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Comment by transfire | Hacker News Reader

Ironically over regulation is causing much of the inequality, not the other way around.

Is this inherent to the concept of regulation or is it a consequence of removing many of the guardrails that prevent wealthy interests from influencing legislation?

Regulatory authority is a central point of failure. Regulators are only human and as such are fallible and corruptible by definition. There are no effective guard rails which can change this. You cannot regulate away human nature.

The real irony here is the fact that the author of this article comes from the infamous Chicago school, which as the birthplace of the neo-liberal ideology which would posit precisely this kind of statement, yet the author does not seem to agree with you here, instead seems to think this is still an open question.

I however disagree, I think socialism has more than proven its merit, particularly if you—as the author of this article does—look at the history of the USA, beginning with the Gilded Age where laissez-faire capitalism caused an unprecedented inequality and poor labor conditions, only stopped by the great depression and the new deal which followed with its regulations as well as social programs. Now in the wake of Reaganomics (championed by a previous generation of the Chicago school) we seem to be flirting with a similar level of laissez-faire capitalism, deregulations and gutting of the social programs, we seem to be heading straight back to the inequality of the Gilded Age.

the "Gilded Age" was termed after the fact by the same liberal socialists. bringing inequality isn't a bad thing. inequality emerges by necessity from a distribution where people have choice, but that's too long to discus here. what really maters is did the quality of life of everyone go up. For example: The cost of oil was brought down by over 80%, enabling people for the first time to read at night. You are in a comfortable position to benefit from everything that 'the gilded age' brought, but don't have to face the down sides of not having it by being here.

It can be argued that the benefits of lower oil prices were insignificant next to the benefits of electricity infrastructure which the New Deal brought to the masses. To afford that oil, and to afford that lamp, you still had to labor day and night, even if you were only 12 years old, in such poor working conditions that dying at your job was a serious risk. To enjoy the light from the electricity of the many dams the work project of the New Deal brought, you just had to pay your taxes.

The Laissez-faire capitalism of the gilded age came crashing down in a spectacular depressions, the benefits, which only some could afford, were short lived when suddenly there weren’t any jobs. The New Deal gave people back their jobs so we could again afford the luxuries of past inventions.

You see. I too can spin a narrative where socialism brings all the good stuff and capitalism none.

The new deal was a huge failure. only the outbreak of WW2 ended the great depression, to which socialist policies were only prolonging the pain of the great depression. Bad working conditions is not == capitalism. Soviet working conditions were not the workers paradise. Working conditions in China is still not the workers paradise. Working conditions in North Korea are not the workers paradise. Need me to go on? I can do this all day.

and by the way, the oil for reading at night was only one of many many great benefits. Ford bought cars to the working class for example.

here's an article that says we already passed it.

https://news.yahoo.com/super-richs-wealth-concentration-surp...

Inequality has been a feature of human civilization since long before the modern regulatory state.

What regulation specifically? From my own experience, Texas power grid deregulation definitely hasn’t made my electric bill go down.

When you pass new regulation (requirements), you generate new costs associated with providing $service_or_product. When costs go up, they are passed on to consumers. Now that your $service_or_product is regulated by 17 regulations that cost an average of $x each, your product now costs $base_price + ($x * 17) dollars. People with low income are less likely to be able to afford it.

This is extremely context sensitive. Antitrust regulation doesn't require a "compliance" department unless you're already huge and doing things that might be considered anti-competitive. Likewise financial regulations like Glass-Steagal[1] prevent certain types of organizations (in this case hybrid commercial-investment banks) from existing - I don't see how this could result in compliance costs.

[1] https://en.wikipedia.org/wiki/Glass–Steagall_legislation

Is there a better way to implement regulation then? Perhaps i'm unaware of what regulation means in this context, but a lot (not all!) of regulation serves a purpose, or did originally. Ie safety regulation for requiring how your home wiring is done; that builders can't skimp and use thin wiring or etc. Food safety regulation for how long food is allowed out of cooling, temperature requirements for cooling, etc.

These obviously serve a goal, but if you're saying that they also cause inequality, what is the better solution? Do we remove all safety rails? Or are some seen as essential, so the debate isn't pro or anti regulation but merely which ones are worth the cost? etc

The best part about this is removing regulations wont change any prices. They will just keep the profits and continue to raise prices.

1) Company Complains about regulations 2) Gov Removes Regulations 3) Companies do dumb stuff 4) Gov Applies Regulations 5) People forget about dumb stuff 6) Return to step 1.

Case In Point: SVB

Not too mention that companies consolidate to cartels(I'm looking at you industry trade groups) which have significant pricing power so the cost usually don't end up with the consumer.

But a lot of times those regulations are enforcing things like health and safety or other types of cost shifting. where either the there is large differential in the expertise on one side of a transaction or a third party is the one paying the costs of the transaction.

EPA - polluting for instance.

In 1969, the Cuyahoga River caught on fire in Cleveland just a few miles north of Cuyahoga Valley National Park.

When rivers start catching of fire the companies doing the polluting aren't really going to stop doing it and since most consumers live pay check to check they will generally chose the cheapest option available. even if they end up paying 10X the cost down the line.

What exactly does your experience include? because Texas is ranked 9/50 in terms of most affordable electricity at 11.36c/kw. Admittedly cost of electricity is not the strongest of arguments because there is a lot that goes into the cost - such as weather and natural resources available. But its a really week argument to use Texas electricity costs when they are among the most affordable in the nation.

edit: source = electricchoice.com

https://en.m.wikipedia.org/wiki/2021_Texas_power_crisis

I'm not a libertarian, and believe pretty strongly that while it's probably not a good idea to have a "planned economy", you can and should redistribute some from the "winners" to those who the market leaves behind.

That said, zoning regulations in particular are a net negative, were mostly born out of racism in the US, and their purported objectives can be achieved better through other mechanisms - actually regulating externalities like noise and smell.

https://islandpress.org/books/arbitrary-lines

> you can and should redistribute some from the "winners" to those who the market leaves behind.

Personally I'm in favor of wealth and income limits, with anything past a threshold being redistributed or to fund UBI.

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