[treprinum]

Friedman's assumption was that regulations work towards social/general good so a company can just focus on maximizing shareholder value within existing law and that combination would keep everything OK. However, in practice regulation was often faulty so the maximization of shareholder value often led to many negative internal and external effects. It's like applying machine learning trained at times of plenty to times of crisis.

[margalabargala]

Or more specifically, it assumes that those two systems remain completely separate from one another.

In reality, as the system for maximizing shareholder value can interact with the system creating the regulations. Thus:

> in practice regulation was often faulty

wasn't a coincidence of a situation, but rather was a direct result of the shareholder-value-maximizing machine working towards the removal of regulations that hindered shareholder value.

[robertlagrant]

This is a huge letting off the hook of the people who write the regulations. Companies always want regulations changed, because regulations are not handed down from on high as perfect stone tablets full of rules. They're sometimes bad. So there needs to be a mechanism by which companies lobby to have them changed.

If that is misused, the blame lies with the regulation writers. They get to take free money from people as taxes solely so they can be impartial and write good regulations. If they can't even do that, then why give them free money?

[margalabargala]

My intention is not to let regulation writers off the hook, but rather to share the blame between the regulation writers and the corporations that lobby to have regulations changed in a way that they know is bad for society but good for them.

Everybody hates corrupt government officials already, but as a society (in the US) we tend to handwave away companies doing destructive self-interested things as "oh of course they do that", when it's not actually something we need to tolerate.

Oil companies in the 70s knowing that they were causing global warming but engaging in a campaign to pretend that didn't exist? Should be jail for the regulation writers, and jail for the oil company execs who signed off on it.

The Sacklers pretending that their special opioids aren't addictive and causing the opioid crisis? Should be jail for the regulators they bribed, and jail for the people at the company who knew.

Cause the 2008 financial crisis by deliberately mis-grading subprime mortgages? Should be jail for everyone who let that fly.

[robertlagrant]

> but rather to share the blame between the regulation writers and the corporations that lobby to have regulations changed in a way that they know is bad for society but good for them.

That's interesting. Everywhere I read (including in HN comments) the focus is on lobbyists and not regulation writers. I've never read anyone ever put the blame on the people who were given free money from taxpayer pockets to be impartial experts, and only ever on people trying to advocate for their companies.

> as a society (in the US) we tend to handwave away companies doing destructive self-interested things as "oh of course they do that", when it's not actually something we need to tolerate

I don't believe "as a society" exists :-) It's one's perception of what happens, but wrapped in an impartial-sounding phrase. I've seen far more tolerance of regulation-writers than I would expect. And there is a clear difference between a company (legally) trying to change hearts and minds and regulation writers allowing their minds to be changed for perks.

> Oil companies in the 70s knowing that they were causing global warming but engaging in a campaign to pretend that didn't exist? Should be jail for the regulation writers, and jail for the oil company execs who signed off on it.

Oil companies don't have a legal responsibility to tell the truth about the climate, I think. Also, the understanding of climate has changed quite a lot since then, so even I might go easy on regulators in this instance.

> Cause the 2008 financial crisis by deliberately mis-grading subprime mortgages? Should be jail for everyone who let that fly.

This is a good example of regulation being to blame, though. You'd go to jail if you didn't allow a certain percentage of subprime mortgages[0].

[0] https://web.archive.org/web/20080928095759/http://www.invest...