[Frost1x]

Businesses are great at optimizing in profit and left to their own accord, that’s ultimately what they’ll do. In many cases that means risking safety, externalizing costs to others, creating anticompetitive unions like cartels, and so on.

Regulation exists to guide that optimization process so it’s forced to factor in other things like safety, environment, competitiveness for consumers and so on. The point being that if you can optimize in a way for profit AND for society at large then we have a reasonable balance to justify your existence. If you can’t, well then we probably shouldn’t be doing what you’re tying to do because the costs you would otherwise opaquely externalize on society are too high for your profit motive.

That isn’t to say things can’t go awry. Over regulation can occur where constraints are added that become crippling and the constraints are too risk averse or just poorly constructed that they do more to break the process than actually protect society. But whenever someone cries at over regulation, they need to point out the specific regulation(s) and why they’re nonsensical.

I’ve worked in highly regulated environments and you’re often very aware of what regulations you need to conform to. Part of that process is often asking why it exists because it can be frustrating having a roadblock presented before you with no rationale. Most the time I can think of good reasons something exists and it’s easy to consider and honor that. Meanwhile there are some regulations I scratch my head and can’t find what they justify, so there should be a channel back to lawmakers or regulators where people can inquire and work can be done to see if those regulation are actually effective or not at achieving their goal, or if they’re just constraints that makes things more expensive.

[SubiculumCode]

It also allows corps to lock out competitors who cannot afford to wade through regulatory hell.

[johnnyanmac]

It's a double edged sword. It creates a floor but also lowers the ceiling so a company can't lock out competitors through brute force. it's best to introduce such regulation before we have to worry about monopolies, though.

[sophrosyne42]

Profit-seeking incentivizes safety and makes any cartel situation inherently unstable.

Regulations, on the other hand, allow stable equilibria featuring cartels.

[ndsipa_pomu]

There's plenty of examples where companies have explicitly put profit ahead of safety (e.g. Ford Pinto).

[miltonlost]

> Profit-seeking incentivizes safety and makes any cartel situation inherently unstable

Do you have ANY knowledge of economic history? Profit-seekers putting $1 into safety equipment rather than their own pocket is a laughable thought.

[dontlikeyoueith]

I bet you believe in wizards and magic fairy dust too.

[gbacon]

This is the Schoolhouse Rock version that ignores the real phenomenon of regulatory capture, formalized by Stigler way back in 1971.

“We propose the general hypothesis: every industry or occupation that has enough political power to utilize the state will seek to control entry. In addition, the regulatory policy will often be so fashioned as to retard the rate of growth of new firms.”

[gunsle]

You’re never gonna get these people to understand basic economics if they don’t already. It’s mindblowing people do not understand that more regulation = more red tape = less competition as the only companies that can afford to do business in that environment are the ones already in power with resources. Taxation and regulation genuinely only further embed those in power. Ironically, most leftists that advocate for more taxation and regulation in an effort to help the poor and working classes seem to have no grasp of economic realities at all.

[johnnyanmac]

Yes, that's why it's important to regulate before the industry gets enough political power to buy the "regulations" they want.