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Comment by thawaya3113 | Hacker News Reader

No it isn’t. Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements.

Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books.

But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements.

The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify.

There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.

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It's worth noting that a lot of consumer protection laws are 50 years (or less) old. Many were born from the great recession less than 15 years ago.

To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.

>Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements.

And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently.

I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page.

Edit: Why is this opinion so unwelcome here?

> policy from the 1930s and it fit on one page

Of course it did. If it was printed, at the time, it had to be standardized. So the simplest thing would be to make them all identical. At most you’d have a kind of “if this box is checked, clause A applies” set of customization.

Only major contracts would be subject to major customization with individual pages typed.

This tool that we love so much probably had a major reason why things got so complicated.

Personal theory (that I just thought up, so I’m sure someone else thought of it first): complexity is like a goldfish. It grows to take up all available space in a system. If a system can handle more complexity, more will always appear.

When we couldn’t adjust contracts for individuals because it was technologically not feasible, we didn’t and contracts were simple. Now that we can adapt things for each individual contract, or personalize each web page, insert targeted ads, etc… we do because we can.

That's a fair theory, but I would argue lenders like better.com are winning so much business is because they simplify the process. Their marketing is around that exact reason, as well. There's obviously competition in the space of making home purchasing less complicated, which leads me to reasonably believe less consumer protection from disconnected bureaucrats would result in less absurd complexity. I bought a house just a few months ago and I was on the hook for thousands of dollars before I was legally required to take a home purchasing educational course.

Only bureaucrats could think up such silly rules as to require people to take educational courses on buying a house and allow those courses to only be legally required after you've committed thousands of dollars to the seller.

If the market demanded educational material on how to buy a house (and it does, I've bought a book on real estate for that very purpose before buying my first home) then you get incentives that make sense.

I didn't see a credit score disclosure on better.com's view rates page, but assuming the best score level if you go to bankrate.com and look at the scenario 500K 20% down 740+ credit it shows almost a $50K+ difference over the life of the loan between their quote and the lowest quote on bankrate. Not that they're the best place to find quotes, just it's easy to see multiple rates.

> There's obviously competition in the space of making home purchasing less complicated

How much competition? I've hardly even heard of better.com. Certainly every time I've bought a house (three since 2003, most recently in 2018) I've had to sign an unreadably long contract, and I don't recall much if any advertised competition in the "make it simpler" space.

I'm also not sure I buy that the complexity of the process came down to consumer protection laws, though I'm no expert in that area.

> I would argue lenders like better.com are winning so much business is because they simplify the process.

I feel like if somebody picks a lender and gets sent a stack of paperwork, they're committed. They're not going to back out "because the paperwork is too complicated" and choose a competitor, and ask their sales people "How long is your paperwork?"

So I'd be skeptical that "complexity of the legal agreement" is at all a factor.

> lenders like better.com are winning so much

I wouldn't be so sure about that, they've had 3 rounds of layoffs in the past 4 months, one of which was 1/3 of their workforce[0]. They are also accused multiple times of stiffing employees on severance pay[1]. Not to discount everything else you've said, but please don't use that company as an example of winning.

[0] via layoffs.fyi, filter companies to "Better.com"

[1] https://www.fastcompany.com/90750106/how-better-com-and-its-...

We still can't adjust contracts for individuals because organizations are afraid that they'll wind up in court because "if what I wanted was stupid why did you let me buy it?"

The difference between now and then was a bunch of lawsuits that added more terms to the contract so it was "clearer" and people couldn't win a lawsuit because it wasn't in the contract.

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