"The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
—Adam Smith, An Inquiry into the Nature and Cause of the Wealth of Nations, vol. 1,
What free market type supports individual corporations writing laws that benefit themselves over their customers and competition? Boeing is already the only player in town, they aren't writing laws to benefit anyone but themselves, they aren't trying to increase competition or open up the markets.
Markets are built both on corporations openly trading value to customers for money and competition keeping that system alive and healthy as markets/products/technology/organizations naturally grow and die and economies fluctuate. Stasis and one-sided deals are unsustainable, which is what this type of arrangement buys you.
Corporations being allowed to use state power for their own benefit (at the expense of their customers and/or competition) has nothing to do with free markets. All you're left with then are companies who rake in money from customers without trading full value or excluding competition from existing. That's not a market or a useful system for any society.
Regulations to serve some higher public good that markets can't practically account for are very different from individual corporations writing laws to benefit only themselves in the marketplace. Boeing selling more dangerous airplanes (even if that happens through government coordinated processes) and losing Airline customer's trust would be terrible for any real business, assuming there is competition and customers who aren't forced to buy from them.
Maybe I'm a weirdo, but I think that quote is in general extremely apt for free market ideology. Businesses don't like free markets as much as they like markets tilted in their own favor. If you want an actual free market, you have to watch out for businesses trying to break it through legislation.
I put the scare quotes around "free market" because the usual selective Adam Smith quote is used to support no regulation (selectively) for the benefit of corporations, usually a certain corporation or group of corporations.
Um, right. AFAICT Adam Smith was a principled free market thinker (the quote above only confirms it in my view), as opposed to the ones who only claim to be free-marketeers. I think you always have to distinguish between the actual free-market ideas vs the self-motivated people selectively using "free-market" buzzphrases for their own ends, where "free-market" can be substituted with almost any ideology you can think of. I felt the comment I was replying to conflated the two.
Not an economist, but I rather figured it means that markets are regulated in a way that properly allows and encourages competition. No monopolies, no anti-competitive practices, no pricing or wage collusion, no regulatory capture etc. I'm sure this can be interpreted in as many ways as there are special interest groups, though.
E.g, radically, labor markets in the absence of a basic income system are not really free, since employees starve and lose their homes if they do not accept the best available offer. Hence companies' competition for paid labor is not really free, and most groups have an existential threat if they do not accept the terms of the employers that are willing to employ them.
There are a million aspects to this that I'm not an expert in, but many of the "free market" principles are considered in the context of contrasting a market economy vs. a planned economy.
Well, maybe. In common discourse, "free market" is used to downplay the need for government regulation concerning things like labor rights, pollution and anti-consumer/predatory behavior.
No. Use of fraud and force is not part of a free market. A free market also requires a disinterested system of contracts and enforcement of those contracts in order to work, which is what the government is needed to provide.
Free market means people can voluntarily engage in transactions without the government interfering in those transactions, such as when the government sets the price of some good.
That's how it's interpreted, but of course it is the opposite of a free market as it means they are free to stop new entrants into that very same market.
It's totally adam smith, also the author of "the theory of moral sentiment" which is a fantastic exposition about why as societies we coordinate our morals and ethics. "Free market type"s are often the first to complain about regulatory capture.
Some of us free market types realize there is a difference between the corporatism of today’s world, and the capitalism of where we’d like to be. And that often regulation needs to be in place to protect capitalism from the tyranny of corporatism. Unfortunately the “free market” and “capitalism” are exactly the words corporatists use to get voters on their sides.
>Some of us free market types realize there is a difference between the corporatism of today’s world, and the capitalism of where we’d like to be
Yes, the difference is one exists and is bad (like "really existing socialism" existed and was bad), and the other is an unrealistic utopia like communism.
A utopian market without sucker consumers, without business people willing to exploit it and without powerful companies taking advantage of it, and somehow, with less government as well...
Capitalism is by definition the idea of capital as the organizing principle of society. No matter how idealistic a conception of capitalism you hold, it's still the reification of profit over people.
This is like describing socialism as being about authoritarian governments and centrally planned economies. Everybody misuses labels to their advantage.
As a free market type, I don't see the supposed conflict at all. A free market is more or less orthogonal to the legislative process. Free market types should absolutely want the legislature to be careful not to adopt laws which subtly distort the market in favor of some versus others.
Politics itself is part of the market. Politicians participate in the marketplace of ideas, they require money to market their ideas (campaign financing), and they compete with one another for power and influence. Government both regulates and participates in the market through contracts, causing prices to change, just as any other large participant does.
The criticism I offer for all “free market” types is this: it is naïve to ask, let alone hope, for government to act as an impartial referee. Government is a player with its own agenda. It always has been and, for as long as it is made up of self-interested human beings, it always will be.
This is fudging the word "market" a bit. Free market advocates think that everyone should be able to, say, sell paperclips without the government getting involved. Saying that regulation is "part of the market" suggests some kind of misunderstanding of what a free market is.
> it is naïve to ask, let alone hope, for government to act as an impartial referee.
In practice, I agree. It's also naive to hope for the government to faithfully align with almost any political ideology, e.g. progressivism. I don't see that as a flaw of the ideology itself.
I don't see that as a flaw of the ideology itself.
I have similar quibbles with other ideologies. Really, my strongest criticism is reserved for ideological purists who come in all shapes and sizes. To put it plainly, I believe all ideologies are reductive and lead to absurdities when broadly applied, particularly to other human beings.
Pragmatism is the approach I prefer. What separates it from an ideology is that it doesn't attempt to cram the world into a tiny box. It's a tool that would work even in an unreliable universe and it affords complex human beings the respect they deserve.
There's already a word for a company with a strong-arm division: gang. The government is the biggest gang -- claiming and enforcing a monopoly of violence in a particular geographic area is the defining feature of a government. If the Sinaloa cartel becomes more powerful than the Mexican government, it will become the Mexican government. It effectively already is in some municipalities: https://www.npr.org/2014/02/24/282123622/ruthless-mexican-dr...
> Because of Guzman, she says, everything is under control — people don't steal, kidnap or extort here. And the partiers say he helped the poor, paved roads, gave people jobs — the list of good deeds goes on.
I'm pretty sure it'd be impossible to point to any market anywhere and say "that's distortion free". By arguing that congress shouldn't adopt laws that "subtly distort" you're kind of making an appeal to conservatism (small c) rather than economic efficiency.
Worth noting that suspicion towards 'merchant' types was not new back then, afaik it dates back at least to Ancient Athens and was one of the tenets of their democracy: rich people were excluded from the political process entirely. You could either become rich or participate in politics, not both — in a direct democracy, no less.
The rationale, which apparently seemed quite well-accepted back then, is anachronically explained above by Adam Smith — who I'm sure was well-written in his Ancient studies.
> afaik it dates back at least to Ancient Athens and was one of the tenets of their democracy: rich people were excluded from the political process entirely.
My only source for this is Etienne Chouard[1], a French teacher; it dates back to a 2011 video of a lecture[2] (in French). Notwithstanding political opinions, I expected his apparently factual take on history to be reliable; but I am now questioning whether he can be trusted fully in terms of intellectual honesty. Again, notwithstanding opinions, is he being genuine is his arguments, eg. not skewing history? I'll let you be the judge of that. I am not a specialist in Ancient history, though I have a bit of a formal pol.sci. background.
It wasn't about "rich" so much as perceived to be dangerously influent, my mistake. Note that it was entirely subjective, to be decided by a vote.
The procedure implemented was called "ostracism" and allowed the exclusion of anyone from political affairs for 10 years, simply based on a vote by citizens, without a need for justification whatsoever. Common reasons apparently were "he speaks too well", "craves power too much", "I don't trust him".
Thank you, HN for a quick and efficient fact-check.
[2]: https://youtu.be/HDg2sIZZi8I?t=2408 (40:08 to ~42:00) Note that the whole is quite interesting from a political science standpoint, again notwithstanding any political opinion (note that the speaker however does not refrain from speaking his).
Did a rather poor online search, and the closest I came to something on the subject I found[1] is this:
> Of this group, perhaps as few as 100 citizens - the wealthiest, most influential, and the best speakers - dominated the political arena both in front of the assembly and behind the scenes in private conspiratorial political meetings (xynomosiai) and groups (hetaireiai). These groups had to meet secretly because although there was freedom of speech, persistent criticism of individuals and institutions could lead to accusations of conspiring tyranny and so lead to ostracism
When your previous post said that "rich people were excluded from the political process entirely. You could either become rich or participate in politics, not both — in a direct democracy, no less" I took your claim to be that the rich weren't even allowed to vote in the direct democracy, not that they would be ostracised for being percieved to conspire with other rich people to influence that democracy using their extra power/wealth.
Edit: I just read your other fact-checking-yourself comment (currently under this one) and wanted to note that I wasn't trying to beat a dead horse. I appreciate your willingness to accept that your recollection/phrasing was incorrect.
I appreciate your understanding. And your phrasing, you nailed it.
Candidly, while nigh impossible to see things from the eyes of Ancient Greeks, I think the main take away (which may explain my incorrect recollection, as a shortcut/oversimplification) is that their view of democracy accepted 'sentiment' as valid motive, as valid 'reason' for principle and action. Part of such sentiment was suspicion, the sense of "feels right / wrong". It wasn't naive or blind, nor die-hard objective or quantified; the practice of democracy had to feel 'right', ad hoc. (I've read, in other contexts, accounts of suspicion against greed and wealth from this time very comparable to what we hear today; on a number of topics for that matter, like immigration or cultural identity, the words and perceptions of every day people are strikingly similar.)
It seems that human judgment was deemed 'sacred' or 'quintessential' enough for Ancient Greeks that they let it flow freely, though in some specific moments and places, carefully constrained within the whole political framework —remember that the point was less excellence thereof than survival of all.
Also interesting is the 'de-escalating' approach, ostracism has a negative outcome: not to 'empower' the good guys but rather to 'disable' the bad ones. Here lies a very important principle of their democracy: never give too much power to anyone, especially the ones you 'like' (it always backfires against democracy, as it did eventually in the Roman experiment a couple centuries later). Seek the minimum amount of global power required to fulfill the mission, less is more, lower is better. Concentration of power is a threat to the distribution ideal sought by democracy.
Whatever we think of it, the democratic 'experiment' back then lasted some 200 years, under these principles, and I think it's well worth studying if our current regimes are to become more 'direct' in the hyper-connected environment we now find ourselves in.
> rich people were excluded from the political process entirely.
That's incorrect. If anything, there were modest property qualifications for some offices (according to Aristotle). The most influential people in Athenian politics tended to be wealthy.
Very good quote. I am very sorry, that I hear from my own country (Germany) that more and more laws come exactly from industry lobbyists without any serious review, because our politicians either lack the knowledge or interest to make any serious review.
Even worse, there are nearly nobody in public service than can review some topics (that is the reason, they more and more rely on the expertise of consulting companies when it comes to taxation and finance topics -- and the interest of the consulting companies also lies in reducing taxes for their private costumers ...).
Pretty obvious, but maybe not clear from the headline: the Max was certified under the old rules.
At this point, not sure it matters - it seems like lessons have been learned and overseas regulators (certainly the EASA) will never just rubber stamp the FAA again. The net effect is Boeing looking at significantly more regulatory overhead than ever before.
Maybe having multiple, independent regulators reviewing designs will better address these issues than any legislative requirements ever could.
There's no comfort in the fact that regulatory capture was working well even before these changes. One can also ask if the law was a factor in the inadequate response to the first crash.
> Overseas regulators (certainly the EASA) will never just rubber stamp the FAA again.
Until the US government starts a trade war over the issue. It will not be quite that blatant, of course: it will be positioned as an unfair trade practice. Ask Canada about Bombardier to find out how that goes.
I find an interesting parallel with the current discussion around American business being unduly influenced by China's massive buying power, where even though it's perfectly legal, businesses are so scared of being locked out of China's market that they refrain from any criticism of the government there.
That's a negative side, but a positive side could be feeling great pressure to adhere to the (higher) regulatory standards of other countries. Boeing's capture of the FAA thus becomes a moot point because better regulators will still need their own standards met.
I would just point out that China and the EU will, without question, move to a more robust regulatory régime. I agree with that, that's just going to happen. But also, the US will act to move past its "rubberstamp" regulatory framework.
Now, should China or the EU regard the new US regulatory framework as being any more effective than the last "rubberstamp" US framework? Absolutely not. But changes will happen within the US as well, and there is an opportunity there to make things better.
All that said, yeah, in this case, people can be forgiven for being skeptical of the US. So most of the improvement in quality will likely be driven by the regulatory proctology exams we'll probably see out of China and the EU. But, hey, as long as better quality comes from somewhere, that's better for the people of the world overall.
While there is (a very) slim chance that Boeing and Airbus will face the same scrutiny in Europe - although my bet will be European regulators being somewhat more welcoming and collaborative towards Airbus, do you really expect that the certification times and efforts of Comac and Boeing will be the same in China?
IMO , it still important that this issues are brought to light, the corruption is revealed and the law should be fixed.
We also need to learn from this , like for self-driving cars there is also a big pressure from companies to move fast so I expect that there this sector could also suffer same problems.
Yeah, that headline is atrocious. And quite a bit of the content of the article is about the 2018 law which is basically irrelevant to the flawed approval of the MAX.
So, after having a clear demonstration that the industry is clearly unable to be trusted to put public safety above deadlines in a more stringent regulatory environment, we shouldn't give pause to the fact we just let slip even more rein?
I mean, I get what you're saying, however, in programming there is a practice whereby on discovery of a bad implementation pattern, you start thinking of where else this pattern may have been used. That seems to be being demonstrated in this article.
To be fair, the title is accurate as written and raises a point that is relevant in its own right, especially as the FAA's approval of Boeing's response to the first crash was given under the new law. Furthermore, the article explicitly states that MCAS was initially approved under the old law.
If one is going to speculate beyond what is explicitly stated in the title, part of that speculation might well include the thought that if the change occurred before MCAS was approved, the title would likely have said that instead.
If everyone involved were honest actors, then it would make sense. One problem with any regulatory agency is that the same skillset that makes for a good regulator also makes for a good product designer or engineer. If FAA employees are paid more poorly than their private-sector equivalents, then the regulator will find itself unable to hire competent staff.
Of course, if the companies aren't acting out of good faith, they could recommend inappropriate compensation rates to ensure that the above "problem" is in fact the outcome.
Right - effective regulation needs to be somewhat antagonistic and distrustful even when it's not necessary, because otherwise it will become necessary.
The US Constitution allows companies (and anyone else) to make recommendations as to the salaries of government employees. No law needed to "allow" them to.
The legislation mandates an executive implemented direct feedback loop which can be used by industry to essentially attempt to crack down on problematic regulators.
While the intent is that it should remain neutral, and only used for purposes of streamlining and "making things more efficient", providing a means through which industry could say "this works" vs. "this doesn't", it won't end up being used that way.
However if it was spelled out explicitly, it could be used to argue that it should actually happen. Every part of a legal text has some effect, even a preamble - it provides context for interpretation when something unclear needs to be resolved. So when somebody from Boeing says "About those salaries..."
If you base your safety stuff off of a standard that must be met then you need to do your regulation as a sort of policing. I used to run into this sort of thing when attempting to design stuff to European standards. The North American way is to ensure safety by inspection by an agency. The European way was to leave it to the manufacturers and then penalize deviations from that standard when they came to light. So this could be seen as a move toward the European model. That seems to be the general trend these days. Which can perhaps be seen as a good thing as the various inspection agencies are being privatized.
The big difference here seems to be on the policing side. European regulators have the power to impose billion dollar fines and generate criminal charges against even executive level management. It does not sound like that is the case here. The companies will be considered innocent until proven guilty which really should be the other way around for safety related stuff.
That is pretty interesting because it's unexpected to be that way around regarding Europe and USA. I suppose it varies by the kind of product in any case.
I'm actually astonished by the apparent claim that the European way isn't how it's done everywhere for low-risk compliance.
I picked up a random piece of electronics with a bunch of logos that show it's authorised to be imported and sold in important jurisdictions. It happened to be a Netgear switch.
It has a CE logo (from the European Union) and an FCC logo (from the US).
For the CE logo Netgear's people will have verified that it behaves in accordance with the relevant rules, as part of normal procedure for any product, and the sticker with the logo on just affirms to an importer that Netgear says this complies. Nobody outside Netgear will have checked it's compliant unless/ until somebody realises there's a problem.
Only very high risk items in the CE scheme actually need checks by a third party, that's stuff like pacemakers where if it goes wrong you'll literally die.
Is it really true that the FCC and similar US agencies have people at factories and ports across the US checking everything manufactured or imported is complying to their rules?
> Only very high risk items in the CE scheme actually need checks by a third party
It's not just pacemakers, pretty much the whole PPE category requires inspection by independent third parties (notified bodies).
That's obvious stuff like climbing gear and equipment for work at height, maybe less so for certain gloves, helmets, eyewear, carabiners, rope, etc.
Compare the checks for climbing rope, and the whole EN/US scheme is inverted. We have so few standards in the US market that we just piggyback on theirs.
Yes, the difference is that in the US you don't get to 'self-certify' for a lot of cases where in the EU you can. That puts the burden on the authorities to get it right, whereas in the EU you can expect a retro-active smackdown if you fuck up.
Right. AFAIK fake CE marks are extremely rare, by the way. Goods ordered directly from China may just not have CE marks, most everything officially imported has legit ones.
The mark is a claim that your product is compliant. If you put the mark on something that isn't compliant the mark isn't fake, your product isn't compliant and you (or the importer) are liable as a result.
A mark that's poorly made (smudged, bad dimensions, etcetera) might make consumers suspicious but from the law's point of view the question is only whether this seems to be a claim of conformance, and almost any mark closely resembling the official CE mark is clearly a claim of conformance.
A death penalty for a corporation would mean that the company would lose its license to do business. It used to be done regularly during the 19th century.
The headline implies some sort of causation, or at least correlation, but the article admits a few paragraphs in that the 737 MAX was “certified under the old law.”
I feel like we're in a strange new paradigm where the earliest reaction to something determines the entire reaction. Boeing wasn't prosecuted in the first weeks after the crashes therefore it doesn't matter how far the depths of their greed and negligence went, they never will be.
—Adam Smith, An Inquiry into the Nature and Cause of the Wealth of Nations, vol. 1,