have accommodations for the disabled anyways and you can leverage a well-tested system of ordering rides instantly and a large fleet of vehicles. While this did reduce per trip costs from $69 to $39, the increased convenience caused ridership to also skyrocket, so it ended up being a net drain on finances. [1] http://archive.is/N3DjJ

[lonelappde]

Also, scammers using VOIP (plus extremely sensitive ADA rules around treating disabled people nicely and never doubting people who claimed disability) ruined the deaf-serving text-to-telephone gateway. Fortunately that problem was mostly solved by the Internet mostly killing voice phone.

[donw]

That's a great example!

[bobthepanda]

Yeah, basically you would be looking for a government policy that would be making something cheaper, but also so wildly convenient that it ends up increasing usage faster than the savings.

Another example is the expansion of highways; if highways are free, expanding them to relieve traffic will generally cause car travel to go up as more trips become tolerable, and then the highway will be as congested as it was before. https://www.vox.com/2014/10/23/6994159/traffic-roads-induced...

[fnord123]

Consolidation of subway systems in London. Standardisation of rail gauges, screw threading, electrical outlets, phone networks. Basically standardisation of everything that just works and you don't notice.

Could go on... money, power grid, air traffic control, waste collection and disposal.

[SuoDuanDao]

Health insurance is a great example - a single payer system has much more bargaining power than everyone trying to negotiate for medical care at a moment when they'll die without it.

Of course, such a system is less efficient at extracting value from consumers, so I suppose your question requires an assumption as to whom a system is efficient for.

[donw]

> Health insurance is a great example - a single payer system has much more bargaining power than everyone trying to negotiate for medical care at a moment when they'll die without it.

Also not sure that's the best example.

Singapore, Japan, Germany, Switzerland... all of those are multi-payer, but tightly regulated (which imposes equal costs across all actors, so that's coordination once again).

And I'd have to dig out the article, but I believe the above model (Bismarck) is better at controlling costs, and produces more positive outcomes as well.

The US healthcare system is a mess for a lot of reasons.

Healthcare being tied to employment is probably the biggest.

Maybe the second is a lack of any sort of common healthcare market? You can't just take "any insurance" and go to "any doctor"; instead, you have to navigate a maze of in-and-out-of-network relationships. It's like scheduling an appointment with the Mafia: "My cousin's dog-sitter's best friend's uncle's pool-boy Vinny knows a guy that can take care of your headache."

The adversarial relationship between insurers, patients, and care providers is also a problem. Insurers work very hard to screw hospitals and patients, so hospitals have insane overhead costs to fight against the insurers, and patients... oh god, don't get me started there.

Regulatory capture also plays in. And there's more, but yeah, it's a mess.

[SuoDuanDao]

Fair enough, I mentioned single payer because that's the system I'm familiar with. The 'adversarial' relationship between insurers, hospitals, and patients is precisely the kind of market competition that theoretically leads to the best outcome though. GP's ask was simply about examples where regulation leads to more efficiency, it sounds like bismarck and single payer are both more regulated and more efficient (again, from the patient's perspective).

[mcv]

Health care. There, regulation makes it more accessible to more people, improves quality, and drives costs down. Deregulated health care systems are less reliable and more expensive. People who can afford it will pay anyway.

Public transport. It benefits society as a whole when people are able to move around, and if they can do so without causing massive traffic jams. Regulation, keeping prices low, and ensuring that even remote areas are reachable, make it attractive to use and will make it more usable to more people.

Labour in general; shorter work weeks and improved working conditions have improved productivity.

[saberdancer]

Not an expert, but I think this qualifies.

Government policy to improve energy efficiency (government grants to improve factory production efficiency) can lead to increase in total energy use as the factory is more profitable with better efficiency.

EU does have programs to improve efficiency in this manner.

[donw]

I suppose that would make sense if the government was solving a coordination problem?

E.g., no manufacturer will install Oliver's Optimizer, which promises a lifetime 10% savings in energy use, because it would force them to shut down operations for a month while the optimizer is installed, and put them at a disadvantage compared to other manufacturers.

By requiring the Optimizer (or equivalent) as a licensing requirement for factory operation, all manufacturers share the same burden, and thus suffer no relative disadvantage.

Is that the general idea? I'd be worried about regulatory capture in this case -- e.g., Oliver lobbying to force the market to install his Optimizer -- but that's an entirely different discussion. :)

[TeMPOraL]

I'd say, yes. You've correctly noticed in this subthread that government regulation is a solution to coordination problems. All kinds of situations that pattern-match to "it would be better if everyone were doing X, but X comes with some up-front costs, so whoever tries doing X first gets outcompeted by the rest" are unsolvable by the market (especially when coupled with "if everyone else is doing X, stopping doing X will save you money"); the important role of a government is then to force everyone to start doing that X at the same time and prevent them from backtracking.

To the extent you can imagine the market as a gradient descent optimization, coordination problems are where it gets stuck in a local minimum. A government intervention usually makes that local minimum stop being a minimum, thus giving the market a necessary shove to continue its gradient descent elsewhere.

[catlifeonmars]

> To the extent you can imagine the market as a gradient descent optimization, coordination problems are where it gets stuck in a local minimum.

I think this is a very appropriate analogy.

A thought: the cost function that the market minimizes is only a proxy for the various cost functions that we (humans) actually care about. I wonder how much (if any) “government inefficiency” is due to the mismatch between the market cost function and these other cost functions.

[TeMPOraL]

I don't know about inefficiency within the government, but I think most of regulating of markets happens because of it. As you've noticed, market's cost function is only an approximation of what we care about in aggregate. Regulation adds constraints and tweaks coefficients to keep the two goal functions aligned as much as possible. Which is hard, not least because we can't fully articulate what we care about, either individually or in aggregate.

[barrkel]

Standardisation generally increases market size which means efficiencies of scale and ability to buy the best stuff from anywhere in the larger market, rather than being stuck with local stuff that works with local standards.

Government isn't always required for standardisation but even when it's industry led, it feels like government because it's cooperative, which means committees, votes, etc.

[sobani]

> any historical examples where government policy other than deregulation has increased the efficiency with which a resource is used?

Not really an example, but any government policy that deals with a tragedy of the commons situation.

Take for example the NW Atlantic cod fishery: "In the summer of 1992, when the Northern Cod biomass fell to 1% of earlier levels [...]" [0] I'm sure that if Canada, the US and Greenland had come together and determined a fishing quota, those fishermen would still have a job today. Instead they were so 'efficient' that there was nothing left for them to catch.

[0] https://en.wikipedia.org/wiki/Collapse_of_the_Atlantic_north...

[bontaq]

> So, an ask: any historical examples where government policy other than deregulation has increased the efficiency with which a resource is used?

I would say there are examples around. For example, the numerous dams and levees we enjoy. Getting wrecked by a flood is not very efficient. Non-navigable rivers are not efficient.

[marcosdumay]

Jevon was working on fuel consumption. There has been plenty of government regulation that improved the (average) fuel efficiency of machines, even back then when they were steam powered.

[urxvtcd]

I'm not sure if that answers your question, but building wider, faster roads doesn't reduce traffic. People just drive more.

[mellavora]

your observation is correct, but perhaps not the conclusion? If more people are traveling over a given section of road per hour (as you imply), isn't that more "efficient"?

[ajuc]

The alternative is public transport or living closer to your work, both more efficient than everybody driving in their cars and waiting in the trafic.

Basically it's comfort vs efficiency, and people maximize their comfort within the acceptable traffic jams level.

[ComodoHacker]

Phone charging cables?

[mcv]

I certainly buy a lot of them. They keep breaking.

[AlexCoventry]

Fun fact about Jevons: He put forth one of the first prime factorization challenges.

https://en.wikipedia.org/wiki/William_Stanley_Jevons#Jevons'...