Thread: We Should Trust Business to Self-Regulate

The private sector self-regulates when market forces require it. However, that self-regulation is relative. If one company poisons 2% of its customers, it will lose market share to the company that poisons only 1%. But society doesn't want 1% poisoned! It wasn't as close to none as possible. So we impose regulations.

Now the spending program in question, does the program accomplish anything? Has food safety improved in the last 10 years due to the program's existence? If not, it should be eliminated, however noble its intentions.

Should we trust government to self-regulate? Should we trust government at all? Here's a tiny video clip of Dr. Murray Rothbard, once known to his fans as The Greatest Living Enemy of the State.
YouTube - ‪Rothbard teaching a class in the 70's‬‏

I do not understand the impulse to make statements that are clearly contradicted by real world events.

Businesses will self-regulate in their favor.

Originally Posted by jpn

Honest. That's what a Republican Congressman said.

The “private sector self-polices,” he said, so we need not worry too much about safeguards to protect the public.

That's why he believes that it would be a good idea to gut food-safety regulations.



These people are maniacs.

Here's the flip side...How do we go about holding government accountable when they fail to adequately regulate? Right now the people have legal recourse against a company that knowingly or negligently distributes a dangerous substance. If we decide to put the entire onus for product safety on government regulators then shouldn't there be some way extract some kind of recourse from the government regulators?

I seem to remember an egg recall last year where the inspectors just blew off absolutely hideous violations because "it wasn't in their job description" or some other equally as asinine excuse. The drilling of the Macondo well in the gulf was supposed to be regulated by the government and they failed there too.

Governments tend to enforce regulation based on political whims while industry tends to self-regulate based on individual economic whims. Government regulation tends to be broad and sweeping with tiny loopholes cut out for favored partners while industry self regulation tends to be more specifically oriented with certain broad parameters based on common experience. On the whole a self regulated industry should give the consumer more options but with an associated more varied risk. A government regulated industry will tend to give the consumer less options with any risk skewed toward what will benefit government. In both cases, as the level of regulation increases the available options tend to decrease.

On the whole, a self regulated industry should provide a more dynamic economy with the vast majority of risk being short term. A government regulated industry will likely be less dynamic but will also result in larger risk pools which will have more widespread effects when they adjust.

We've been down this road before, somewhat. While I am not a big fan of huge government regulations on business, there has to be some degree of reason. It does not have to be all or nothing, unfortunately this Jack Kingston is a moron for suggesting businesses can be fully trusted to govern themselves.

Originally Posted by Hoplite

I do not understand the impulse to make statements that are clearly contradicted by real world events.

Businesses will self-regulate in their favor.

If that self regulation in in the direction of non-sickness in customers, isn't that in the favor of business?

Not that I imagine all business is squared away enough to self regulate regardless of intentions.