Would you trust corporations to self-regulate?

reply to post by Dasher


You listed a lot of idealistic beliefs that are not held by the people you are following.

I can only pull back the curtain, I can't force you to look at the men behind it.

reply to post by poet1b


You must never have read a full annual report of a publically traded firm then, nor worked in a heavily regulated industry where sanctions are routine.

Go ahead and read a full annual report and in tiny font way back near the end, there is a listing of pending legal actions, many of which, depending on the industry are violations of regulations. The information is buried - it is buried because it is illegal for them not to publish it, but there is no real requirement to make the information consumable. Were folks to know that a firm had a dozen sanctions pending, they might make different choices. The same is the case for law suits pending regarding a firm. You want to go ahead and open a brokerage account, go ahead and try to find out how many folks are currently suing them. It is practically impossible because there is no transparency.

With respect to a franchise operation, everything is opaque. You have no way of finding out the actual financial performance of a firm that has both company and franchise stores. It is impossible due to the holes in the accounting rules within GAAP. If you can't ascertain the profitability, how are you to find out regulatory violations? You can't.

If you read my post, I am not opposed to regulations, per se. I am opposed to this regulatory regime within the Executive Branch that governs via fiat through regulations. I am opposed to the nonsensical regulations that are meaningless, productivity killing efforts that have no impact on society. Have regulations. Make them simple in design, results quantitative and easily understood and make them transparent. Every regulation should be able to be explained such that the value is understood and generally has value.

Take one example of one of the most onerous regulations in the US, Sarbanes/Oxley. All Sar/Box has done is line the pockets of the accounting and legal firms. It has not done anything but make companies less competetive and has led to the shifting of firms going public on the London exchange rather than the US exchanges. It has kept firms small by providing such a disincentive to expand by raising capital by going public that firms are purposefully stay small or buy themselves back from the public. Lehman Brothers, Bear Sterns, GM were all compliant with Sarbanes Oxley, as were most of the firms that have failed over the past several years. It, like Dodd/Frank are meaningless, do nothing efforts to create the impression that the government is taking action.

The entire system of government regulation needs to be scrapped and rebuilt from the bottom-up.

Originally posted by seachange
I'm not saying what Libertarians envision would be a utopia but rather I'm saying it would be something similar to Hong Kong where government spending is only 15% of the economy, giving them the closest thing to a free market you can find anywhere.

Hong Kong also has a lot less country to run up the bills than the US, so I would hope their government spending is a lot less than ours. I see what you're saying, though.

The biggest factor you are not considering here is that it does not take a majority of people to be good people for ethical shopping to work. Rather, it takes a minority of consumers who raise hell when there is something wrong going on.

Like the minority that sues for the coffee being too hot when they spill it on themselves?
I kid. But, just for the sake of discussion, what happens if, say, a consumer group raised a stink about not wanting nutra-sweet in their favorite carbonated beverage, brings a case, and wins, causing the company to remove the nutra-sweet. Victory for the consumers! Yay!

Then, a different consumer group makes a stink about "Hey, we really liked that nutra-sweet. Put it back!", and they bring a case to have it put back.

Which consumer group do you please? How many times to you make the company re-tool to toe the line?

I know it's sort of a silly example, but when companies, and by extension, economies, are being "regulated" by what amounts to the loudest, whiny-est consumer group (a position which is constantly changing), how is any stability expected? As newer, louder consumer groups make their issues known, wouldn't the "goalposts" be constantly changing? Wouldn't changes forced by the "minority" piss off the "majority"? They usually do. Wouldn't business be perpetually bogged down with trying to please every group that made a stink? That doesn't sound like a growth environment to me.

So you're telling me they'll skirt around the civil law regulations. I agree, but I don't agree that is an argument in favor of regulation. It is actually an argument against regulation for the simple reason that it just plain isn't very effective. And again, by saying "against regulation" does not mean I object to civil regulations but rather don't view them as the most effective solution. Corporations don't only try to slither out of civil lawsuits, but criminal cases too, as the Occupy Wall Street protests highlight. The things you're pointing out here are a reason progressives and libertarians should come together on the idea of ethical shopping practices as a solution and at least give that effort some focus. As far as I know, there has never been a movement that has tried to do that. But I do know the organisations I've referred to (fair trade, local labels, etc) show that such things are very much possible.

Y'know, I wouldn't be totally opposed to giving it a shot, but I still don't see ethical shopping as a viable solution, for a variety of reasons. Given, however, that the current system doesn't seem to be working very well, we should be open to any sensible alternative.

It is not working now, so I can't blame you for disagreeing. But, who is focusing on that as a solution? Left-wingers are focused on the Occupy Wall Street movement. Right wingers are focused on "anyone-but-Obama" or Ron Paul. That leaves virtually nobody left focusing on ethical shopping as the best solution, even though its been proven to be effective. To be honest I think its the one and only solution. Either start the nearly non-existent movement of ethical shopping or accept a fate of corporate doom.

I think that the one and only solution is going to end up being wait for the corps. to get too top heavy and collapse, then dig ourselves out of the rubble and start over, economically speaking. I hope I'm wrong.

reply to post by dolphinfan


Hey, that is a pretty good post.

I have looked at a few annual reports, and they all seem to be bogged down with lawsuits.

I have also mainly worked in the most regulated industries out there, at the end where compliance is actually met. My opinion is that over all, regulations are not that bad, it is the way corporations react to them that is the problem. Regs force companies to do the things they should be doing, but many go way overboard, IMO, middle management working to justify their jobs. Gov regulators concentrate far too much on paperwork, the problem being that the college grads who do the regulating have little or no real world experience. They need more people who actually deal with the tech end, and know how things are done. It is the local regs which are often the most unreasonable, and the regulators have too much of a power trip. Like any policing agency, there are good cops and bad cops.

The most organized group I ever worked in is the U.S. Navy, far and above any industry I have ever worked at. I think what makes them so much better organized is that the Navy is ran by the enlisted, not college grads, but the people who do the work, and made their way up the ranks.

Insurance companies also regulate business, and IMO opinion, the requirements put out by the insurance companies are the worst. This is where I have dealt with the most ridiculous rules being put into place. And they pull in the lions share of the money.

Yeah, regulations could be much more effective, and I think Clinton had the right idea with third way economics. The goal should be to set industry standards, where everyone knows what must be done. The bigger problem is that the bean counters are always looking for ways to cut budgets at the lower end, to raise their bonuses.

The most effective private sector businesses I have worked for are small corporations, and big corporations the worst. The small corporations are more interested in giving people work who demonstrate that they are willing and able to do the work. Back in the day, most software developers didn't have degrees. They got into programming, and made things happen. Living in Silicon Valley, I have had a unique perspective to see how things play out. The non-college grads who did most of the innovation started making very good salaries, and then the big corps moved in, and let all of the non-degreed people go, and hired college grads from foreign countries willing to work for less, and software has gone downhill since, IMO. What Intel giveth, Microsoft taketh away. Know what I mean? The big corporations are all very centrally managed, they want to dictate to people how to do things, when the people calling the shots have never done the actual work. They screw things up, and waste a lot of money going nowhere. They survive by market domination. Thus quality has gone down hill quite a bit over the last decade.

It is also my opinion that a great many of the regs created over the last decade were designed to allow corporations to skirt the legitimate requirements. The repubs who controlled congress let the lobbyists write the regs, and this is what we got. Big bonuses for the corporate execs, all at the loss of good business. The people in the lower ranks get screwed, and the big wigs retire with fat bank accounts.

An even bigger problem is the lawsuits, and the ever increasing involvement of lawyers in everything. This works in favor of the giant corps who can afford the collateral of legal costs, and sinks the smaller businesses, especially start ups. The smaller more efficient corporations get hamstrung by legal costs, and the big corps buy up their innovations on the cheap.

The answer is to get the lawyers and the judges out of the process by developing solid standards. Stop the haggling, meet the requirements, or pay the consequences. With vague standards, the parasites always profit, the insurance companies, the lawyers, and especially the bankers are all the same group sucking up the profits, and the people putting their retirement accounts into the market, and the people who create the technology are the ones who loose.

That is in a nutshell how it works. Above it all is that we can produce more than we need. Planned obsolescence is what the ICs thrive on. I could elaborate more, but too busy.

reply to post by subject x


And Hong Kong is also communistic. The perfect free market ideal, communism.

It pretty much proves my point.

Originally posted by poet1b
reply to post by subject x

 

And Hong Kong is also communistic. The perfect free market ideal, communism.

It pretty much proves my point.

The workers own the means of production in Hong Kong? Tell me about it.

reply to post by seachange


While Hong Kong is technically the most capitalist country in the world (free of a bunch of taxes and government regulations) it is anything but a free market.

Govt backs cartels

IS HONG KONG A FREE MARKET?

reply to post by subject x


About as much as I trust rapists to self-trial.

No wait. less. A rapist can actually feel guilt for their crime.

reply to post by seachange

The workers own the means of production in Hong Kong? Tell me about it.

Of course they do, just like the workers own all of China.

After all, it is a free market. Damn the regulations, full speed ahead.

Originally posted by subject x

Originally posted by DarthMuerte
The free market would regulate itself

Yeah, that's what Dr. Paul says, too.
Could you explain how it would do that?

It can't self regulate.The theory of the free market self regulating is a pipe dream because it relies solely on the consumer to research every facet of a company before purchasing anything from them. Now stop and think about last weeks grocery list and then having to research the products you purchased possibly to the component level.

This is the problem with Ron Paul he is so married to an ideology that looks real good in theory, but falls short in practice. Which is how we got the regulations to begin with. This is a man that is so married to an ideology that he can't even bring himself to admit civil rights legislation was a positive thing. Because the market would have regulated Jim Crow too.

Fact remains and that is that they haven't started yet and there is no indication that hey have started.

Originally posted by KeliOnyx
It can't self regulate.The theory of the free market self regulating is a pipe dream because it relies solely on the consumer to research every facet of a company before purchasing anything from them. Now stop and think about last weeks grocery list and then having to research the products you purchased possibly to the component level.

What's more is that a self-regulating market is under absolutely no compunction to provide a single scrap of information; so the customer cannot be informed.

This is the problem with Ron Paul he is so married to an ideology that looks real good in theory, but falls short in practice. Which is how we got the regulations to begin with. This is a man that is so married to an ideology that he can't even bring himself to admit civil rights legislation was a positive thing. Because the market would have regulated Jim Crow too.

Interesting you would bring up Jim Crow. Know what's funny? southern states honestly, truly did not have laws stating "blacks cannot do this and that" - after all, such laws would clearly be against the 14th amendment. Jim crow was a product of a market with no regulations. Business in the south catered to the majority market - racist whites, who not coincidentally also ran the businesses - and the states simply upheld the rights of those businesses to conduct business as they saw fit.

I honestly, truly believe that Paul has no idea what the results of his ideology are... Which does elevate him above the rest of his fellow Republicans who have the exact same economic ideology; they DO know what the results of it are, and that's why they want to implement it. Paul though.. .Strikes me as an idealist whose chosen to stay ignorant rather than take off his fashionable rosy sunglasses.

If only Americans had the back bone to stand up for whats right we wouldnt have to worry about govt regulating everything.....there are too many kool-aid drinkers who would rather rely on the District of Criminals to make sure that these corps arent doing terrible things (well only if they dont pay there hush money)....I think if we all informed ourselves we could limit regulation