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Comment by pdonis | Hacker News Reader

> It is logical to require you to have a license to fill a cavity for safety reasons. It is not logical to require a license to cut hair.

You mean there are no "safety reasons" involved in cutting hair? A person with sharp implements around your head and neck poses no safety risk?

Also, even if the "safety reasons" are more compelling for dentists than for barbers, that's still not a reason to have the government doing the safety checks by means of licensing. Private organizations could do the same safety checks--plus, they would have an incentive to do only the checks that actually added value, whereas government has an incentive to impose any requirements that have enough of a political constituency, whether or not they add value.

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>Private organizations could do the same safety checks--plus, they would have an incentive to do only the checks that actually added value,

Private organisations have an incentive to increase profit, even if it means a loss of public safety.

Accountability only provides economic leverage when legal remedies for tort and malpractice are cheap and easily available.

If they aren't, private organisations have no incentive at all to act responsibility. Often they don't.

I think hairdressing may be a special case because salons serve a local area, and it's a very social profession, so bad word of mouth can do a lot of damage.

But that's not true of most businesses. In fact of the drivers of the corporation as a business model is exactly the freedom it provides from personal and social responsibility. Instead of being personally accountable to customers, larger corporations operate at a level where local reputation is meaningless, and only governments, class actions, and the occasional PR disaster can punish bad faith operation. (Of all of those, PR disasters are often the least damaging.)

There are licensing requirements for corporations trading in specific fields and for specific products. But there's no such thing as a valuable and reassuring general certificate of corporate professionalism and responsibility - which is perhaps a strange thing considering the power and influence corporations have.

> If they aren't, private organisations have no incentive at all to act responsibility. Often they don't.

So the dentist in the license-free world have no ecnomic motivation to not just rip peoples teeth out with a pair of pliers?

People can self-regulate for risk and safety when they have complete information about the business. That would not have been available decades ago, but today we have the Internet and can easily move to interconnect everyone with common protocols to discern reviews and criticism of business to give consumers a more informed choice when choosing potentially dangerous trades, without crippling innovation and entrepreneurship within their domains.

How much information do you have about the safe and effective practice of dentistry? How much information does the average American have about the safety and effectiveness of vaccines?

This. There's a tendency especially among software developers to assume that because there is truth on the internet, everyone is aware of that truth and reviews it critically before making decisions.

This is often not the case, as stated above.

Exhibit A: the supplement industry. They have done a tremendously terrible job of self-regulating. If you aren't familiar with the travesty see the Frontline episode on the topic - http://www.pbs.org/wgbh/frontline/film/supplements-and-safet...

(Also the internet is filled with 95% garbage)

But everybody can look up the validity of their claims online, so it's okay if their advertisements are blatant lies. All's fair in libertarian capitalism, no?

> That would not have been available decades ago, but today we have the Internet

Which conveys misinformation as easily as accurate information -- and this is particularly the case when there is any significant interest, including economic/financial interest, motivating the misinformation.

The internet is full of misinformation about dentists. Some corporate sponsored dentists will mill up thousands of fake reviews. These used to be five-star, but now they're smart enough to use a more nuanced strategy and throw in some four star, because at some point people caught on that no dentist has 45 consecutive five-star reviews. Also, the negative reviews will often disappear if the dentist has a lawyer handy.

Private organisations have an incentive to increase profit, even if it means a loss of public safety.

1) Charge someone for dental work. 2) Injure them. 3) Profit?

We have laws against injury.

Private organizations could do the same safety checks

Someone didn't learn anything from the 2008 crash and the issue of private ratings agencies...

Privatize safety checks and businesses will shop around to get a certification.

Believe it or not, capitalism doesn't solve every problem.

Someone didn't learn about the de facto monopoly the SEC (federal gov't) gave the Big Three (Moody's, S&P, Fitch) at the time of the meltdown through its NRSRO status: https://en.wikipedia.org/wiki/Nationally_recognized_statisti...

The whole banking and financial system at that level has its tendrils wrapped so firmly around the gov't (and vice versa) that a failure there is hardly an indictment of free market principles.

We're not going to remove all government in one fell swoop. So cases where deregulation causes problems are a strong argument against blindly supporting any and all deregulation. "Deregulation works, you're just not using enough of it" is fallacious IMO, but even if it were correct it would still be irrelevant.

> monopoly the SEC (federal gov't) gave the Big Three (Moody's, S&P, Fitch)

But wasn't part of the problem that there was competition among them? They were handing out favorable(fraudulent) ratings becuase they were trying to poach customers from the others?

So what you're saying is:

It doesn't solve the problem of the combination of gov't corruption and private sector corruption, so private safety regulators/inspectors would never be able to keep anything safe.

And some ratings agencies would compete to be the one with the best reputation, which would lower the value of shopping around for substandard ones.

Why? The customer isn't the consumer of bonds, it's the underwriters and borrowers.

By stamping shit debt as AAA, they were providing a wonderful level of service for their customers -- the bankers.

Only in the fantasy world where people have the time and expertise to evaluate the relative merits of hairdresser ratings agencies.

People are overly distrustful of private entities. Likewise, they're also overly trustful of public entities. It's implicit in almost every argument you will have when advocating free-market solutions over state-monopoly and state-regulation type solutions. And this applies to practically any problem.

Unfortunately, no one wants to see the elephant in the room. Both types of entities will do (or at least have the risk-of doing) what is in their own best interest. But only one can have a violence-backed monopoly advantage.

https://en.wikipedia.org/wiki/Jim_%28horse%29

https://en.wikipedia.org/wiki/Radithor

https://en.wikipedia.org/wiki/Elixir_sulfanilamide

We have laws against killing people.

They had laws against killing people back then too. Why weren't those laws effective?

For example, the only reason the FDA had the power to go against Elixir sulfanilamide was that it was mislabeled, not that it was killing people.

You also have laws against copyright infringement. And just as you can't unsee an illegally downloaded movie, you can't unkill a man.

https://en.wikipedia.org/wiki/Unethical_human_experimentatio...

Government is not better, than private companies.

To an extent, you are right. On the other hand, those are usually (and correctly) regarded as government failures rather than as how things are supposed to work.

Reflexive secrecy is antithetical to democratic government, but that's a completely different issue.

A government which is tightly constrained in the use of violence by laws and social custom is vastly preferable to a free market in violence.

You've posed a false dichotomy. No one is talking about a free market in violence. A free market is tightly constrained by social custom, ostracism, and economic forces that are often more powerful than law. Lack of regulation does not make violence any more tolerable.

A free market is only constrained by the morality of individuals, which as everybody knows can quickly detour from the social custom. Ostracism is never a concern if you have power and/or money. A lack of regulation doesn't make violence more tolerable, but makes it more appealing.

> A free market is only constrained by the morality of individuals

It really isn't even very constrained by that. It helps if people are generally virtuous, but even an institution where the majority of the people are of good moral character, can display pathological behavior if it's poorly designed.

A free market is only constrained by the morality of individuals There is no one who advocates for free markets who advocates against laws. Killing people is murder, hurting them is causing injury, etc...

It's constrained by laws, ethics, and economic forces.

That sentence wasn't in a vacuum, read the parent posts for context.

1. Elections.

2. Monopoly. There is no "but they are doing it so we have to, too" race to the bottom.

>Private organizations could do the same safety checks--plus, they would have an incentive to do only the checks that actually added value,

"value" wouldn't have to mean increased safety for the consumer, though. The incentive on the part of private enterprise could just as well be to impose any requirements that increase profits, whether or not they add value.

If there is no government regulation to impose restrictions by force, then a requirement that doesn't add value can't increase profits, because customers won't accept it; there will always be some competitor who sees the potential to out-compete you by not having a requirement that customers don't want.

Which is nice in theory, but absolute nonsense in practice, as evidenced by the number of no-value-add diploma mill accreditors and homeopathic regulatory bodies even under a regulatory regime where organizations can actually potentially be prosecuted for deliberately misleading people.

In other words, the regulatory regime provides no actual benefit, yet we are paying for it with our tax dollars. Thank you for making my point for me.

You honestly don't think that fewer people would get the medical treatment they needed if diploma-mill qualified charlatans were able to represent themselves as actual doctors or surgeons rather than having to go down the homeopathy/"alternative therapy" route?

Now you're talking about changing the current regulatory regime, not about getting rid of it--you're talking about diploma mills being able to give M.D. degrees that get recognized by things like state doctor accreditation boards. I agree that would be worse than what we have now, but it's hardly an absence of regulation; it's just making the regulations stupider than they already are.

A true absence of regulation would mean that individual people would have to make their own judgments about who was reliable, in health care and everything else. Sure, anyone could call themselves a "doctor", but that term would mean nothing by itself; it certainly wouldn't confer any special privileges on the person using it. If you wanted to know if a "doctor" was qualfied, you would look at his actual qualifications: where he got his degree, if he has one (and was it a diploma mill or a real school), where did he do his internship and residency, what sorts of cases has he worked on, what is his success rate in treating various conditions, etc. (Many people already look at these things even in our current regulatory regime, as evidenced by the number of websites whose business model is to provide such information.)

Would some people make bad decisions in such a regime? Of course. But people make bad decisions now. The question is which regime do you think produces worse decisions: a regime where everyone knows they are individually responsible for making good decisions, not just about what health care to get but about who to get it from, or the regime we have now, where people are encouraged to just accept particular credentials (M.D. degree, "board certified", on the list of preferred providers for their health insurance) as sufficient and not look any further.

You seem to assume that all customers are both rational and well informed. They are not. That's why your models break down in the real world.

You seem to assume that governments will magically do a better job than customers of regulating the behavior of market participants. They won't. That's why your models do worse in the real world than mine.

>That's why your models do worse in the real world than mine.

Laughable. There was days without regulations, they didn't come out of nowhere cause someone was feeling bored. I don't want to go back to that time.

How do you explain the supplement industry then?

> There was days without regulations, they didn't come out of nowhere cause someone was feeling bored. I don't want to go back to that time.

What time, exactly?

> How do you explain the supplement industry then?

They are responding to market demand. If people are willing to buy supplements without having any information about whether they are safe and effective, then someone will be willing to sell them.

My solution to this "problem" would be to remind people that they will have to bear the consequences of their decisions, and then let them decide--and bear the consequences. That means people who make bad decisions will have bad things happen to them. But at least everybody is aware that it's up to them to not be one of those people.

Your solution is to have the government do the evaluation of whether the supplement is safe and effective--or at least be willing to prosecute sellers who mislead their customers. In other words, you think the government can somehow prevent bad things from happening to people who make bad decisions--or would, if they were allowed to make their own decisions instead of having the government decide for them. But, as someone else pointed out upthread, the government doesn't actually do that--even with all this government regulation, we still have industries like the supplement industry full of hustlers trying to sell people bogus products, and they don't get stopped by regulators and they don't get prosecuted when they deliberately mislead customers. So bad things still happen to people--but now it's worse, because people think the government regulations are protecting them, so they don't think they need to take any other precautions, but the protection they think is there isn't there.

A person with sharp implements around your head and neck carries a modest health and safety risk and it might be good to subject barbershops to modest regulation.

Will the regulation actually be modest? A person braiding your hair (uncommon among the white middle-class American community but quite common in African-American communities) poses a trivial health risk, and there are many cases of where the relevant occupational licensing required thousands of hours of (substantially unrelated) cosmetology training:

http://ij.org/case/washington-african-hair-braiding/

http://ij.org/case/missouri-hair-braiding/

http://ij.org/case/txbraiding/

http://ij.org/case/utah-hairbraiding/

http://ij.org/case/taalib-din-abdul-uqdah-v-district-of-colu...

http://ij.org/case/cornwell-v-california-board-of-barbering-...

http://ij.org/case/armstrong-v-lunsford/

The stories are pretty much the same. "They used to require 1000+ hours of unrelated cosmetology training. Now they require posting basic sanitation standards, a written test, and a $25 fee. Thousands have entered the business." And these are just some of the cases that one nonprofit has taken and won. You can bet there's plenty more out there in many, many fields.

Of course, if we want to be fully ridiculous, note that Louisiana once required occupational licensing to arrange flowers:

http://ij.org/case/meadows-v-odom/

http://ij.org/case/chauvin-v-strain/

... or look up the cases on interior design... or the sale of headstones...

Headstones and funeral services were/are regulated because there has historically been a pattern of predatory behavior towards grieving relatives and older folks making arrangements.

It seems regulation has failed to curb this behavior.

Not true.

In New York, regulations have virtually eliminated common frauds. For example, funeral homes are required to place prepayments in escrow in an interest bearing account. That protects you from unscrupulous or failed funeral homes disappearing with your money.

Funeral directors are also not allowed to upsell your relatives after you have pre-planned a funeral.

How much do these government regulations increase the average price of a funeral? How do we know the extra protection is worth the cost?

Good question.

It didn't occur to me that allowing people to systematically defraud the elderly and grieving folks might save me money.

You're missing the point. The theory behind the regulations is that, without them, the funeral companies will make extra profits by selling people services they don't really need. If that theory is correct, then the funeral companies' response to the regulations will be to raise prices on the services they are allowed to sell, to make up for the lost profits on the services they can't sell any more. If they raise their prices enough, everyone might actually be worse off, on net, than they were before the regulations--sure, they're not paying for extra services any more, but they're paying enough more for the services they do need that they actually end up paying more overall.

It seems to me that anyone who is in favor of the regulations should at least have some kind of data to show that the above is not the case.

> raise prices on the services they are allowed to sell, to make up for the lost profits on the services they can't sell any more.

Economics doesn't work that way. If a company is out to maximize profit (and any company that stoops to fraud is almost certainly out to maximize profit), why would they wait until regulation to artificially raise prices? Their prices are as high as they can go already.

Harmful regulation raises prices by raising the price of inputs and raising the marginal cost of an additional product, resulting in fewer transactions being profitable and a deadweight loss to both the consumer and producer (split according to how price-sensitive the two sides are.)

> Their prices are as high as they can go already.

"As high as they can go" in what sense? If you mean their prices before regulation were determined by supply and demand, then the market was working and there was no need for the regulation. If you mean their prices were determined by something else, what?

> Harmful regulation raises prices by raising the price of inputs

That's one way regulation can be harmful, but not the only way. Another way is for it to outlaw positive sum transactions that, in its absence, would have taken place. You're assuming without proof that the regulations in question "know" exactly which transactions are the "right" ones to outlaw. No real regulation has ever been anywhere close to that accurate.

And some antifraud regulation on funeral homes makes sense. However, the law I was thinking of essentially prohibited religious cemeteries from selling headstones, giving a state monopoly to the Monument Builders Association of New Jersey.

"Private organizations could do the same safety checks--plus, they would have an incentive to do only the checks that actually added value"

I was thinking that this example of rent-seeking would come from non-governmental associations trying to justify their existence. If all safety checks were unnecessary, would that entity really phase them out or try to find more checks and initiatives to remain relevant?

If the organization doing the safety checks doesn't have government force on its side, it only has an incentive to do safety checks that its customers will pay for. It can always try to think up new checks and try to convince customers that they're worth paying for; private businesses do that now. But it's still the customer's choice. If the checks are mandated by the government, then the customer doesn't have a choice, and the organization making the checks now doesn't have to convince customers; it only has to convince the government, which experience suggests is much easier.

I most certainly don't want all safety regulations limited to "what customers will pay for!"

Who else do you think will pay for them? We are all customers; we all end up paying for them one way or another. The question is whether you want to pay for the regulations that actually benefit you, or the regulations that rent-seeking organizations can convince the government to use your tax dollars to pay for.

You missed the point completely.

Then what is your point? If safety regulations aren't going to be limited by what customers will pay for--either directly, or indirectly via taxation--then what do you think should determine what safety regulations we get?

There are no safety precautions beyond everyday activity. The threshold is not "zero", nothing is ever ever zero.

> You mean there are no "safety reasons" involved in cutting hair?

Ah, but this isn't really for "safety reasons", it's for "legal reasons". Sweden is widely regarded as one of the (if not the) most safety concerned countries, after all we "gave"(1) the world Volvo and Autoliv (among others). Yet the idea of regulating barbershops for safety reasons is totally alien here. We tend to trust that people have a common sense. This seems not to be the case in the US. This is mostly because of the legal system, whereas in Sweden you cannot sue someone else because you lack (or pretend to lack) common sense. In fact, the idea would never even occur to most people here.

(1) No, we're not giving away Volvos, you need to buy one yourself.

Nice theory, but it's also a regulated occupation in Germany.

Germany != Sweden

Yes, but

> This is mostly because of the legal system [..]. [T]he idea would never even occur to most people here.

As far as I understand it, your argument was that the US regulates hairdressers because of its legal system. Germany also regulates hairdressers but doesn't have the US's legal system (in fact, it's closer to Sweden's with regard to suing over common sense). So as far as I can tell, Germany invalidates your assessment.

Ah, but it doesn't. That would be a logical fallacy. Germany could have another reason for regulating barbers. My original comment wasn't about the regulation of barbers in general, it was about regulating them in the US (which was what the article was about). Having been to the US a couple of times, I have experienced first hand that you are commonly deprived of your own choices in the name of safety, when really, it's in the name of "not wanting to be sued".

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