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Who regulates the regulators? We need to go beyond review-and-approval

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Re: Who regulates the regulators? We need to go beyond review-and-approval

#11

Post by pjscott »

js8 wrote: post #7
pjscott wrote: post #4

Earlier quoted context omitted.

> The regulator can still set legal penalties high enough to stop any innovation, if they want to. A liability model has a couple of advantages despite this: 1. The regulator has some slack to not set penalties insanely high. As long as they're seen enforcing those penalties against someone periodically, and as long as the penalties sound like a big number to the general public, they can look like Stern Serious Regul…

The liability model has a big downside, though. Because sometimes people in charge are idiots, they ignore common sense and make risks. So they possibly get burned only when accident happens, which costs human health and lives. Regulation is intended to prevent human harm by setting and enforcing a safety standard.

The usual hack for dealing with this is to require liability insurance. The insurer has incentives to set premiums at a level that reflect risk, along with reasonable contract conditions -- e.g. "Put guards on all your rotary saws, and yes we will be sending inspectors in to make sure they're being used properly."

(How is this different from an ordinary procedural regulator? Because the insurance market has competition, which means that the insurance companies aren't only trying to optimize for reducing risk -- they're trying to reduce risk efficiently. And if they're not very good at it, they can be outcompeted by someone who is.)

Re: Who regulates the regulators? We need to go beyond review-and-approval

#12

Post by biomcgary »

We don't have a succinct term that captures the real risks of over-regulation (see the Sapir-Whorf hypothesis). I recommend the term "metarisk" to describe the risks that come from being too risk averse. As in: you are too focused on the risk and don't understand the metarisk you are creating.

More generally, the public and journalists only seem to have the intellectual capacity for first-order thinking, not second-order (not speaking of individuals, per se, just the emergent dynamics).

I would love to see an experiment that creates an agency that regulates other agencies, which has the following mandate: require all agencies to demonstrate that the all proposed regulations and regulatory enforcement has an outcome that is optimally beneficial for society. The agency would have the power to fire employees of other agencies and to disband and reconstitute entire agencies.

Don't get hung up on defining optimality, the metaregulators' real job is just to have the regulators think twice before letting their block-everything reflex kick in.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#13

Post by AnthonyMouse »

js8 wrote: post #7
pjscott wrote: post #4

Earlier quoted context omitted.

> The regulator can still set legal penalties high enough to stop any innovation, if they want to. A liability model has a couple of advantages despite this: 1. The regulator has some slack to not set penalties insanely high. As long as they're seen enforcing those penalties against someone periodically, and as long as the penalties sound like a big number to the general public, they can look like Stern Serious Regul…

The liability model has a big downside, though. Because sometimes people in charge are idiots, they ignore common sense and make risks. So they possibly get burned only when accident happens, which costs human health and lives. Regulation is intended to prevent human harm by setting and enforcing a safety standard.

That only applies to large rare risks. If a risk is common, anyone who ignores it quickly goes out of business from the liability, so anyone still in business is taking effective measures. If a risk is rare and has a low impact, ignoring it frequently is the right thing to do.

You're left with things like plane crashes, which have to be minimized even if they're already rare. But that kind of regulation is extraordinarily expensive, and then the same regulatory model gets applied where it isn't needed.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#16

Post by PaulKeeble »

Another aspect of this is that a lot of regulation doesn't really work, it gets corrupted or bloated in numerous ways because it might help but actually doesn't. The separation between people doing the thing and those overseeing it leads to ineffective regulation that ends up not actually saving lives and also potentially costing a lot of manual time to adhere too.

I am not sure liability insurance is necessarily the complete answer. I think widening of criminal charges for breaching regulation should absolutely be pursued alongside liability for harms to humanity, there should be a basic duty of care to the the planet and its inhabitants and to the people that work for you that they are not harmed by your endeavours. We can't just continue allowing wage theft all the way up to mass destruction to the environment and treating it like its just a small fine that is necessary to resolve it. The system needs to expel those willing to take minor risk of getting caught for the large personal gain.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#17

Post by fallingknife »

majormajor wrote: post #2

So, summarizing the timeline here: Bad things happened. Review-and-approve regulation happened, things improved. Another bad thing happened, at a much lower scale. Regulators cracked down, professional admins replaced experts, things got buried in red tape. The author argues against review-and-approve but they don't present a better alternative than that first review-and-approve. They mention, but don't really endors…

I think a lot of it is timing, bias towards the status quo, and how much immediate tangible benefit there is to the consumer. Take the example of electricity. It's quite easy to build a coal power plant and extremely difficult to build a nuclear power plant even though the former is much dirtier and more dangerous than the latter. The reason is that when coal power plants were invented, the alternative was no electricity. It would have been politically impossible to make it difficult to build them or shut down existing plants. People would have rioted. Politicians would have been voted out. There were power plant accidents, horrific pollution, tens of thousands of deaths from coal mining disasters, but nobody is going to go back to not having power, so this was just accepted and became the status quo.

Then when nuclear power is invented and plants are built, the alternative is coal, not going without power. So when there are nuclear accidents, the regulators can go nuts and shut down plants, and prevent new ones from being built. Consumers don't care that much about what the source of their electricity is, and coal is the status quo, so no politician loses their seat for going back to it.

If nuclear power had been invented first, it and all its problems would have just been accepted as the cost of having electricity instead, and it would be extremely difficult to build coal plants.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#18

Post by BurningFrog »

js8 wrote: post #7
pjscott wrote: post #4

Earlier quoted context omitted.

> The regulator can still set legal penalties high enough to stop any innovation, if they want to. A liability model has a couple of advantages despite this: 1. The regulator has some slack to not set penalties insanely high. As long as they're seen enforcing those penalties against someone periodically, and as long as the penalties sound like a big number to the general public, they can look like Stern Serious Regul…

The liability model has a big downside, though. Because sometimes people in charge are idiots, they ignore common sense and make risks. So they possibly get burned only when accident happens, which costs human health and lives. Regulation is intended to prevent human harm by setting and enforcing a safety standard.

Aren't all models vulnerable to "sometimes people in charge are idiots"?

Re: Who regulates the regulators? We need to go beyond review-and-approval

#19

Post by konschubert »

js8 wrote: post #7
pjscott wrote: post #4

Earlier quoted context omitted.

> The regulator can still set legal penalties high enough to stop any innovation, if they want to. A liability model has a couple of advantages despite this: 1. The regulator has some slack to not set penalties insanely high. As long as they're seen enforcing those penalties against someone periodically, and as long as the penalties sound like a big number to the general public, they can look like Stern Serious Regul…

The liability model has a big downside, though. Because sometimes people in charge are idiots, they ignore common sense and make risks. So they possibly get burned only when accident happens, which costs human health and lives. Regulation is intended to prevent human harm by setting and enforcing a safety standard.

That is where mandatory liability insurance comes into play. Because the insurer will check... and if the people in charge are idiots, the insurance will charge them high premiums.

I am not sure how well this works in practice - but I think the idea has real merit.

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