Comment by CodexArcana | Hacker News Reader

Comment by CodexArcana | Hacker News Reader

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This is an incredibly utopian view of the free market that has never existed in any implementation of the laissez faire free market philosophy. Competition yields winners, and those winners buy out the losers, leading to monopolization and wealth consolidation.

You've identified the problem, the railroads are a captured market, but it's because most regulatory bodies are operated by former agents of those industries or those taking large amounts of money from those industries. These industries DO get bailed out, because they have captured the regulatory mechanism. Their wealth consolidation allows them that power, especially in the post Citizens United world we live in.

The things you view as failings of the government are corporate successes in the never ending squeeze of year after year growth.

The power structures inside these corporations are squarely authoritarian in their design. You have no real agency within your workplace. The most freedom I've ever experienced in my work history has been working for government agencies, specifically public education, doing IT work. This idea that, in the absence of government intervention, we (citizens) would have the agency to do the right thing in these moments completely ignores the massive amount of leverage the corporation has over its workers. Since these corporations are top down, hierarchical, and authoritarian in their organization, the only will the workers have is that of those at the top. In this case, the executives and shareholders who historically have shown to not be interested in taking a loss for the sake of safety.

You mention that, under the utopian vision of the free market, we would go to another vendor. So who would we decide to transport with? The rail systems are regionalized and to get from one part of the country to the other you have to make trilateral or quadrilateral deals with these companies. In other words you are forced to use all of them on some leg of the journey. This regionalization means that there is an oligopoly on the rail system. How are you going to create a "competing" rail system in any of these regions when these companies own all the rails?

> In this case, the executives and shareholders who historically have shown to not be interested in taking a loss for the sake of safety.

If an executive is making a choice between profit and safety, then the regulatory regime has failed.

The only way capitalism can work is if risk and reward go together. If a company can profit from taking a risk, but does not suffer the true cost of a failure, then they will be incentivized to take irresponsible risks. The best example of this is 2008, where financiers gambled themselves into oblivion, but got bailed out when it went bad.

> The best example of this is 2008, where financiers gambled themselves into oblivion, but got bailed out when it went bad.

This is an interesting example, but I think you need to go further in saying that the post 2008 financial system was even more irresponsible than it was before

The maximum fine a rail company can face is $225k, even when loss of life occurs. Unfortunately, the regulatory regime you describe has been captured for roughly the past 80 years.

The reality is that the legal system makes it so difficult and expensive for claimants to recoup the harms they suffer. Causality is hard to prove and the claimants are up against corporations which have teams of lawyers and a court system which has made tort cases have a high burden of proof. This can make it difficult for claimants to win, even if they have a strong case. Plus, tort law is a complex area of law, and it can be difficult for claimants to understand their rights and to navigate the legal system.

It is even worse. It has been captured from for the past 120 years or so. The railroad companies tried to manage their own collusion, but repeatedly failed. So they helped farmers to get Congress to regulate the railroads with the ICC. Very shortly, the railroads had their people doing the regulation which very effectively managed the rates to eliminate discounts and other means of competition. With the end of such competition and stabilization provided by the government, it is easy for a big entity to take over and thrive.

They even got it to take control of the trucking industry for decades, mandating such things as being able to only have the truck full in one direction.

A government run legal system is just as ineffective as any of the other government run systems. The hope is nimble, private arbitration. Trust needs to be built up and reputations paid attention to.

The utopian vision is that the entity with a monopoly on violence would ever produce impartial, socially good outcomes. Who are these regulators that would do a good job and who are these politicians that would be okay with them doing that? The politician's incentive is to get repeatedly elected which means money from donors and promising voters blah-blah-blah though those voters rarely hold them to account for their promised visions failing to materialize.

The vision of a society dedicated to free association of people should be a guiding star. The history of companies, even with a largely captured government, is that they tend to continually change, often growing smaller. Many of the big names in business nowadays did not even exist 50 years ago. Many of the big names of previous eras have long gone away. Competition yields temporary winners, but in a dynamically changing world open to all to be a competitor, they do not stay winners forever. Rockefeller kept trying to buy out all the refineries, but people can't making more. Eventually, he gave up. Cornering a market is very hard if government is not putting up barriers to entry.

As for authoritarian companies, more freedom for the working class to form their own businesses is the response. Our current government makes that very hard with a few exceptions, such as the seemingly entirely unregulated lawn businesses which is filled with small independents. Get rid of the government overhead, allow people to just do stuff for others as the others wish and get paid as mutually agreed, and then there would be competitive pressure on companies to change their approaches.

And, if not, make their replacements. Make democratically run companies. They exist and if that is what workers want, then they might thrive.

As for rail systems, there are certainly other means of transportation. That can serve as a temporary work around for a bad rail operator. Meanwhile, if there is sufficient need, one could construct new rail routes to go around the old ones if need be. It would start small, doing the most profitable portions and then work out from there as needed. Just the threat of that would probably lead to sensible negotiations.

Of course, to address the government supported oligopoly, one could also use eminent domain to take the rail tracks and then give them to the local communities in some kind of newly formed, broadly and locally owned companies. One would need to come up with ways of dispersing government property fairly anyway and one could also, at that time, redistribute any critical privately held infrastructure which had been supported unfairly by the government.

What comes first, the regulation or the regulatory capture?

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