Economic Threat: Legacy Industries With Bogus 'Safety' Claims To Stop More Efficient Competition
from the sound-familiar? dept
NPR’s Planet Money has started a sort of spin-off series which are direct interviews with smart people about the economy. Recently, it interviewed economist Raghuram Rajan, who is given credit as being one of the folks who accurately predicted the recent financial crisis. I’m always a little hesitant to give credit to people who “predict” financial upswings or downswings, because there’s usually some serious confirmation bias problems, but Rajan definitely did a good job of calling out some of the specifics of what was likely to happen and which, subsequently, did happen. He now has a new book called Fault Lines, which suggests that many of the bigger world trends that resulted in the financial crisis are still in place, and we may be facing an even larger financial crisis going forward, since we did little to fix these underlying “fault lines.” The first half of the interview is fascinating, discussing the political reality in the US that makes it nearly impossible to actually fix these problems.
However, the second half gets into a subject that is much closer to what we regularly discuss around here. In that part of the discussion, he points to certain economies that grew through the government pressuring local industry to focus on exports, with Japan being a key case study. However, he points out that by propping up a small group of these firms, it actually did great harm to local innovation and local economic efficiency. And then, at the end, he gives this example which should sound quite familiar:
Let me give an example: Japanese haircuts are extremely expensive. Part of the reason is productivity in the Japanese haircut sector is lower. So, an upstart comes up and says ‘I’m going to start offering cheaper haircuts.’ That’s the typical way that competition pushes down prices. If you have cheaper haircuts, more Japanese will go get haircuts, and there will be more activity in the haircutting sector and you will get growth there. Well, the startup provides cheaper haircuts, but the existing barbers get anxious, because they’ll have to cut prices and they’re perfectly happy where they are with fewer haircuts, but getting more per haircut.
And so the “barber’s guild” gets together and says: ‘This is terrible. You know, this practice of offering haircuts, we have to find a way to nip it in the bud.” And they have a brilliant idea. They say: “Well, offering haircuts without shampoos is un-hygienic. It’s a bad idea. So, we’re going to mandate that before every haircut, you have to offer a shampoo.” Well, the nice thing is that all of the existing barber shops are equipped with basins and so on where you can offer a shampoo. But that new startup, because it’s cutting costs and because it’s cutting frills, doesn’t have a basin where you can have a shampoo.
Well, in one stroke, in requiring a shampoo before a haircut, you’ve raised the cost of doing business for the startup. You’ve driven the startup to a corner. And, typically, they can’t compete any more. And you’ve preserved the way of life for the existing barbers. In the process, though, you’ve far fewer haircuts in Japan than if you’d allowed much more competition.
You can see this play out in many sectors: transport, retail, construction. Where a few incumbents sort of monopolize what’s going on and don’t allow the kind of growth that would allow Japan domestic sources of growth as distinct from the export-sources of growth, which it typically relies on.
This is such a key point that gets overlooked in so many discussions, but is really the key theme about a very large percentage of posts on this site: recognizing the difference between real economic growth that comes from innovation that leads to a greater actual market size, and fake economic growth that comes from just the process of moving money around.
But that story of the Japanese barbershop sounds pretty damn familiar, right? It’s the same story we just heard about hotels in New York trying to outlaw couch surfing. Or, as someone on Twitter referred to it: “Home sleeping is killing hotels.” Or the story of a online carpooling efforts sued and fined for competing with the local bus company.
What’s impressive, of course, is how the incumbents are almost always able to hinder the more economically efficient solutions — the innovations that actually lead to real growth in the market — by couching it in terms that make them look like they’re being altruistic. In the Japanese haircut examples, it was about hygiene. In the stories about couch surfing and carpooling, it’s about “safety.” With the music and movie industries shutting down more efficient tools for distribution and promotion, it’s about “protecting creators’ rights.” Of course, none of these are true. They’re all just efforts to protect incumbent monopoly rents, so that they can be less efficient, collect more direct profit, but hold back overall economic growth and consumer surplus.
I think it’s important to start calling out these sorts of ploys. Perhaps we should refer to them as “home sleeping is killing hotels” arguments, and point folks to Dan Bull’s song on the subject:
Filed Under: economics, guilds, planet money, protectionism, raghuram rajan, regulatory capture
Comments on “Economic Threat: Legacy Industries With Bogus 'Safety' Claims To Stop More Efficient Competition”
Awesomesauce!
We need more posts that end with a Dan Bull song.
Re: Awesomesauce!
We need more posts that end with a Dan Bull song.
Will see what I can do…
Re: Awesomesauce!
I second this notion.
Any reasonable person can see that nothing has changed and things will be repeated in the future.
The thing is unreasonable greed, blinds people to what needs to be done and unless the public wake up they are the ones that will suffer the brunt of it.
I’m not going to have problems, I have a garden that I can produce food(and I get good at it every year) for myself and my family, I know how to produce my own energy from gasifying trash which I have plenty so I wonder how others will fare when things comes down and another economic crisis comes or a health crisis or a natural disaster are people planing for the future or are they letting their future in the hands of incompetent politicians and greedy corporations?
Are people going to be shmoe’s and keep paying for security they are never going to get?
The government already told people in no uncertain terms that the 401K will be cut, remember that money that you supposedly had to save all your life to paid for your retirement, so now they are saying they spend it all and that money is gone and they don’t know how to repay it and you will have to foot the bill again, I never paid that thing so I’m not counting on it to make my life easier.
Healthcare, wouldn’t be more cheap and better to pay each month for a community hospital? You need to pay it anyway, what if we had community hospitals all over the U.S. that are not controlled by the government but by local communities, would they still sell the people to insurance companies? would they lobby congress for anti-patient legislation or would they stand behind the working class asking for better ways to create as many jobs as possible as they know their funding comes from the people who live in their communities?
We are all responsible for our environment, economic environment, health environment, food supply and other things, till when people will let other decide for them what is better and start doing something about it?
What I really would want to see is a legislation draft done by the people and hand it over to those politicians.
That would send a clear message, “we the people want this yesterday!”
We can do it, why are we not organizing?
Where are those laws we want changed?
How a good law would look like?
Once we have a draft we can put there outside for the people to decide.
If we can’t do it we are destined to be slaves of others forever.
Re: Re:
Wow! Grassroots democracy! Exactly the kind of thing that got gay marriage banned in California! Because the peepul are always right!
HM
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So because you disagree with the outcome, the entire process is wrong? As someone who is heterosexual and unmarried (and not looking to be anytime soon), gay marriage is something I don’t care about one way or another. Neither is traditional marriage. However, the people decided that they did not want it there, started a campaign, and voted it down. No gay marriage for now. Would you rather just have a king deciding what is best for the country and handing down proclamations? Or would you really only like that when you disagree with the outcome of a particular vote?
You, sir, are a shallow and short sighted idiot. Just because you were on the losing side in that battle doesn’t mean the whole process is asinine.
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I’m pretty apathetic about the whole issue in California but there is a problem when a “Tyranny by the Majority” issue when you start working with popular votes.
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No system is perfect, but most democratic countries seem to be dealing with this “problem” quite well historically. Other systems seem to have a much larger threat of Tyranny by the minority. A larger problem with democracy I think comes when you have large masses with no education or concept of the issues who are easily manipulated by a few well placed fanatics.
Anyway, if you don’t like the idea of democracy, just support the *IAA they are making great strides towards overcoming it.
Is it so bad if the business goes to other countries?
If pure competition is good, and some of the policies in local economies or national economies result in business going elsewhere, isn’t that fine in the greater scheme of things?
Isn’t it rather Darwinian (in a positive sense) to encourage the success of the strong economies over the weak economies?
So if China, for example, ends up being the economic engine of the world, isn’t that the way it’s supposed to work?
Similarly, in the long run, if hotels are too expensive in NYC, maybe some other location will benefit, right? All to the good, in the end, I would think.
Re: Is it so bad if the business goes to other countries?
If companies can influence the rules (even to the point of influencing the laws in other countries these days), the playing field is no longer level. We no longer have proper competition. As an extreme example, the hotels in NYC just make it illegal for any other hotels anywhere to undercut them and continue to change the laws to prevent any other new competition. We end up with corporal Tyranny instead of competition.
“Perhaps we should refer to them as “home sleeping is killing hotels” arguments” – this line explains why you get everything backwards mike. home sleeping is the norm, hotels are the exceptional luxury. home made music is not the norm. most people dont sit around and play piano for themselves. they listen to music others have produced and enjoy it.
when you get the simple stuff wrong, its nor shocking when you really punt the big stuff.
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How do you manage to do that? Say stuff without actually saying anything at all? Are you a robot?
Re: Re: Re:
“Are you a robot?”
Just a Troll and a Shill.
Re: the guy who claims we've got an "everything backwards mike" around here
Yeah, we’re all home sleepers buddy, but you obviously haven’t been paying attention.
The argument that guests in NYC should not be allowed to sleep in private homes is precisely what is being debated right now in the New York state legislature this very week. Homeowners turning themselves into little B & B’s is seen as a great threat by the hotel industry.
Even though it really isn’t much of a threat at all, its existence creates enough concern to get their lobbyists out to Albany to drum up new laws and regulation.
One of the recurring themes here is that oligopolists and monopolists seek to manipulate government to create laws that will obliterate new innovations. These folks love to talk the talk of free enterprise and capitalism, but they conveniently forget that capitalism does not work at all without competition. They become beggars and bribers for government handouts in the form of rubber stamps on laws they had their own lobbyists write, delivered by politicians whose campaigns they financed. Such laws serve no higher purpose than to restrict competition, even if the nominal purpose claimed in their press releases is something else, health and safety, for example.
Monopoly sees innovation as a threat to established cash-flow, rather than the path to new opportunities.
Re: Re: the guy who claims we've got an "everything backwards mike" around here
“The argument that guests in NYC should not be allowed to sleep in private homes is precisely what is being debated right now in the New York state legislature this very week.” – phil, if they were turning themselves into little b&bs and actually following the laws, there would be less issue. instead, what they are trying to do is get into the extremely short term rental business without conforming to all of those laws. heck, how many of these people do you think have set up a business, are actually declaring the income, etc?
the government, as elected by the people, has over the hundreds of years of american existence, put in place rules regarding hotels, b&bs, hostels, and other sorts of accommodations. there are safety regs, fire code, taxes, zoning, and all other sorts of rules that exist. they are not created randomly. all that was being done in the legislature was either to bind them to these rules (which would put all of them out of business directly) or require a minimum rental time, which would push them into a more standard residental rental scheme.
hotels are (in many places) limited to a maximum of 30 days by law, as more than 30 days would move them into a residental situation and the laws of residental rents would apply.
i know this is all very complex, but it is the way the rules are set up. it didnt happen randomly, it didnt happen by accident, it has built up over the years to this, in order to protect the people, the local residence, etc. nobody wants a hotel (or flop house) opening up next door to them in quiet neighborhood.
techdirt never ceases to amaze me. no end of people who have never operated a business, never actually had to deal with anything outside of textbooks or mom. it is truly mind boggling, like pigeons debating shakespeare.
Re: Re: Re: the guy who claims we've got an "everything backwards mike" around here
I happen to see this yesterday.
Bringing down the house | Coloradan: “Illustrative of Bilham’s research is the contrast in loss of life between Chile’s 8.8 earthquake on Feb. 27 that was 500 times stronger than Haiti’s 7.0 on Jan. 12. Haiti suffered more than 230,000 deaths, while Chile’s quake killed about 500.
Bilham emphasizes that quake devastation casts a global burden that could be ‘significantly reduced’? with minimal construction guidelines. Eighty-five percent of all deaths from earthquakes occur from Spain to Indonesia, and every house in that belt needs resistance, he says.”
________
So he is saying that unsafe buildings are causing unnecessary deaths.
So where do you draw the line? In some countries perhaps loss of life is an appropriate cost of doing business. In other countries they may have many regulations to insure, perhaps overinsure, safety.
I’m asking that if you believe in competition, do you also accept the fact that what is acceptable in one country may be different than what is acceptable in another country?
Re: Re: Re: the guy who claims we've got an "everything backwards mike" around here
“if they were turning themselves into little b&bs and actually following the laws, there would be less issue. instead, what they are trying to do is get into the extremely short term rental business without conforming to all of those laws.”
If this were the case then there would be no need for the hotels et al to require the laws to change to ban the practice altogether. The reason that they want the laws to change is because the previous laws did allow for this sort of competition to exist. and banning the practice is different than requiring them to follow regulations, the hotels want to ban the practice altogether. This is nothing more than a nefarious attempt to reduce competition and you know it.
Re: Re: Re: the guy who claims we've got an "everything backwards mike" around here
“the government, as elected by the people, has over the hundreds of years of american existence, put in place rules regarding hotels, b&bs, hostels, and other sorts of accommodations. there are safety regs, fire code, taxes, zoning, and all other sorts of rules that exist.”
and no one is protesting these rules. Houses have building codes just as well and if those building codes are good enough for residents to live in those houses they’re good enough for guests. The laws put in place for hundreds of years were perfectly fine, it’s the new laws that these hotels want to enact that we are protesting. and there is no grass roots program by the people trying to require these laws, it is the hotels which do not represent the people lobbying for them. If the public doesn’t like it they can simply not spend the night at residential houses. and why should the house be safe only if you’re staying over 30 days and not under? How does that even make sense. These laws are nefarious.
In the mean time cigarettes are legal and they kill how many people a year? Consumer choice and individual freedoms only when it benefits big corporations.
“they are not created randomly. “
The new laws are created to only to serve special interest groups. No one said it was random.
“all that was being done in the legislature was either to bind them to these rules (which would put all of them out of business directly) or require a minimum rental time, which would push them into a more standard residental rental scheme.”
and that’s a lot being done, none of which has anything to do with safety.
“i know this is all very complex”
This isn’t a matter of complexity, it’s a matter of stupidity. Stop acting like you are so unsophisticated that concepts everyone else considers simple to you are complicated for you. I don’t buy the argument that you are that dumb. There is nothing complex here beyond anyone’s ability to very easily understand.
“nobody wants a hotel (or flop house) opening up next door to them in quiet neighborhood. “
Putting a capacity limit on how many people can stay at a house (ie: I wouldn’t want 100 people in a one bedroom house) at a time is different than banning the practice altogether.
“techdirt never ceases to amaze me.”
TAM never ceases to amaze me.
“no end of people who have never operated a business, never actually had to deal with anything outside of textbooks or mom. it is truly mind boggling, like pigeons debating shakespeare.”
You’re just a lawyer, lawyers don’t operate businesses, they litigate. and your level of stupidity and self contradiction is unmatched by anyone here.
Re: Re: Re:2 the guy who claims we've got an "everything backwards mike" around here
Oh, and while we’re at it lets also ban cars because they also pose a potential risk.
Re: Re: Re: the guy who claims we've got an "everything backwards mike" around here
“the government, as elected by the people, has over the hundreds of years of american existence, put in place rules regarding hotels, b&bs, hostels, and other sorts of accommodations.”
I highly doubt that most Americans approve of 95 year copy protection lengths yet those laws got enacted, not because of some grass roots effort but only because of corporate efforts. So clearly laws do get enacted that are not in the public interest and are against the public consensus (or would be if the public were more aware of them).
Re: Re: the guy who claims we've got an "everything backwards mike" around here
> Homeowners turning themselves into little B & B’s is seen as a great
> threat by the hotel industry.
It’s not the hotel industry that’s most concerned. It’s the government losing out on all that tax revenue that’s fueling this.
Re: Re: Re: the guy who claims we've got an "everything backwards mike" around here
This is probably part of the issue as well.
If that’s the problem then the government should collect taxes from everyone who rents out their house for under 30 days. After all, isn’t that already the case for over 30 days. There is no tax immunity for those who rent out their house for under 30 days whereby they don’t have to pay any taxes on that revenue. However, I can see how a lot of revenue could slip under the table but I hardly see that as an excuse to ban the practice. Revenue can slip under the table just as well if you were renting for over 30 days just as well, though I can see how it can be slightly more difficult if there were set periods in place (ie: makes it slightly easier to audit). and I can understand how tax evasion could be somewhat more difficult for a big business to get away with but that’s still no excuse to artificially eliminate smaller businesses and individuals from conducting business.
The fact that people can evade taxes is no reason to ban businesses. Otherwise no business can exist.
and the hotel industry is concerned and politicians are afraid that this industry will stop contributing campaign dollars towards them and/or start contributing campaign dollars towards competitors, making it harder to get re – elected.
Re: Re: Re:2 the guy who claims we've got an "everything backwards mike" around here
Rent the property out as a short term time share.
Ooops loop hole …. I hate when that happens.
Re: Re:
home made music is not the norm. most people dont sit around and play piano for themselves. they listen to music others have produced and enjoy it.
Looking at the past and you are wrong. Look at the future and you will be wrong too. The era of mass produced recorded music is a brief interlude in human history that will soon be swept away – and it will be a good thing.
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i would disagree. first, we have no way to see the future. but we can look at history (last couple of hundred years) and realize that people have come to enjoy music in their life at different times, from driving in their car to working out at the gym in the current times, to in the evening at home enjoying a phonograph or a radio program from the grand old opry.
music has become a more and more integrated part of our lives, we buy machines to play our music all over, wear headsets and buy tricked out stereos for our cars.
do you really, really think we will ditch all that and start carrying around a guitar to pluck on the bus on the way to work or a harmonica to play as we do our workout at the gym?
i would say the only thing being swept away is your logic at this point. the trends are clear, and there is no indication that the trend is heading in the other direction. the public consumption / enjoyment of recorded music is at an all time high and growing, not shrinking.
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History is cool and it repeats it self.
” we have no way to see the future. but we can look at history (last couple of hundred years) … “
You are right there is no way to see the future, there is however the ability to predict what is coming numerically. These are called trends. The trends are that everything is becoming more individually targeted. Including music. Currently this is a blip statistically. This is how all disruptive technologies and catastrophic failures begin.
“music has become a more and more integrated part of our lives, we buy machines to play our music all over, wear headsets and buy tricked out stereos for our cars.”
To use your own words … People only listen to music …
“driving in their car to working out at the gym in the current times”
The last time I heard someone playing music at home was 2 or 3 years ago. It is not all that important to people. The way you talk about it smacks of desperation, of trying to convince yourself and others that it has meaning in peoples lives. To some it might, to most its just back ground noise.
” the public consumption / enjoyment of recorded music is at an all time high and growing, not shrinking.”
The infringing downloading of music is at an all time high. But the quantity of music downloaded and the music listened to are two different things. The money taken in through concerts has increased but so have the ticket prices.
What you seem to think is an increase in consuption is hidden behind a wall of false indicators. The music industry is actually shrinking even if the money coming in is increasing.
Re: Re: Re:2 Re:
you are ignoring reality.
“The infringing downloading of music is at an all time high. But the quantity of music downloaded and the music listened to are two different things. The money taken in through concerts has increased but so have the ticket prices. ” – you are trying to fix together too unrelated things here. music consumption (as a recorded product) is at an all time high. more people with ipods, mp3 players, great stereos in the car, great speakers (and headphone jacks) on their computers and laptops, more chances, more options, and more opportunities to enjoy recorded music, and they do.
“The last time I heard someone playing music at home was 2 or 3 years ago.” – you need to get out more. plenty of people play music at home every day without even thinking about it, from checking out videos on youtube to their clock radio / alarm in the morning. tons and tons of people have bought various ipod docks and whatnot to enjoy their stored music at home, and heck, almost every hotel i have been in during the last few years has some sort of music dock or cd player in the room.
“You are right there is no way to see the future, there is however the ability to predict what is coming numerically. These are called trends. The trends are that everything is becoming more individually targeted. Including music. Currently this is a blip statistically. This is how all disruptive technologies and catastrophic failures begin.
” -this is probably your biggest mistake. previous to this “blip” there was no simple way to record or share music. for the purposes of discussion, everything before the invention of the phonograph is pretty much a non-indicator, because disruptive technology came along and made recorded music easy to obtain, to enjoy over and over again, to carry with you, etc. over the years, consumption of music (what is listened to, regardless of source) has continued to go up and up. what disruptive technology are you suggesting that would suddenly get everyone to toss out their ipods and refuse to buy cell phones with mp3 players in them? what is happening that will suddenly make the car stereo a thing of the past?
i think you are seeing what you want to see and projecting your personal preferences onto the deal without considering what is really shown by the trends.
if anything, the disruptive technology appears to be able to record all of those concerts and make them available for people to enjoy as recorded music over and over again. if anything, the current trend of increasing concert sales appears to be the blip, already coming down as major concerts are canceled and fans raise a ruckus over huge price increases in tickets. there is little proof that more concert tickets are being sold, just that more income is coming in. can you say short term blip? by your own logic, this is the case.
Re: Re: Re:3 Re:
i think you are seeing what you want to see and projecting your personal preferences onto the deal without considering what is really shown by the trends.
THAT’S WHAT YOU’RE DOING!?!
Re: Re: Re:4 Re:
nope. i have only the facts on my side. sorry troll you failed.
Re: Re: Re:5 Re:
Nope. You’re not the only one with facts on your side. Sorry shill/troll you failed, yet again.
Re: Re:
As usual:
point
your head
Re: Re:
Nice try, I do not sleep in a ‘home’ when I travel. Keep trying to twist the facts. You think the corporations you support will be there to protect you?
Do the Japanese - as a group - need to cut their hair
more frequently, with or without it being washed first ? Is offering an option for them to get their hair cut without its being washed really to be regarded as «innovation» and would the increase in number of haircuts per capita per annum that presumably would ensue (no evidence for this proposition is presented ; it is merely assumed as corresponding to the received economic dictum, itself unproved, to the effect that lower-priced services will always be more frequently employed, whether or no they are needed) constitute «real economic growth» (Mike’s italics) ? But Professor Rajan’s not particularly original argument will no doubt be echoed by those who feel that requirements regarding hygiene, worker safety, fuel efficiency, minimum wages, etc are simply devices for preventing the economy from performing its task of producing goods at the cheapest price possible (which is done by externalising social costs to the maximum extent possible). Regulations can be – and are – certainly used to preserve existing inefficiencies to the benefit of current producers, but this is not to say that a society in which economic activity is subject to no regulation at all would be an improvement. I’m not sure Mike would really care to live in such a society ; Adam Smith certainly didn’t recommend it and I know I shouldn’t care for it either….
Henri
Why not call this "guild socialism", or neo-feudalism?
Or crony capitalism. By using existing terms, you’ll be more easily understood.
Now, a vastly more important point is overlooked: “economies that grew through the government pressuring local industry to focus on exports”, means that the *national* economy *did* grow under pressure! — I’m not advocating central control, but just look at the implications. My views began changing when I noted that Russia went from a backwards monarchy in 1917 to a global power that, at least militarily, rivaled the US by 1948, despite cruel oppression, deliberate starvation, and losing more people in WW2 than all others combined. — How can that be true? — Easy: importing *knowledge*. The bad part is that *military* knowledge is the easiest to get and use, and it’s *effective* when used correctly.
So what does this have to do with the topic? — The methods outlined above *scale* up well. Your attention is on the fine points of haircuts while The Rich are an incomparably greater threat to everyone, and they need a “haircut from the neck up” before they break *every* bit of civilization.
Singing and Dancing around the real problem
As usual, when I hear things like this, I find myself wondering why everyone is up in arms about the way things are. If you look at the situation you will see that laws are passed by politicians looking to curry favor with those with influence (A.K.A. money). The motivation for these politicians is that that favor will translate in those influential people (A.K.A. companies) will donate funds and publicly support the politician.
If you want to reduce the number of protectionists ideas, the simplest way to do that would be to eliminate money from politics. How this is done, is simple, make all political speech free speech. No flashy ads, just the individual candidate speaking directly to the people. Do not allow for any funds from corporations, or other artificial people to be donated to the campaign. Only allow an individual, an actual living person, to make donations.
Of course getting there from where we are may seem insurmountable, and most likely won’t happen because there is no incentive for those with influence and those who need to curry influence to change the way things are much. But there is a need for individuals to change the way things are. And when individuals act together, we can stand up for what is right. And as a united people we are a formidable force that can overcome those who want to put their organization’s interests over our self-interests.
Cars
Just look at cars. Requirements for things like brake lights, turn signals, seat belts, air bags and soft materials on the interior are killing the automotive industry. It is impossible for an innovative startup like Tesla to break into the market and compete. We need to eliminate all laws and regulations, we need to have a complete free for all market. Because the most important thing above all is economic growth. There are no benefits of any kind to society other than economic growth.
Re: Cars
The same thing with food. Should we let the people themselves be test cases? If someone drops dead, THEN we know not to buy food from that person/company anymore?
Re: Cars
Many American car makers were innovative startups before those things were mandatory.
Re: Re: Cars
But having safety features mandatory is not preventing innovative startups from entering the market and competing. Where does one draw the line between an actual safety claim and a bogus safety claim? Some would argue that air bags do more harm than good. Air bags might be a bogus safety claim, yet that is not stopping new entrants in the market. Some businesses are just expensive to start, like an automotive manufacturer, some businesses are cheap to start, like a software company. There are many, many barriers to entering any market. There are very few areas where bogus safety claims simply cost too much to get started, where bogus safety claims cost more than the actual safety claims to get into the same market.
Re: Cars
Those safety features are a small part of a price included over many units. The example used “Shampoo Basin” was a targeted feature that the target did not have. It’s like Chrysler seeing Honda doesn’t have a 10 ton widget that helps brace the assembly line up above and beyond the standard architectural design required and then lobbying congress to mandate that 10 ton widget, but being we live with patents Chrysler would have the patent on the 10 ton widget and dictate the license fee on the widget high against Honda but doing so would raise the bar substantially against startups.
Re: Re: Cars
“Those safety features are a small part of a price included over many units. The example used “Shampoo Basin” was a targeted feature that the target did not have.”
Have you heard of Tesla Motors? They had to buy equipment or outsource it to meet safety regulations. Those investments in your business are paid for with each unit sold, whether the units are washes/haircuts or cars. It is the exact same thing with shampoo basins.
Re: Re: Re: Cars
Have you heard of Tesla Motors? They had to buy equipment or outsource it to meet safety regulations. Those investments in your business are paid for with each unit sold, whether the units are washes/haircuts or cars.
But those features weren’t advocated by the car companies to keep out start up companies. The car companies have been fighting the regulations that California has required them to have.
Established auto companies have not been in favor for any of the safety features they have been required to add. So it isn’t like established companies setting up standards to discourage competition. If that were the case, we would have had Detroit slapping on safety features years before the Japanese cars got established in the US. In fact it was the reverse. The established car companies were slow to adopt them and only did when forced to do so.
Re: Cars
Just look at cars. Requirements for things like brake lights, turn signals, seat belts, air bags and soft materials on the interior are killing the automotive industry. It is impossible for an innovative startup like Tesla to break into the market and compete. We need to eliminate all laws and regulations, we need to have a complete free for all market. Because the most important thing above all is economic growth. There are no benefits of any kind to society other than economic growth.
Ah, the strawmen. No one said that no safety regulations make sense. Just that industries often use bogus safety regulations to make life harder for startup competitors.
Re: Re: Cars
Where does one draw the line between bogus safety regulations and real/actual/necessary safety regulations?
Bogus safety regulations are few and far between and probably look more like any other cost of doing business for a given industry.
You always exclusively seem to focus on economic growth. There are benefits to society that do not produce economic growth.
Re: Re: Re: Cars
There are benefits to society that do not produce economic growth.
Yes, I think some of us agree with this.
I honestly don’t have a strong bias for or against IP protection. My goal is see the best quality of life for the most people.
I’m looking for those discussions which head us in that direction. I jump in here when I see something is presented as black-and-white when I don’t think it is.
I live in a town which has some regulations which are perceived as anti-growth. But those same regulations have made it a highly desirable place to live and property values reflect that. What one town might consider to be too much regulation might be perceived by another town as preserving the quality of life.
Re: Re: Re:2 Cars
You jump in here to misrepresent things, that is what you do.
Guilds
Guilds, unions or whatever you want to call them have always existed for one purpose…to hold the status quo. That is, limit the market to its liking. In some cases it has been a necessary evil such as at the turn of the century, 19th to 20th, when it was common practice to work people to death for paltry wages. Unions put an end to that or a least most of it. However, we will never be free of groups trying to manage the market for their own self interest as no one wants truly free markets. Human greed will out!
1980's perspective...
Compliments of Bow Wow Wow:
Video: http://www.dailymotion.com/video/x1nd9h_c30-c60-c90-go_creation
Lyrics: http://www.metrolyrics.com/c30-c60-c90-go-lyrics-bow-wow-wow.html
C30, C60, C90, Go! 😉
Catchy song. “Home taping is killing music…” Thanks for getting that stuck in my head!
It's Fucked Up Here in Canada too!
We just got back from Canada Day long weekend at the lake where we decided to build a full-scale Canada Day raft as an activity for the kids & parents. It took us 2 days and $350 in materials. We finally launched it and it floated, was stable, and carried the calculated 700lbs as designed (1050lbs bouyancy – 350lbs weight of the raft itself). But lo-and-behold we had a “Conservation Officer” (Park Ranger) come out and tell us we had to saw it up because it’s apparently illegal to have a “vessel” on the water that has not been “safety approved” by Transport Canada – a process which costs thousands and takes years!
Re: It's Fucked Up Here in Canada too!
In Boulder, if you don’t get the necessary building permits before you start to add on to your house or add an additional building in back, they will come and tell you to take it down.
So, sure, it happens. You just learn to live within the laws, or you mount a campaign to change them.
I’ve seen other cities where there is no zoning whatsoever and you can end up with a funky store next to a mansion. Different communities have different degrees of community control. No place is likely to have absolutely no control over its citizens without a certain level of chaos.
Re: Re: It's Fucked Up Here in Canada too!
You know, actually Boulder is a great example of the give-and-take between the laws, how they are enforced, and the citizens.
Periodically, the police or a judge will jump into a situation which many locals perceive as overreacting. So there will be big discussions online, in the papers, at town meetings, etc. In many cases it becomes established that there was an overreaction and the next time a similar situation happens, the police will modify their response or the judge will be held accountable at an election.
On the other hand, the citizenry is very active in setting laws, such as determining the size limits of houses on certain lots, or how the city will acquire its energy in the upcoming decades.
People in Boulder routinely vote to accept a higher sales tax in order to buy more open space.
So if you have a very active, vocal community that expresses its opinion both for and against laws and their enforcement, you have an ever evolving community attempting to meet the needs of its citizenry.
Boulder is a great place to live because there are a lot of bike paths, a downtown area which is only for walking (no cars), etc. But the freedoms and restrictions that come with it are not the right package for everyone, so those people who don’t like how things are done here tend not to want to live here.
Most of the discussions in Techdirt tend to skew a certain way, which means you are reinforcing each other in your beliefs, but it doesn’t mean you’ve made converts in the wider world.
Re: Re: Re: It's Fucked Up Here in Canada too!
Boulder was also in the vanguard in banning smoking in various locations.
Now it has spread to the entire state. I think it was very popular in Boulder, but I remember all the smokers and the bars around the state who weren’t happy.
I’m glad, though, that I don’t have to deal with smoke in restaurants, on planes. etc. For any law, you’re going to have people for and against it.
Smoke-Free Colorado:
“Which businesses are covered by the smoke-free law?
The law applies to most indoor areas open to the public and most places of employment, including restaurants, bars, gaming facilities such as bingo halls, pool halls, bowling alleys, taxicabs, schools, and child day care and health care facilities, among others. In general, most businesses are required to be smoke-free. As of January 1, 2008, casinos are required to be smoke-free.
Which businesses are exempted from the law?
According to the law, cigar-tobacco bars, limousines under private hire, up to 25 percent of rented hotel or motel rooms, the smoking lounges at Denver International Airport, areas of assisted living facilities that are designated for residents that are fully enclosed and ventilated and to which access is restricted to the residents or their guests, employers with three or fewer employees who do not allow public access and private non-residential buildings on a farm or a ranch that have an annual gross income of less than $500,000 are not required to be smoke-free.”