Regulatory bodies need to take into consideration size, age, and frequency of violation by the regulated in terms of exacting punishment on new entrants.
For instance; BigFin fintech company gets caught violating Anti-Money Laundering regulations. Big fine.
SmallFin fintech gets caught: slap on the wrist, thou shalt make a remediation plan, and here are the milestones you have to meet.
SmallFin continues doing business, but is on the regulators radar.
SmallFin caught again? Fine.
Now. Let's say SmallFin dissolves, but the key players move and incorporate as YetAnotherSmallFin (different Corp, mostly same people). Get caught? Regulators should look at the people who have been dinged before, and should know better, and regulation should be less forgiving based on that.
The fact is, a great deal gets hidden under "the Corporate Veil" that probably shouldn't be so easily divested from by those looking to abuse the system.
A regulator should by and large be a constructive guiding hand; not just ssmern as something to be worked around in the process of finding new and interesting ways to do shady things.
The catch here is you need to be able to attract high quality people to run the regulator, and I really have no solution for that.
"Excessive" and "less" are not synonyms for "bad" and "good".
This isn't about quantity, it's about quality.
One of the big problems is that regulations are immortal. They get passed and never repealed. This causes two problems. First, they don't go away even if they're bad. Second, they accumulate. That's especially problematic for bad regulations, but it's even a problem for good regulations. If you have a boat with five tons of idle carrying capacity and you decree that it carry four tons of the king's freight, all is well and there is a net benefit produced. But if you decree that it carry eight tons of the king's freight, it sinks.
So if you want to add new rules, you need to find some old ones to take back out. And you should be uniquely careful what you add to begin with, because every one has an opportunity cost, and even bad rules are sticky.
https://en.wikipedia.org/wiki/Sunset_provision
Though yes, that is a legitimate issue.
Other forms of legislative garbage collection carry high costs and side effects.
Some people think that can be fixed, get money out of politics and then good regulation can exist in the long run. Others do not think that's possible, so it's better to remove the power from government altogether, because over time it will always be bought.
Saying that if something is bad, you should try to make it good is just restating the problem.
My goal was to highlight an exceedingly tired and bogus argument.
To us from school (B), the school (A) thoughts are hopelessly naive, but it's impossible to convince anyone of our wisdom who hasn't found it on their own, and it just comes across as infuriating "you'll understand when you're older" condescension.
And so life goes on :)
The solution is to change/improve the system that is creating the regulations. There will almost definitely be new regulations involved in doing this.
I don't see how a system that creates excessive regulation can be expected to constructively par down that regulation without significant changes to that system.
Little company Uber flaunt the law until it becomes big company Uber that can afford its own lobbiests.
I think Uber is interesting in that they actually did offer a superior technological solution to a social problem (driver and rider safety and trust), which is usually doesn't work since social problems are messy. I think this is why their "ask for forgiveness, not permission" strategy paid off in most markets - the people wanted them to win.
it may be that the required amount of lobbying money necessary for a larger corp is in relative terms tiny but in absolute terms somewhat large (e.g. $15mil gets you 80% of the way there, whereas $150mil only 85%; but a smaller corp can't chalk up the $15mil required for pareto or whatever distribution)
What stats you got for ROI on aerospace R&D vs. lobbying?
Mancur Olsen, The Logic of Collective Action. Seminal economics text.
https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action
https://www.worldcat.org/title/logic-of-collective-action-pu...
Also, companies don’t need to be direct competitors to have adverse interests. For example, Google lobbied heavily on copyright issues because it wants to commoditize a downstream product input to its own services. That places Google at odds with media companies, even though the companies don’t compete directly.
In defence, Beoing and other MIC firms are generally better served by fighting for a larger pie, than over their share of it. The fight is over defence vs. nondefence (mostly social services) spending. See for example; https://www.sourcewatch.org/index.php/Boeing
And I'd asked what your data are. Got any, or do you prefer asking to answering questions?
You're the one supporting the assertion that "the value add of $1 dollar of lobbying/capture efforts goes farther than $1 in R&D or whatever after a certain point." It seems like that's the assertion that requires supporting data. My point simply is that, in the absence of data, we can look at what we would naturally expect to happen if your premise were true--prices would get bid up. The fact that lobbying prices aren't getting bid up suggests your premise is false.
You can add further layers of speculation to explain that unexpected result, but now you're really going out on a limb. I think a simpler explanation is that your premise is simply false. Lobbying has low expected ROI--that's why companies spend so little on it. (In particular, I suspect that lobbying just isn't very effective, so the expected value of a very favorable law or policy, weighted by the incremental increase in probability of that coming to pass through lobbying, is low.) That hypothesis explains the data, without resorting to additional handwaving.
2. I have to think that a lot more money and effort is expended trying to influence regulations than what shows up in the formal lobbying accounting.
One thing companies do is make sure to have major employment centers in as many states and congressional districts as possible, in order to get a good base of votes in any matters that may come up. This must cost a fair amount, but would never show up in the lobbying budget. Just as an example.
enthusiast building company around that new thing: hey wait that doesn't make sense, this is supposed to be for everyone
that enthusiast is now lobbying. is there a specific other situation you were hoping to clamp down on that doesn't rope in the enthusiast?
The real problem with society is that we try to build static structures (laws) in an attempt to foil dynamic adversaries (humans). This simply does not work.
If lobbying was actually limited to citizens or small groups of citizens the negative impact could be reduced. Many other countries aren't impacted by regulatory capture as bad as the US.
Corporations do not elect representatives. Lobbying companies do not elect representatives.
Seems clear which needs to be got rid of.
Also, in the United States, you do not need shareholders to form a corporation. You are already a corporation in and of yourself. If you want to fund your activities via your own money, you do not technically even need any corporate body to conduct in business. Business is an individual right.
Sure! So, I'll start a software company, let's call it Maxisoft. Then, I'll start a non-profit, "the Maxisoft benefactor's mutual benefit corporation" (A non-profit producing body) who just happens to share officers with Maxisoft (after all, since we're all in business together, it makes sense that we're all friends, right).
> limits on the type and amount of spending
Why? Don't individuauls have an unlimited right to spend as much as they want seeking redress of grievances? Board members could just vote officers a higher salary and then the officers can simply use the corporation's assets (now their own via the magic of payroll) to do the same lobbying, and certainly, you cannot be against the right of an individual (in this case an officer of the corporation) from asking his/her representative for change?
> they're required to publish sources and destination of income
I fail to see how this isn't a massive breach of an individual's right to privacy, but either way, for the most part, donations to a political campaign are public.
Ultimately, IMO, your regulations fall flat, because they all get in the way of an individual right to seek redress. In every case, there is a straightforwards way around the regulation, and there is no way to stop what you are trying to stop without stripping some people of their individual right to petition their government. Thus, we ought to reject all the regulation as an unnecessary overreach.
I agree that no restriction will be perfect; however, I think that it's likely that restrictions could be crafted that are better than what we have now. For example, maybe something like:
- A non-profit can spend as much as they want on politics as long as the money comes from individuals.
- There is a restriction on how much an individual can give to any given non-profit. Or perhaps there would be restrictions on what percent of the PACs spending comes from any one person. It is illegal for non-profits to collaborate to bypass these rules (in the similar way to how it is illegal for corporations to collaborate to fix prices).
That being said, what's your solution if you are opposed to campaign finance regulations?
I mean, I agree, but money is going to buy influence whether you believe in some sense of noble politics or not. Without severely and arbitrary restricting even more rights it's impossible to get around this. Those with more money can make friends with influencers, buy advertising space, produce media, etc, at far greater rates. Even without direct lobbying, they're going to be more influential
> There is a restriction on how much an individual can give to any given non-profit. Or perhaps there would be restrictions on what percent of the PACs spending comes from any one person. It is illegal for non-profits to collaborate to bypass these rules (in the similar way to how it is illegal for corporations to collaborate to fix prices).
No there isn't. There's just taxes on contributions if you give more.
> - A non-profit can spend as much as they want on politics as long as the money comes from individuals.
I already gave a few ways around this legislation above.
So for instance, a corporation could still have their executives donate to PACs and they could create dozens of PACs in order to be able to donate more overall. However, there is a limit to how many executives and PACs they can juggle so it at least doesn't scale the way the current abuses do.
Nah, someone will just offer a service to those executives to manage their PAC contributions. But, I mean, job creation is great, so I guess that makes sense.
It’s a real problem, so let’s work on some solutions. Mercenary sock puppets should be limited, no?
Seems less reasonable to petition as a full time role, and get everyone's representative on board with unduly supporting a particular company or cause, or get undue weight because can throw $10m at the issue. That's not really representing the people any more, even if it is understandable how it happens.
Citizens banding together in a cause? Already happens, and no doubt representatives who receive 500 letters or emails that could be copies of each other are treated as less weighty than 500 individuals writing individual emails on the same cause.
Hence trying to limit opportunity for professional and full time lobbyists, the permanent presence near to government constantly trying to influence, create and ruin policy. Sure, the CEO is probably only ever going to sign rather than write, and their money will always bring extra influence. I'd hope to find a balance that keeps it transparent but minimises gaming the system with money.
As is, lobbying is bending most governments around the world badly out of shape, and seems to have got far out of hand. Of course getting a better system, whatever it may be, through the current system is another matter entirely... :)
The other is not.
I'm still dumbfounded by the idea that corporations should enjoy any kind of right or privilege, let alone that kind of special treatment they enjoy nowadays.
The objection is that "it's too hard to define legally". Nonsense. Courts distinguish between natural and artificial legal personality all the time. Corporations are a legislative creature. People aren't.
Perhaps, but probably not. The ease of corporate veil piercing is inversely proportional to the number of involved parties.
> An incorporated association? Legally distinct and visible to a court.
which means that it is easier to sue as an entity.
> The objection is that "it's too hard to define legally". Nonsense.
I never made that argument. Stop with the strawmanning. I said that there is no way to limit the ability of companies to petition the government without simultaneously limiting the ability of individuals to do so as well. The previous regulations we had were easily bypassed.
What you said was:
> Okay, so if citizens decide to band together to petition their representatives, that isn't allowed?
Implying that these were inseparable. They are not. That enforcement is difficult and imperfect is different from whether it is possible or desirable.
Don't corporations also answer to customers? Customers will stop buying from a corporation if prices are too high or service is too poor.
The people who really need protection are the third parties who can get stuck with externalities from activities they had nothing to do with.
So we rely on lobbyists now to explain to our legislators when the "system of tubes" metaphor for the Internet breaks down. Hopefully we can get multiple competing groups in the door to prevent the advice from being too one sided but at the same time everyone presenting has an agenda. Which probably costs the taxpayer more than hiring experts would but that cost isn't obvious the way a line-item on the budget would be.
And as bad as the current system is having legislation just based on what representatives know would probably be worse.
You just showed how simple it is to switch the incentives. I'll add that taxpayers pay for the campaigns instead of corporations. Whoever wins at each level of elections gets a larger amount to campaign with. If contributions are allowed outside that, it's only individuals with a cap. It's a felony to violate these rules. Work from there.
Get rid of congressional elections, move to a method of selecting representatives that selects a representative sample of the population such as a lottery among registered voters.
"solving the problem is half the problem"
Lobbying and legal bribery are far more prevalent in the US than in Europe.