This is an opinion piece about how regulation protects the public from bad companies who act in their own self interest, at the expense of the greater good (the public). We cover topics such as privacy, the speed that regulations are created, car safety, and food safety. We also talk about how regulation is not a bad thing for companies who actually want to produce a good product, it actually helps them to make more money. So bring on the red tape.
Regulation
Regulation is a system of rules and guidelines to promote safety and fairness in markets. It is the system that allows for people to participate in markets, be they producers or consumers. For example, in the 1800s the first car accident took place. Since then, the US government decided to allow the market for the car industry to take off, but for some time there were no real rules to regulate the industry. They did not know what to expect, so they left a lot of the industry regulation to the states. Seemed reasonable.
The first step was to establish a national car safety standard. This is a standard that all cars must meet, in order to be allowed on our roads. If a car does not meet this standard, it is not allowed on our roads. That’s how regulation works best: it applies to everyone.
Much later on, when a new innovation in safety came out (the seat belt), it was up to the regulators to take the next step and decide that all cars had to have seat belts. This is a good example because seat belts are a safety regulation. Seat belts save lives and reduce the human cost of car accidents.
Things are different now, in 2021. Everything is changing so fast. Let’s take a look at a perfect example.
The problem
Big companies like Google, Facebook and Amazon are monopolies. They have grown to the point where they have so much control over the market that they can manipulate it, and they do. They provide a free service to the public, and they make a lot of money doing it, but they are not doing it to help the public. They are doing it to help themselves. It is in their best interest to have the maximum amount of information on their users, but not to help their users the most.
It’s a classic case of what is best for the company is not what is best for the public. It’s a fast changing industry, which means that regulation has yet to catch up, and so therefore this big problem has popped up unnoticed, and gone on for quite some time before everyone realized.
The solution
Regulation, of course. But not just any regulation, fast, tech-savvy, industry-aware regulation. We need better, faster regulation to catch these cases, before they become a huge problem and sway elections. The trouble with this solution is that the government is a big, slow moving beast. It is hard for the government to catch up to fast changing markets. There is a lot of red tape involved in the process of regulation, and the cost of regulation is very high.
We can be our own worst enemy
The above example has mostly talked about how regulation exists to protect the consumers from large companies. However, regulation can also protect citizens from themselves. While it’s important that the government is big and strong (at least, strong enough to stand up to big corporates) it’s also important that the government does not become overbearing and infringe upon the rights of citizens, artists and protesters. It’s important that regulation does not stifle artistic expression, or valid and real dissent against a government that is hurting it’s people.
Take for example, the Food and Drug administration. They are a great example of regulators, who have been quick to stop harmful substances from reaching the public, while also giving breathing room to companies who want to produce and sell foods/drugs that require adult discipline to use recreationally, such as alcohol or other new products.
Trust
When a company’s primary goal is to make money, it is also important that they do not make money in a way that is against the law. They have to earn that money in a way that does not violate consumer trust. For example, once a company has reached a certain size, it has enough power not to follow regulations, by hiring lots of lobbyists, bribing officials and using their significant wealth and power to more easily hide their illegal activities. If a company has the power to do this, it is safe to assume (from a regulator’s point of view), that it will do so. This is why it is important to regulate companies at a point before they reach that level, and stay on their case. The government needs to intervene early and with great strength when a company is going off the rails and committing crimes.
On the other hand, regulation is not a bad thing for companies who want to produce a good product. In fact, regulation helps good companies who want to produce a good product with honest means, because it is bad for companies who try to cut corners (because they will not be able to make as much money).
So in conclusion, regulation is a good thing (as long as it’s fast!), and we need more of it.