Harry Browne article

[shanek]

Whether or not the company exceeds the gov't standard the regulatory costs are still there.

Not if there are no regulations.

So, while regulatory costs may increase the overall cost of the product, it is not correct to say that those costs come exclusively at the expense of the safety budget.

1) Learn how businesses and their budgets work.

2) It is NOT the case that the cost will simply rise and everything will be as it was. They can't just "pass it on to the consumer" like many people think. Raising the price will reduce demand, and fewer people will be buying the product. It does direct harm to the economy.

The reason that it is a defense is that the regulations are seen as a reasonable safety level. They do not provide an airtight defense, however.

No, but a company that has caused harm but remained within the letter of the regulation will find themselves in a much better position than they would have with no regulations at all.

Without the regulations, I don't see why libertarians don't accept that there will be firms that purposefully skimp on safety in the name of short term profits. We have seen it even with regulations. Why would it not happen more if we got rid of them?

Because the cost/benefit ratio will be skewed the other way. It will cost them less to produce a safe product yet it will cost them more to produce a dangerous one.

The same accusation that you level at regs - companies just meet the regs - can be levelled at UL.

No, they can't; and I'd love to see you try and support your assertion that they can.

Do you even know how UL works?

The standards, however, are set by UL. Companies can just rely on meeting UL standards and not go any further. How is this any different than regs?

[Sigh...]

Okay...I'll try and use small words this time.

UL is NOT compulsory. That means they don't have to do it. That in and of itself keeps costs down since if they charge too much the company will find some other means or a competing organization will emerge.

UL performs the safety tests, and the costs of UL compliance go towards those tests. With regulations, the government forces the company to do the test AND prove to them the tests were done and result in compliance with the regulations. UL does not have that additional cost.

UL will also work with the companies on their cost management and try to keep costs as low as possible. The government doesn't even pretend to try to do this.

UL, being the UNDERWRITERS Laboratory, will underwrite the product in the case of defects or safety hazards. The government does no such thing.

I could go on, but would it be worth it? Are you going to insist on equating voluntary standards bodies like UL with government regulation?

 

[Mahatma Kane Jeeves]

How does UL recall a dangerous or defective product?

 

[Thanz]

1) Learn how businesses and their budgets work.

2) It is NOT the case that the cost will simply rise and everything will be as it was. They can't just "pass it on to the consumer" like many people think. Raising the price will reduce demand, and fewer people will be buying the product. It does direct harm to the economy.

Way to ignore the point, doofus. The cost/benefit analysis is done on a global scale. A company will examine what price their product can get in the marketplace with certain features, and see if they can produce it at a profit with those features and that price. If a company can make more money with a safer product, they will make it. If they think they can make more money with a potential death trap (Pinto) they make that.

Let's say our mythical company is chugging along in an unregulated market, producing a very safe product at a premium price. Regulations come in that say that certain standards have to be met. Our company already exceeds those standards, being far ahead on the safety curve. Are you really suggesting that the regulations (and the costs of compliance) are going to cause this company to make their product less safe? If you really think this, you are a complete doofus. There is no reason to expect this company to take the total amount of compliance from their safety budget.

No, but a company that has caused harm but remained within the letter of the regulation will find themselves in a much better position than they would have with no regulations at all.

So what? Who's to say that this company that is within "the letter of the regulation" would have made a product as safe as the regulations in their absence?

Because the cost/benefit ratio will be skewed the other way. It will cost them less to produce a safe product yet it will cost them more to produce a dangerous one.

Bull. This makes no logical sense whatsoever. Why would it cost more in a regulation free land to produce an unsafe product?

No, they can't; and I'd love to see you try and support your assertion that they can.

Sure they can. Why wouldn't they just meet the minimum standards for UL?

UL is NOT compulsory. That means they don't have to do it. That in and of itself keeps costs down since if they charge too much the company will find some other means or a competing organization will emerge.

UL performs the safety tests, and the costs of UL compliance go towards those tests. With regulations, the government forces the company to do the test AND prove to them the tests were done and result in compliance with the regulations. UL does not have that additional cost.

UL will also work with the companies on their cost management and try to keep costs as low as possible. The government doesn't even pretend to try to do this.

UL, being the UNDERWRITERS Laboratory, will underwrite the product in the case of defects or safety hazards. The government does no such thing.

I could go on, but would it be worth it? Are you going to insist on equating voluntary standards bodies like UL with government regulation?

None of this goes to my point. UL standards, just like gov't regs, are an external safety floor for a company to meet. You critized regs for being a minimum - complaining that companies will only do the minimum and nothing more. The sam can be said of UL. There is the same incentive to do the minimum for UL only as there is to just meet the regs.

 

[Valmorian]

Okay...I'll try and use small words this time.

And yet you wonder why so many people here gang up on you.

Do yourself a favour and after you've responded to a message, read it to yourself out loud and think about how it sounds.

There's probably a couple of reasons why SO MANY people are disagreeing with you, but just assuming it's because they're "stupid" is probably not valid. I'm leaning towards the excessive arrogance you seem to show with every post.

Hell, you never even admitted you were wrong about Caffiene in chocolate, and that was after you lashed out at multiple people who pointed out that it did AND gave sources. (Oh, pardon me, you said you MIGHT be wrong, after many people cited multiple sources. YOU, on the other hand, clung to a single source and decided it was more reliable. Why is that?)

----

On topic, I'm not terribly impressed with any kind of regulatory business. I think there's pros and cons for government and private regulatory standards.

You did point out a good one for Government Regulatory standards: No incentive for them to be cheap.

On the other hand, the pricate Regulatory standard has an incentive to be a little more forgiving of infringements. In the business I work at, there's a myriad of private standards that are supposed to be met. Meeting these standards is often laughable and meaningless, because they're so lax.

A good example of this is ISO9001. I've been with several companies that are ISO certified, as well as several that are not. There's really no discernable difference in the way either were run, except that the ISO9001 certified companies waste a lot of time and money when Audit time comes around, then go back to breaking the rules afterwards. Not only that, the 9001 companies I've been with have NOT met compliance multiple times, yet still get their compliance 'conditionally' if they 'make a few changes'.

To be fair, this would likely also happen with a government standard, but to say that private regulatory businesses would be more effective is not something I would be prepared to believe without a lot of evidence that contradicts my personal experiences in such adventures.

 

[Valmorian]

Way to ignore the point, doofus.

Ditto for you. Don't call him a doofus if you want a reasonable response. Not that I expect he will GIVE you one. For all his protestations about 'dodging', I've never seen anyone dodge as much as Shanek.

 

[shanek]

How does UL recall a dangerous or defective product?

It doesn't. But then, except in extreme situations, neither does the government. For example, as I've pointed out before the FDA has only recalled one drug in its entire history. All of the rest were recalled by the company.

FYI, there have been recalls of hair driers, toasters, and other products tested under UL. And they aren't recalled by the government.

 

[shanek]

[snip everything because I've already covered it]

Thanz, if you're not even going to read what I write, what's the point? What are you even trying to do here?

 

[shanek]

And yet you wonder why so many people here gang up on you.

If he hadn't completely ignored my point I wouldn't have been short with him. I'm really sick and tired of repeating myself over and over and over again with you people. Pretty much every single point people have brought up in this thread I have responded to before. What does it say about people who just spout out the same argument over and over again with no regard for any of the rebuttals?

 

[Valmorian]

If he hadn't completely ignored my point I wouldn't have been short with him. I'm really sick and tired of repeating myself over and over and over again with you people.

Maybe. Just MAYBE, the fault isn't with EVERYONE ELSE HERE?

Perhaps you're not reading the replies well enough? If you feel a point isn't being addressed, perhaps it might be because your point isn't being made clearly enough?

Pretty much every single point people have brought up in this thread I have responded to before. What does it say about people who just spout out the same argument over and over again with no regard for any of the rebuttals?

It may be that instead of there being dozens of people with some sort of flaw, that it might be the rebuttals that are the source of the flaw? Perhaps they're not particularly well expressed?

 

[Thanz]

What does it say about people who just spout out the same argument over and over again with no regard for any of the rebuttals?

Don't you realize that this is all you do, shanek? you do not actually respond to my points. By your arguments, Volvo would have just made cars that met the government standard, rather than being ahead of the safety curve for decades.

 

[shanek]

Don't you realize that this is all you do, shanek? you do not actually respond to my points. By your arguments, Volvo would have just made cars that met the government standard, rather than being ahead of the safety curve for decades.

See? This is exactly the kind of thing I'm talking about! Not only do I not deny that companies go above and beyond the government regulations, I have made that point numerous times in the past! The point, and this is at least the third time I have tried to point this out to you, is that the cost of regulatory compliance inhibits such companies from spending as much as they would like to on safety. Even if they do end up being "ahead of the safety curve," it obviously isn't anywhere near what it would have been if they had had more money to spend on researching, developing, and implementing safety measures.

There is nothing at all that is mutually exclusive between these two arguments. The fact that you have failed, yet again, to acknowledge my clairification speaks to the truth of what I said earlier.

 

[Thanz]

The point, and this is at least the third time I have tried to point this out to you, is that the cost of regulatory compliance inhibits such companies from spending as much as they would like to on safety. Even if they do end up being "ahead of the safety curve," it obviously isn't anywhere near what it would have been if they had had more money to spend on researching, developing, and implementing safety measures.

But this point is what you have spectacularly failed to support. There is no reason that the cost of regulatory compliance must necessarily come from the budget spent on design and safety research. It could come from lower wages to employees. It could come from cost cutting measures elsewhere - like marketing, for instance.

Your argument was that money spent on safety would be reduced dollar for dollar by the costs of regulatory compliance. For a company that is greatly concerned with safety, there is no reason to think that this will necessarily be the case. A safety conscious firm will also probably have less costs of compliance than one that must make alterations to its product.

You also ignore the firms that must do something to comply - ie, their products were not safe enough prior to the regulation. Why is this so if companies strive to be as safe as possible?

 

[shanek]

There is no reason that the cost of regulatory compliance must necessarily come from the budget spent on design and safety research.

Of course there is! Where else in the budget are you going to get that money from, marketing? Employee benefits? Understand that budgets are very complex things and companies don't like taking funds from unrelated line items to meet an extra expense, and in many cases doing so might even be considered fraud.

It could come from lower wages to employees.

Which would reduce their workforce and their output and result in lower profits. I don't think so.

It could come from cost cutting measures elsewhere - like marketing, for instance.

Which would result in a loss of sales. Again, I don't think so.

These are things that would become clear to you if you would just learn how economics works.

A safety conscious firm will also probably have less costs of compliance than one that must make alterations to its product.

That makes no sense. The former would have already made those "alterations" so they're still having to pay for it.

You also ignore the firms that must do something to comply - ie, their products were not safe enough prior to the regulation.

No, I didn't! I covered those! Right here:

[A] company that has caused harm but remained within the letter of the regulation will find themselves in a much better position [with regards to product liability] than they would have with no regulations at all.

And here:

Also, as I have repeatedly pointed out, the fear of litigation is a big factor in determining how much to spend on safety. Being in compliance with regulations gives them a big defense in court, and since their risk is now less, that would drive down the price of X.

Again, if you're not going to actually read what I say what's the point?

 

[Quasi]

Shanek,

Basically, most people will cheat if they are allowed to, including companies, religions, governments and any other body of people. Some choose not to and others choose to cheat. You need a third party (a complex government) to mediate and be a referee in free market capitolism otherwise we have severe problems. So while it may sound good at first, the type of touchy feeley political theories that we can live all together in peace is in reality to ignore the fact that we are still just one step away from animals. This is my take anyway, and this may be oversimplifying a bit, but we all seem to keep eachother in a sort of elastic check, between industry, the government and the individual.

 

[shanek]

Without asking you for evidence to support your claim, and without pointing out how you have completely misunderstood the Libertarian position, I would instead ask you just one question:

What possible justification is there for punishing the non-cheaters?

 

[Gem]

What possible justification is there for punishing the non-cheaters?

Because we haven't found a way to prevent the cheaters from selling bad products. We put regulations in place to prevent cheaters from ripping off customers. Of course, it's not perfect. The free market does nothing to prevent bad products from entering the market. Private organizations don't replace the government becase:
A) They are less known than government agencies (who heard of UL before Shanek spoke of it? How many people know of JREF against the paranormal?)
B) Companies that sell bad products can always make a fake "private safety checker comapny." They do this for selling quack medicine, I beleive.
C) A government agency has more power than a private business in terms of budget.

But by no means should we outlaw private organizations that help.

Once we find a way to prevent bad products cheaply and effeciently from entering the market, we can do away with those regulations.

Gem

 

[Thanz]

Of course there is! Where else in the budget are you going to get that money from, marketing? Employee benefits? Understand that budgets are very complex things and companies don't like taking funds from unrelated line items to meet an extra expense, and in many cases doing so might even be considered fraud.

I would love to hear how a company that decides not to reduce its R&D budget when faced with regulatory compliance costs might be considered fraud.

Regulatory compliance is a cost, just like rent, utilities, maintenance, etc. I don't see how it must be intrinsically linked to R&D or design, unless the company has to alter its design to comply. But I was talking about a company that is already ahead of the safety design regulations, like Volvo. So, when the government says "Thou shalt have seatbelts" Volvo not only has lap belts, but a three point restraining system (shoulder belt) as well. They don't need to alter anything to comply with the regulations, and I see no reason why the compliance costs come out of R&D, despite your insistence and vague fraud allegations.

Understand that budgets are complex things and when a company is faced with a new cost, there is nothing wrong with looking for cost cutting measures across the company in order to keep profit margins the same. It is far more likely that a company will try a number of things (including, perhaps, a slight increase in price) rather than to simply raise their hands and say "That's it! Can't develop any more safety stuff!"

Which would reduce their workforce and their output and result in lower profits. I don't think so.

Not necessarily. Comapnies can be creative. For example, they could hire some part time staff instead of paying overtime rates. This is just one example of a cost cutting measure that would not necessarily result in decreased productivity.

These are things that would become clear to you if you would just learn how economics works.

Please spare me the condescending attitude. I understand how economics works. I just disagree with your simple minded analysis. You assume that all the money will come from safety budgets. You have not provided anything to back that up. Instead, you think that insulting my knowledge of economics (without knowing what my knowledge of economics is) will somehow suffice. It doesn't.

That makes no sense. The former would have already made those "alterations" so they're still having to pay for it.

But they have made the alterations for reasons other than the regulations. Therefore, those alterations cannot be considered a "cost of compliance" with the regulation. The requirement that cars have seatbelts did not cost Volvo anything in terms of plant alterations or line changes.

No, I didn't! I covered those! Right here:

No, what you are ignoring is the fact that the regulations would have had a POSITIVE effect on the safety of products in the market, not the negative effect that you are claiming.

Your claim is that companies spend less on safety when they have to comply with regulations. This ignores the simple fact that a company that was not complying with the regulations, and not making as safe a product, will now be spending MORE on safety in order to comply with the regulations. For companies that decide to put out cheaper unsafe products, the regulation requires them to meet a minimum safety floor that they would NOT OTHERWISE MEET.

So, at the high end, I disagree that money spent on compliance (which may not be much at all) must come dollar for dollar from the budget for future safety innovations. This is especially true for a company like Volvo that consistently markets itself based on safety. At the low end, it requires a minimum safety floor.

 

[shanek]

Because we haven't found a way to prevent the cheaters from selling bad products.

Sure we have! There are many possible remedies for this that don't involve the punishment of the non-cheaters too, and I have discussed many of them here.

The free market does nothing to prevent bad products from entering the market.

I've shown many different times in many different threads that that is false.

Private organizations don't replace the government becase:
A) They are less known than government agencies (who heard of UL before Shanek spoke of it?

Anyone who bothered to even glance at the label on any electronic device. Besides, what does being well-known have to do with anything? Are people suddenly less protected if they don't happen to know about it?

B) Companies that sell bad products can always make a fake "private safety checker comapny."

Which doesn't work. Ask any company and they'll tell you how important reputation is to a brand name. Look at how much Tylenol suffered after people tampering with their product resulted in the death of (if memory serves) nine people, and that wasn't even their fault! It took them years to get their reputation back. They seriously considered rebranding.

C) A government agency has more power than a private business in terms of budget.

Support this. Also support it in light of the fact that the costs of regulatory compliance in this country are greater than all corporate profits combined.

Once we find a way to prevent bad products cheaply and effeciently from entering the market, we can do away with those regulations.

When has the government "done away" with anything it has imposed? Look on your phone bill—you're still paying the tax on the Spanish-American War!

 

[shanek]

I would love to hear how a company that decides not to reduce its R&D budget when faced with regulatory compliance costs might be considered fraud.

If they take money from an irrelevant portion of the budget to pay for something, this is exactly what a lot of people consider "funny bookkeeping."

Regulatory compliance is a cost, just like rent, utilities, maintenance, etc. I don't see how it must be intrinsically linked to R&D or design, unless the company has to alter its design to comply.

Because there isn't a separate line item for "regulatory compliance." It's a part of the cost of other aspects of doing business. If the regulations you're complying with are safety regulations, then they're budgeted along with the other safety-related items. Again, learn how businesses and budgets work.

But I was talking about a company that is already ahead of the safety design regulations, like Volvo. So, when the government says "Thou shalt have seatbelts" Volvo not only has lap belts, but a three point restraining system (shoulder belt) as well. They don't need to alter anything to comply with the regulations, and I see no reason why the compliance costs come out of R&D, despite your insistence and vague fraud allegations.

Because they still have to go through the red tape. I have pointed this out to you several times. Even if a company was in 100% compliance with the regulations, they still bear the costs of proving that to the government!

Please spare me the condescending attitude. I understand how economics works.

Then why do you keep making so many basic mistakes?

But they have made the alterations for reasons other than the regulations.

That doesn't matter. The cost is still there.

Therefore, those alterations cannot be considered a "cost of compliance" with the regulation.

I didn't say it was. You're not reading again. I said that the overall costs would still be comparable.

The requirement that cars have seatbelts did not cost Volvo anything in terms of plant alterations or line changes.

Because they had already implemented them. It still cost them money to do so, and that money came out of their budget for safety.

No, what you are ignoring is the fact that the regulations would have had a POSITIVE effect on the safety of products in the market, not the negative effect that you are claiming.

I'm "ignoring" it because it hasn't been supported in any way, shape, form, or fashion! And with all of the threads I have started with all of the evidence about the costs of regulatory compliance, I really don't see how any reasonable person can just sit there and flatly deny it like you do!

Your claim is that companies spend less on safety when they have to comply with regulations.

No, I don't. I'm simply saying that the cost of compliance places an extra financial burden on their ability to produce new safety features.

This ignores the simple fact that a company that was not complying with the regulations,

Again, I didn't ignore that at all. Please, just once, try actually reading what I'm writing!

 

[Thanz]

shanek -

As has happened before, I feel that at this point we are merely repeating ourselves to each other. I don't think that I will convince you of my position, and I don't think that you will convince me of yours. Rather than go on and on on this, I think it best that we agree to disagree on this and move on to argue another day.

I am sure that the same issues will come up again (the effect of regulations on safety), but hopefully they will be in a more specific context. I look forward to debating you again when we have something more concrete to talk about.