Topic: Regulation is not the answer-obviously (Read 1803 times)

First off, thanks for having a polite discussion!  I really enjoyed it.  Well the model you have proposed is only one model, businesses like the BBB, underwriters labs, consumer reports, etc could all be applied to bitcoin.  Those models are private and have already proven quite successful, i have no doubts that the same type of system could be applied to bitcoin.  I dont know about you, but before I buy a product or go out to eat, i look at amazon reviews and urban spoon everytime.  Its just part of my life, millions of other people do as well.  i see no reason why bitcoin accountability could not be privatized, especially given the public nature of the blockchain.

Great conversation friend, best of luck to you.  Put your coins in cold storage if you have not already.  I prepared a guide on it here for anyone who wants to know how, its a bit long winded but thats how i speak:

http://www.reddit.com/r/Bitcoin/comments/1u5yn6/easy_to_use_guide_how_to_get_bitcoin_safely_store/

Everybody be safe and do your due diligence.

"I have some ideas on how free market regulation may be profitable..."  I have some ideas how profitability is probably the worst motive for regulation.  No, not ideas, actual real examples.  Already mentioned the credit rating agencies.  Paying a "private regulatory company" is how alot of industry used to work, and some low key areas still do.  Where  quality rather than safety is prime concern, or it doesn't really matter.  We turned to the state to regulate because private or industry regulation often doesn't work very well - the regulators in a competitive regulation world are likly  to undercut each other in cost and standards to get the business.  Then which one do you trust?  

Really the idea of commercial regulation in some areas isn't just daft it seems like a contradiction.  If there's a company signing off restaurants as clean, are they going to be as rigorous as a local authority?  One sends round an agent who does some checks and refuses to issue a sticker if the standard isn't met.  The other sends round an agent who does some checks and shuts you down if the standard isn't met.  Which one are you really going to take your family to?  

Clearly, i'm not going to convince you, there some deep ideological objection to the state going on.  At least understand that some industries are large because they have to be, for the capital required to invest in them, not because of the state.   I dont *like* regulation, only recognise theres a place for it, and sometimes the state is the only* trustworthy regulator (* or most? least worst?  ).  

Those are all states not free markets.  That's like saying somalia is a anarchist libertarian paradise when in reality it is a failed state that is now being torn to pieces by states trying to take it over.

I just want to point out (partially to Pening's point), that countries like Russia, Sudan, Turkmenistan and some others have horrific fatality / poor maintenance airline records going back years because there is such lax or nonexistant regulation, and they still do a shit ton of business so I'm not sure why "Free Market" hasn't wiped them out yet.

edit: forgot the word Airline

Because I am for regulation, I want the strictest and strongest regulation which can only be provided by a free market.  I have some ideas on how free market regulation may be profitable, but remember, the free market is unlimited and it's ways to produce value are infinite so there is no way i could know the most efficient way it would work.  I would guess that businesses could pay a membership or fee to be inspected by a private regulatory company who would then endorse them as long as the paying company met certain requirements per their industry.  Insurance companies would benefit from having healthy and safe locations to reduce the number of claims so therefore they may have an incentive to pay.  I would also assume some individuals would pay to benefit from these services as well. You just have to follow the incentives.   These are just a few ideas, I am no expert.

I was aware that this was the model of phone companies previously, but again, remember that corporations are creations of the state and would not exist at such a large scale in a free market to do practically no barriers to entry other than natural ones.  Under our current crapitalism system, if the government disapeared tomorrow, some people may get locked into systems, but given the complete openness of the market, providers link ting and smaller services would have a much easier time stealing customers from the locked down services.  It would only be necessary to say: "On our service, you can talk to this many more people than you can on x locked down service."  Problem solved.

That wine company would be out of business nearly immediately, especially if they damaged their customers bodies.  Remember that in a free society, property rights are not weakened by government; eminent domain, asset forfeiture, theft by taxation, corporate corruption, etc.  Insurance agents for the damaged party would have claim to the assets of the wine seller and they would be able to prove the wine was tainted.  Dispute resolution organizations would work with both insurance organizations to make the victim whole.  No one would ever buy wine there again, problem solved and the incentives are correct.

"private quality assurance companies" So regulation then.  I take from this you are anti government, not anti regulation.  We just have to trust the private regulator has our best interest in mind, they have an incentive to, right?  Who pays for them?  The party being regulated.  Hang on...
cf. credit rating agencies for example of how this can work out.

"it would not benefit phone companies to do so [use their own technology]".  I think maybe you misread this, you could still terminate on any other network. I take from this you are poorly informed.  This used to be the model of mobile phones in the US, consequently the handsets and their functionality were years behind what was available in Europe and Korea where common standard was observed.  And in a previous era phone company's did restrict you to their network, as did early electricity companies: to lock you in to their eco-system, forcing you to buy appliances from them.  You don't believe in a free market people will happily get locked into a private eco-system?  cf. Apple.  (fortunatly there's broad enough market to exist outside the Apple Appstore: this is only an illustration that incentives differ between business models, im not saying Apple should be regulated).

Likewise people did (possibly still do) buy cheap anti-freeze wine because its cheap and didn't know any better.  Car manufactures had to be forced to add safety features and do so consistently.  I didn't chose the examples at random, they are all good references to why some central regulation is necessary sometimes.

I don't believe anything they say given what they do for a living.  They may not go after it in the open, but i would not be surprised if the ddos attacks, other attacks and bad press are a result of an organized campaign to attack bitcoin.  There is now way they would just allow bitcoin to take their power away.

At least the Federal Reserve doesn't feel a need to regulate bitcoin. Chair Janet Yellen just testified before the Senate Banking Committee today. You'll remember Senator Manchin is the committe member who called for bitcoin ban yesterday. She said “It’s important to understand that this is a payment innovation that’s happening outside the banking industry. The Federal Reserve simply does not have the authority to regulate bitcoin in any way.” http://bitjuice.com/2014/02/27/janet-yellen-fed-will-steer-clear-of-bitcoin/

I would again contest that there is less maintenance where regulation is lax or not followed, bear in mind that we exist in an entirely fascist crapitalist economy.

I never said regulation had to be restrictive to large organizations.

Of course i would want someone to regulate wine production, that would occur in a free market because people don't want to drink wine made from antifreeze and anyone trying that would soon go out of business especially in this age of information.  People are not stupid cattle, they can tell when something sucks but even more than that, private quality assurance companies would simply assert more influence over the market than they already do-filling the gap left by ineffective monopolized services.

About phones, it would not benefit phone companies to do so, they benefit from people talking to each other so they would be severly limiting themselves and customers do not want phones that only work on one platform so they would not tolerate that either.  think about incentives.  why would it benefit phone companies to restrict connections from competitors in the absence of the state?  In truth, in a free market you wouldn't have 3-4 big phone companies, you would have hundreds of small ones most likely.

Cars would still have breaklights in the absence of government since in the absence of government people still want to be safe, probably even more since the onus of safety would be on the care manufactures even more since they would be routinely reviewed by inspection companies or if they refused would lose reputation and business.  How would it benefit car companies to stop installing breaklights when the state goes away?

Eveything you said the market can and would provide better.  Who knows, we might have flying cars or be using drone transportation if the state did not prevent drones for commercial use or stifle emerging technologies which would damage big corporations.  Imagine, in a free market no one would be able to stop an emerging technology.  Bitcoin probably would have been invented 20 years ago.

I would disagree that they would need to be large and poweful, they would be naturally limited since they are market based they cannot use coercion.  Imagine if your restaurant got F's on BBB, consumer reports, urban spoon, etc.  Do you think you would get less or more business?  Do you think you would possibly fail?

Government is based on violating everyone's rights by it's very existence and extracting it's funding involuntarily using force and using force up to the point of death or caging to enforce its whims which it calls law.  Government created law is not true law.  Market organizations cannot initiate force, so therefore they cannot be government.

Because there already is less maintenance where regulation is lax or not followed.  There's starkly different safety records between European/US airlines than those from some other, less rigorous parts of the world.  

You are making the misguided assumption that regulation has to be heavy handed, restrictive and only compliance only possible for large organisations.  Consider wine making, wouldn't you wont some approval process to confirm that the small winery is really making wine from only grape juice not from mixing it a bit of anti-freeze?  What about technology, would you be happy for all mobile phone networks to use their own technology, so you can only get phones on specific network through them.  Or would you rather a standard where the same phones are usable across continent and the world, including those made by new start ups that only have to conform to the specification not get buy in from the network?  Maybe you wouldn't mind if cars didn't have brake lights or indicators mandated?

Its certainly true that some regulation can be put up to protect established players and vested interests, but equally it can sometimes level the playing field.  And some is just downright practical and sensible, outweighing the drawbacks.  Regulation isn't bad itself: bad regulation is bad.

So....Government?

Which is why the existence of that power should not be tolerated.  Don't hit, don't steal, don't kill, should apply to all regardless of what costume they are wearing.  Governments get a "morality pass" in our modern world and they use double speak to do so; murder is collateral damage or war, stealing is taxes or eminent domain or asset forfeiture, beating someone to death is protecting and serving, it goes on forever.  

Its astonishing to me that in countries like greece and egypt, people overthrow a state only to impose a new state.  They have some leader they like and they think that their problems are solved once he/she is in.  What happens when he/she is gone? Now your "enemy" has control of the reigns of power and can undo everything you wanted.  Plus, its immoral to force your ruler on people who just want to be free and left alone and who are not harming anyone else.  Its immoral to force others to pay for what you want, you can use lies like "greater good" but that's just a smoke screen.  When will people get it that freedom and responsibility are the actual real greatest good for all and that they don't need a master? It's better to be a free than a slave.

I hope bitcoin destroys their monetary monopoly.

100% agreed, monopolies are a bad thing.

The truth is that we need no governments, just large powerful consumer protection organizations that ensure that everybody is well informed and free to choose at all times. I need no FDA to allow or disallow a drug as long as they do a thorough investigation and publish the results so that I (or an expert that works for me, like a doctor) can make an informed decision.

But the sad truth is also that there are many mentally disturbed people who just want to be in power.

Power corrupts, absolute power corrupts absolutely.  Transparency/honesty and monopoly are antithetical.

fda has killed millions due to keeping drugs off the market or allowing unsafe drugs.  Again, a monopoly that does not have to compete in the market has no incentive to do a good job, especially when they can extract their money from "customers" at gunpoint.

I wish what you said was true, but there is a reason why the state monopolizes certain services like road building, policing, judging, etc.  it's because they want people to see them as essential: "But without the state, who would police, build the roads, etc?"  The truth is all of these services could be provided without coercion and violence and provided better with competition within the market.  Would people continue to pay a private security firm if they killed thousands of their customers every year and raided them at night for non-crimes?  I doubt it. The detroit private police have been in business for 20 years without killing a single person, for them, their main priority is to keep the people safe whereas state monopolized police's main incentive is to "officer safety" at the expense of people.

exactly, could be good or bad and main thing required to be good is transparency and honest people.

see, regulations can be good or bad, in the case of pharma or airplanes:

pharma: good regulation ensures substances are clean and properly labelled. bad regulations outlaw substances and deprive you from free choice what to put into your body.

airplanes: good regulation makes sure planes don't fall from the sky and ticket pricing is proper. bad regulations create no-fly-lists and deprive you from free choice where to travel.

It is the government's job to keep the roads in good conditions, not to impose speed limits, generally speaking.

If there a monopoly of violence, it will always be captured and controlled by the powerful-that;s why the state can never be reformed or made better by "getting the right guy or group in there".  Power should be distributed not centralized, you would think bitcoin users would understand this given their preference for decentralization and a free market currency.  As you have rightly pointed out, the licensing scheme is nothing more than a massive barrier to entry that affected me personally by preventing me from opening a bitcoin atm.

Why do you assume there will be less maintenance in a free market where the state does not exist to protect the big boys?  On a fundamental level, what your saying is: "mommy, daddy, do it for me".  The beauty of the market is that the market will actually do it for you given the chance because someone will benefit from doing it for you.

I am for voluntary free market regulation, not regulation which extracts its funding through theft and enforces its whims at gunpoint and is not effective due to regulatory capture.  In a free market, organizations actually suffer as a result of their bad service-there are no bailouts(with stolen money).