A Philosopher's Blog

Regulating the New Economy: Uber, Lyft & Fingerprinting

Posted in Business, Ethics, Law, Philosophy by Michael LaBossiere on February 22, 2016

Companies like Uber and Lyft profess to be shaking up the old economy. As has happened with every shake up, there has been a legal up—that is, endeavors to regulate the changes. In some cases, these regulations are at the behest of influential players in the established economic order who wish to maintain their economic dominance. In other cases, the regulations are motivated for more benign reasons, such as protecting the public.

As this is being written, Uber and Lyft are involved in a legal struggle in Texas. The city of Austin is considering a program for fingerprinting drivers of these services. Lyft and Uber are both opposed to this—mainly on the grounds that they fear this will start the slow march towards ever-increasing regulation. This is not the first shootout in Texas over fingerprinting: Houston mandated the fingerprinting of drivers and Lyft responded by abandoning the city. Uber elected to remain and operate within the requirement. While the matter of fingerprinting is interesting in itself and will be the focus of the discussion to follow, there is also the general matter of imposing new regulations on these new approaches to business. Not being a lawyer, I will focus on the ethics of this matter on the grounds that I contend regulatory laws and policies must have a solid moral foundation.

When approaching the regulation of a new business, it is natural to look for precedents in regards to existing businesses. In the case of Uber and Lyft, it is natural to turn to the regulation of taxi and limousine companies on the grounds that they offer the same basic service: transportation via automobiles. In general, taxi drivers are required to undergo fingerprinting and a background check. As should be expected, those in favor of having Lyft and Uber drivers undergo this process point to this fact and some make an argument based on consistency.

Consistency requires that the regulation of a new business should be modeled on the regulations of older businesses to the degree the businesses resemble each other. There are two foundations for consistency: logic and fairness. In regards to logic, the reasons that justify the regulations of the old business would apply to the new business to the degree they resemble each other. As such, if the fingerprinting of taxi drivers is justified, then the fingerprinting of Uber and Lyft drivers would be justified to the degree that the businesses have relevant similarities.

Fairness, which is a matter of ethics, requires that businesses that are relevantly similar be treated in similar ways. To use a specific example, if Lyft and Uber were able to avoid regulations that taxi companies have to deal with, then this would provide an unjust advantage—at least to the degree that Lyft and Uber are like taxi companies.

Companies like Uber and Lyft often try to avoid regulation by arguing that there are relevant differences between their companies and their competition such that they should not be subject to the same regulations. In the case of these ride sharing services, the two main concerns are whether or not these companies are relevantly similar to taxi companies and whether or not their drivers are relevantly similar to taxi drivers. The resemblance or lack thereof is not all or nothing: ride sharing services might be the same as taxi services in some important ways and very different in equally important ways.

While this is a specific matter about fingerprinting drivers, the general principle here is that if regulation of one aspect of a business is warranted, then it is also warranted in regards to businesses that are relevantly similar. As such, this principle would also apply to companies like Airbnd.

In the case of fingerprinting and background checks for drivers, I would contend that the ride sharing services are similar in relevant ways. After all, whether it is an Uber or a taxi, the passenger is put into a position of considerable vulnerability. As such, if the fingerprinting of taxi drivers is warranted, so is the fingerprinting of Uber and Lyft drivers. There is, of course, still the question of warrant. This leads to the general matter of justifying business regulations.

The first concern in regards to business regulations (and any laws that require or forbid) is whether or not there is a harm that is significant enough to justify regulation. As I usually do in such matters, I follow Mill’s principle of harm: the only justification for imposing on the liberty of a fully functioning adult is the prevention of harm to others. This is obviously subject to debate, but Mill’s arguments are rather compelling. Even if this principle is accepted, there is still a vast territory of dispute regarding the significance of the harms—that is, sorting out what level of harm justifies which level of regulation. To use a concrete example, some contend that even a submicroscopic level of voter fraud justifies a buffet of regulations ranging from voter ID requirements to ending early voting. To use another concrete example, some contend that any increase in gun regulations is unacceptable even in the face of significant levels of gun related deaths.

In the case at hand, the concern is whether or not there is a danger to public safety on the part of drive sharing drivers that needs to be addressed. It is clear that there is a danger—a driver could kidnap, assault or kill a passenger. However, the main issue here is whether or not the likelihood of such harms is high enough to warrant the imposition of fingerprinting. On the one hand, the fingerprinting is not a big deal in terms of time and cost. On the other hand, it is not without cost and the risk of attack by a driver is probably exceptionally low. In any case, the dispute comes down to a factual issue about the odds of attacks and a value assessment regarding the balance between the cost of the regulation (in terms of money, time, imposition, rights and so on) and the cost of the harm. My opinion is that fingerprinting does not seem an undue imposition given the (rather low) risk—but I do not have a very strong opinion on this point.

The second concern is the efficacy of the regulations in regards to the harm. There could be a significant harm that would warrant regulation to protect people, but the proposed regulation might be ineffective at achieving the goal. To use the Uber and Lyft example, the danger presented by drivers might be regarded as significant enough to justify imposing mandatory fingerprinting and the cost of said fingerprinting might be regarded as reasonable, but it might be the case that fingerprinting would not actually make passengers safer. To use another example, it might be true that voter fraud is a significant problem, but it could be the case that requiring voter ID would do nothing to address the fraud.

Since the justification for regulation is the prevention of harm, ineffective regulation would be unwarranted—provided that the defect lies in the regulation and not in, for example, a failure to actually enforce the regulations.

In the case of fingerprinting, it would seem to have some efficacy in screening out people who already have a criminal background. However, it would obviously not screen out people who do not have a record yet might present a danger. Because of this potential efficacy, I would not be opposed to requiring ride sharing drivers to undergo fingerprinting—but I am not strongly committed to this position and could easily change my position in the face of reasonable arguments.


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The Sharing Economy II: Taxes

Posted in Business, Ethics, Law, Philosophy by Michael LaBossiere on July 25, 2014
Sheraton Hotel

Sheraton Hotel (Photo credit: kevin dooley)

In my previous essay on the new sharing economy I discussed the matter of regulation in regards to such companies as Uber and Airbnb. In this essay, I’ll cover the subjects of taxes.

As with regulation, some people are quite opposed to taxes. Other people are fine with taxes—at least with imposing taxes on others. In general, though, people prefer to not pay taxes. As such, it is hardly a surprise that the new sharing economy includes various attempts to avoid taxes. One example of this is the case of services like Airbnb. On the face of it, these services are just providing a means by which a person can rent out his spare room, condo or apartment. For example, a person who will be in another state for a few months might use Airbnd to rent out his apartment so he can have some income to offset the rent. Looked at one way, this service is just a more organized version of the old informal economy in which people do a sublease, rent out their camp, or get a temporary tenant for their house.

One aspect of the informal economy is that taxes are usually not collected. For example, if Professor Sally informally rents out her house to her grad student Bob while she is in Europe as a visiting professor, Professor Sally and Bob will almost certainly not pay taxes—although Bill and Sally would certainly be involved with tax payments if Bob was renting a hotel room from Sally. While there are no doubt people who would like taxes paid on even informal transactions such as this, the informal nature of these transactions tend to make this impractical—this part of the traditional informal economy is small and decentralized so that having a tax system would be cost prohibitive in terms of what is gained in regards to the public good. There is also the legitimate concern that such private transactions (“okay, you can stay at my house for two months while I am in Europe, but you need to pay the utility bills, take care of the plants and walk my dog”) can fall outside of the legitimate domain of state control.

However, when a company such as Airbnd gets involved, then things change. The once purely informal economy becomes centralized around companies and there is also an increase in the scale of operations. After all, it is one thing if Professor Sally’s grad student is paying a modest fee to stay in her house while she is in Europe, it is quite another if Professor Sally starts running her house as a hotel. It also becomes a somewhat different matter if the number of people renting out property increases significantly. To be clear, there would seem to be three important changes.  The first would be the centralization. Instead of people reaching informal agreements as individuals (who often know each other), these would be actual business transactions through a central company. The second would be the character of the process—short term renting out via a company would be rather closer to the hotel model than to the old informal model. The third would be the number of people involved: the sharing economy would presumably be considerably larger than the old informal economy.

From a practical standpoint, two of the changes could be used to justify using a similar tax approach to the sharing economy as is used in the traditional business economy (such as that of hotels). To be specific, with a centralized company and a large operation the collection of taxes becomes a more practical matter.

From a moral standpoint, if it is acceptable for the businesses with the same model (such as the traditional hotel) to have taxes imposed, then the same would seem to apply to the new sharing economy. So, if Sally would have to handle taxes if she ran a traditional hotel, then she should have to do the same if she ran her sharing economy hotel through an online service like Airbnb. Or perhaps Airbnb would be the one to handle the taxes.

Naturally enough, it might be wondered why taxes should be imposed on the new sharing economy—even if the new sharing economy is rather similar to aspects of the old economy. Of course, the people who make money through sharing rides or apartments do pay taxes for that income. However, there has been some controversy over services like Airbnb paying the hotel tax.

One reason for sharing companies to pay taxes and fees like traditional companies that they are analogous to is fairness. After all, the free market is not as free if some companies enjoy special breaks. Another reason is that the taxes and fees are needed to pay the public services and infrastructure that such companies (and their sharers) utilize. It might be contended that this is already covered by the taxes paid by individuals for their income. However, by that logic, businesses would seem to be exempt from taxes and fees on the grounds that their employees pay taxes.

Also, the growth of the sharing economy imposes new costs on the community in a way comparable to the costs of having a similar business. For example, having many Uber drivers in an area is like adding a large cab company to the area. As another example, having Airbnb rentals in a community makes the area more like a hotel area, with the accompanying burden on the community. As such, if the community (which includes many people who are not part of the sharing economy) faces increased costs then it is clearly acceptable to pass these costs on to those who benefit from this new economy.

There is also the cost of regulating the industry—as noted in my previous essay, when the sharing economy becomes comparable to the normal businesses (such as hotels and cab companies), then comparable public good (such as safety) regulations should apply. Naturally, these come with costs and it makes sense that the costs should be connected to the profits, rather than just be taken from the community in general. For example, with non-professional drivers acting like cab drivers and people renting out apartments and homes like hotels, there are legitimate concerns about public safety. Cab companies and hotels bear some of the cost of their regulation and so too should the sharing companies.

Naturally, there is still the more general debate about what is a fair tax/fee and concerns about the impact of taxes on the economy. However, it seems reasonable to believe that the sharing economy is analogous to the non-sharing economy and that it should bear a fair share of costs imposed upon the community.


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Proposal: Transparent Lobbying

Posted in Business, Law, Philosophy, Politics by Michael LaBossiere on November 5, 2011

Money talks...

While I recognize that lobbying is a legitimate part of the democratic process, I also recognize that it provides an avenue by which various interests can exert undue influence in politics, often to the detriment of the general good.

I am not so foolish as to advocate banning lobbying. As I have noted, it does have a legitimate place in the process. Also it would almost certainly be all but impossible to get rid of the lobbying machinery. However, I do contend that the harmful aspects of lobbying can be reduced.

One serious problem with lobbying and its associated influence (such as corporations and other interests literally writing legislation) is that the lobbying activities are not transparent and made readily available to the public. As might be imagined, if lobbying activities were made readily available to the public, then this would have some influence on the nature of lobbying. At the very least we would know the prices at which our government is being bought and sold.

To this end I would propose that all lobbying activities involving public officials be made a matter of public record. This would include emails, meetings, letters, phone conversations, texts and so on. With today’s technology, it would be a simple matter to record meetings on video, to record phone conversations and so on. This information would the be posted on a site called lobbyist.gov. The main page for the site would have a link to individual pages for each member of congress. Each individual page would have a list of all the lobbyists who have lobbied the congressperson as well as links to records of all the lobbying. It would be mandated that the site be designed to be clearly and easily navigable so that the records could not be obscured or hidden. There would also be a large money counter for each congressperson which would track the amount of monetary value received from lobbyists and the interests they represent.

It might be objected that lobbyists have a right to secrecy. The obvious reply is that lobbyists might, but public officials do not. They are, after all, public officials. Hence, the interaction between the lobbyists and the public officials in their professional capacity would thus seem to be something that the people have a right to know about.

It might also be objected that some matters might fall under areas of legitimate secrecy, such as national security. Thus, any lobbyist who can claim this would have the right to lobby in secret. The obvious reply is that while dealings between congresspeople and certain interests (such as defense contractors) might legitimately involve secrecy, this would clearly not cover lobbying attempts. After all, while a defense contractor describing a top secret weapon would be a legitimate matter for secrecy, the process of lobbying congress to spend billions in public money on that contractor would not be a legitimate matter of secrecy.

I imagine that lobbyists would, of course, try to stuff as much secret lobbying as they could under the cloak of national security. However, this would still limit the illegitimate secrecy in substantial ways and the lobbying report should still include a report of secret lobbying that lists the name of the company and the fact that the lobbying activities were made secret for “national security” or whatever.  This secrecy should also be subject to independent review to try to reduce (however slightly) the inevitable abuse of the national security loophole.

The requirement for transparent lobbying would need to be backed up with penalties that would be sufficient to motivate lobbyists and congresspeople to follow the laws. After all, if the penalty was an ethical censure or a small fine, most congresspeople would simple break the rules relentlessly. One reasonable penalty is that violation of the transparency rules would result in the interest being served by the lobbyist(s) in question being banned from lobbying for an extended period of time and that the offending congressperson would also not be allowed to interact with lobbyists for a set amount of time per violation.

As might be imagined, opposing this sort of transparency is something both parties can agree on.

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Recurring Themes

Posted in Business, Environment, Ethics, Law by Michael LaBossiere on May 26, 2010
BP Logo
Image via Wikipedia

Interestingly, the various disasters that have been dominating recent news are playing out like bad movie sequels. To be specific, each new disaster takes the dominant theme of the previous one and then seems to try to top it. In the case of Toyota, it was found that they were a bit too cozy with the folks who were supposed to be regulating them. In the case of the financial mess, it was once again found that the regulators and the “regulated” were very cozy. It was also found that some of the foxes guarding the other foxes (to keep them from the hen house) were viewing naked foxes online. In the latest disaster, the BP oil spill, the regulatory agency folks seem to have been cozy with the drilling companies and some were also apparently viewing porn. The new twist was that at least one regulator admits to using Meth. God only knows what will be next.

Since Obama is president now, he will be criticized for these regulatory failures. However, the problems with the regulators of drilling are prior to Obama (2000-2008). While it is tempting to put the blame on the Bush administration, this problem seems to be a systemic one that crosses party lines and administrations. After all, the Obama administration is rather cozy with Wall Street.

The main problem in these cases is that there is a lack of enforced regulation that keeps the people who are supposed to be regulating from getting too cozy with the people they are supposed to regulate. In short, there is a serious problem with corruption and undue influence. While some aspects of the problem can be addressed with revised regulations (and enforcement of existing laws), regulations are only as good as the people who enforce them (or fail to do so). This indicates the classic problem of how to get ethical and competent people into such positions and how to keep them from succumbing to corruption. It is, in short, the general problem of good government.

Some obvious fixes include outlawing gifts, having regular “inspections” of regulators to determine what they are doing (or not doing), and checking for conflicts of interest (such as close relations to the folks in the industry to be regulated). Other fixes including having stronger regulations that are harder to bypass or work around. After all, weak points in the laws make it easier for corruption to grab hold.  Of course, these weak points are not the fault of the regulators-they are created by politicians by accident or by design. In the case of designed weak points and loop holes, these serve to undermine good regulatory practices by building in ways for companies to get around regulations. Typically companies have to use their influence to take advantages of weak points, which is how corruption can get started.

So, good laws and good people are the fix. As always. Good luck with that.

As a final point, I want to discuss the drugs and the porn. My rough hypothesis is that the cozy relationships played a causal role. One possibility is that corruption breeds corruption. In other words, when a person has a moral weakness in one area, it makes it easier for other moral weakness to take hold. A second possibility is that one corruption did not contribute to another, but that both are the effects of bad character. A third possibility is that the cozy relation between industry and the regulators left the regulators with little real work to do.  As the saying goes, idle hands do the devil’s work (that is, clicking links to porn).

Interestingly enough, porn would probably be a useful indicator. To be specific, if a government employee has the time to view porn at work, then s/he is probably not doing his/her job properly. As such, checking for porn in the workplace would be a good idea (and not just for the usual reasons).


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Regulating Salt

Posted in Law, Medicine/Health, Politics by Michael LaBossiere on May 7, 2010
A salt mill for sea salt.

Image via Wikipedia

A proposal that the government regulate salt in foods is now being considered.  The main motivations are that attempts to curb excessive intake of salt have failed and that this excess consumption has had a serious impact on the health of Americans.

Salt is, of course, an essential part of the human diet. As such, we cannot do without it. However, excess salt (as noted above) is harmful. The main impact is that it helps elevate blood pressure and this contributes to a variety of health problems. The obvious challenge is finding a way to balance between what people need and what is actually harmful.

On one hand, it does make sense for the government to step in an regulate salt. After all, it presents a clear health risk and thus would seem to fall under the dominion of the state.  At the very least, consumers should be provided with information about the salt content in food (including that served in restaurants) so that they can make an informed choice. It also makes sense to reduce the salt content of food when possible so as to reduce the health risk to those who elect to simply eat without considering the health impact (that is, those who chose to eat in ignorance).

While some people are tossing out terms like “food police”, I am fine with there being food police. After all, I am somewhat familiar with the history of food in America and what sort of ingredients and contamination people were exposed to prior to the FDA.  Even with the FDA we still face problems (such as food poisoning)-so just imagine what it would be like without the state regulating matters.

Also, the proposal does not ban salt shakers. If it is decided that salt levels in foods will be reduced, you can still shake away to your heart’s content (and early demise). Finally, many companies already offer lower sodium products and they could expand these product lines.

On the other hand, the are some reasons to be against the regulation. Once point is that the problem with salt is not that salt itself is dangerous. Salt is not like lead or mercury. What causes the problem with salt is excessive consumption. As such, the government would not be protecting us from a dangerous substance, but attempting to do something about excess consumption. This, it might be argued, is not actually something the state has the right to do. To use an analogy, eating excess calories presents a health threat to people. However, the government does not seem to have the right to mandate that food contain less calories so as to address this problem. After all, calories are not bad, it is the excessive consumption that is bad.  It might thus be argued that  since people have the freedom to consume in excess, they should also have the freedom to consume excess salt as well. Of course, this argument could also be turned around to be used as an argument for government regulation of calories. Interestingly, arguments for not regulating salt based on the right of free choice could also be deployed to argue for not regulating drugs like marijuana and also for allowing people to chose to marry the same sex. Of course, folks tend to only want people to have the freedom to choose what they want them to choose.

Another relevant point is that this sort of regulation might be pointless. Even if the salt in food is reduced, then this might have little impact. After all, if the food is not salty enough for people’s taste, then they will probably just salt it (as people already do).  Or people will simply eat more until their craving for salt is satisfied. As such, regulating salt content might not be worth the cost of the regulation.

My considered view is that the salt in many foods is needlessly excessive and should be reduced, mainly to help reduce the harm people inflict on themselves in ignorance. After all, since too much salt is harmful and people seem unwilling or unable to voluntarily curb their salt intake, then the state should step in to protect them.

However, people should still have the choice to harm themselves if they really want excess salt. However, this should be a matter of informed choice and not the result of ignorant consumption. However, the excessively salty foods should probably have a slight tax on them that would be used to help offset the costs to Medicare/Medicaid  resulting from such excess salt consumption. After all, while people should have the free choice to harm themselves, the medical care to deal with their poor choices is not (yet) free.

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Free Markets

Posted in Business, Philosophy, Politics by Michael LaBossiere on August 14, 2009

Since at least the time of Adam Smith, people have been debating the matter of free markets. Grossly oversimplying matters, the idea is that if the folks who are involved in economic exchanges are left unregulated, the interplay of the “market forces” will result in an overall positive result. Competition, it is claimed, will lead to better and cheaper products and this means that via the power of the invisible hand, everyone will win.

Of course, the free market of this sort tends to not need to a better world for all. Rather, the result tends to be the creation of monopolies as the most ruthless, cunning, and lucky assimilate or destroy the competition. The stock example of this is, of course, the robber baron era of the United States. Folks also point to the fact that the United States economy was in a constant turmoil of surges and recessions during the halycon days of yore. Naturally, people also point to the deregulation of the 1990s and early 2000s as contributing factors to the ecomonic mess we are in these days.

Since at least the time of Marx, people have also been critical of the free market and have instead urged for a controlled market. The more extreme folks have even pushed for real socialism (state ownership of business and industry). These folks usually claim that this will be better for everyone by eliminating the evils of the free market.

Of course, when we look at many of the socialist and allegedly communist countries, we tend to see rather poor economies. While folks often point to Europe as an example of the success of socialism, these countries are not (despite the cries of the right) true socialist states.

The fact that totally free markets and totally controlled markets are recipes for disaster should hardly be surprising. After all, looking outside of economics reveals that total freedom and total control always seem to spell disaster.

For example, consider the matter of law. If there was no law  and no enforcement of law, we’d be in what thinkers like Hobbes and Locke called the state of nature. While Locke painted a pleasant picture of this state and Hobbes cast it as a nightmare, both men agreed that a state without laws would be undesirable. Empirical evidence also reveals that if we consider what occurs when law and authority fail. Somalia is, of course, one modern example.

On the opposite end of the spectrum, states that attempt to repress and oppress their citizens, create horrific states. North Korea is an excellent example of this.

Most folks need, as thinkers such as Aristotle and Hobbes have argued, to be kept in check by laws and punishments. This is because most people are not ruled by ethics or reason, but are ruled by desires.  To think that the economic realm is magically exempt from this is a delusion of extraordinary magnitude. This is especially true when you consider the obvious: people really like wealth and will often do awful things to get it. So, leaving people unregulated as they try to get rich is an alarmingly stupid idea.  As such, people need to be regulated in their economic activities as well.

That said, what makes life valuable is freedom.  Mill argues quite eloquently for this in his writings on the subject of liberty. Freedom is also important in allowing people to be their best.  As the free market folks and any athlete will tell you, competition does lead to improvement. Of course, as any athlete will tell you, the competition has to governed by rules. Being a runner, I think that the sports analogy is quite a good one.

In a race, everyone is free to compete to the limits of their abilities. This competition drives people to do their best. Likewise, economic freedom provides people with the motivation and operating room they need to excel. Races are, of course, governed by rules. You cannot kill other runners, use a car, make use of illegal drugs and so on. This keeps the race from degrading into something nasty. Likewise, economic activity needs to be governed to keep it from going from a progressive activity to a destructive nightmare.

As in general law, the challenge is to find that right balance: enough freedom so that people are not repressed, oppressed and unable to be their best. But, enough regulation so that people cannot get away with doing wick and destructive things. That ideal balance is crucial to having a healthy society and a healthy economy.

The World Economy

Posted in Business, Politics by Michael LaBossiere on April 3, 2009

As the world economy continues to flounder, the G20 conference is in full swing. The hope is, of course, that the world leaders will be able to save us from the mess they were unable to prevent.

Oversimplifying things a great deal, the two main strategies that are coming out of the meeting are 1) throw money at the problem and 2) increase regulation. On the side, the Chinese are making a play to weaken the role of the United States in the world economy. Part of this is their suggestion that the US Dollar no longer be used as the foundation of the global economy.

While American businesses are quite happy to have money thrown at them, they are less amenable to regulation. They are most especially against regulation that would allow agencies outside the United States to interfere with their operations.

As far as the money solution goes, the obvious flaw is that the money has to come from somewhere. While governments can keep taking out loans and value can be created by complex financial means, the magic trick can only work for so long. At some point a solid foundation must be found from which the world economies can recover, or not. After all, when you are falling, clouds will only slow you down so much (that is, not at all).

As far as regulation goes, the general idea is a good one. The economy wrecking problems stemmed in part from the fact that the folks minding the store were not, in fact, minding the store. Also, as people have pointed out, many of the economy wrecking antics were perfectly legal (not all, though). Thus, good regulations that are properly enforced would help avoid another such meltdown (when or if the economy recovers). Obviously, the United States is not going to accept outside regulation. While we (like other countries) are happy to meddle with others, we prefer that others not meddle with us.

Of course, given that the world economy is transnational, the idea of world regulations does make some sense. After all, most of the big players are multinational corporations and have used that to their advantage. Effective world wide regulation would help deal with some of the problems. Unfortunately, if such regulation were to be handled like the UN, then it would most likely be ineffective.

I suspect that no country would be willing to give other countries serious regulatory teeth in regards to its own business. As such, any international regulations would probably be fairly toothless.


Posted in Business, Ethics, Politics by Michael LaBossiere on September 24, 2008

As the economy spirals downward, people are looking for the cause. Not surprisingly, the Democrats and Republicans are blaming each other and they are both blaming the usual suspects: Washington, greed, the financial fat cats and so on. They both seem to be quite right.

While I am not an economist, the basic situation of the economy is on par with the general situation of society. I am qualified to comment on that, thanks to my background in political philosophy and political science.

Thinkers such as Aristotle, Hobbes and Plato have carefully considered what is needed to have a good society (and hence a good economy). For Aristotle and Plato, the key was to make people good. Aristotle was quite clear about what to do with people who did not become good-they would be compelled to act that way or forced into exile. Hobbes took what many regard as a more practical and realistic approach. He regarded humans as egoists looking out solely for their own good. Hence, people have to be compelled by force in order to behave in a way fit for society. Presumably the same applies to economic behavior as well. After all, if people are selfish and badly behaved in general, it would be odd if they were not so inclined when it came to economic matters.

The Republicans (to use the stereotype) seem to get Hobbes view when it comes to personal matters. They generally believe that individuals need to be compelled by the state when it comes to same sex marriage, abortion and drugs. They also seem to get his view when it comes to social order: they support harsh laws against certain crimes, capital punishment and the use of force against other nations. However, their reason seems to fail when it comes to the economy. While they see it as critical for the state to protect us from the devastating impact of same-sex marriage, the general view is that business should be left alone and this will work out great. This strikes me as odd. After all, if people need to be compelled by the state to behave well, then this should apply to business behavior as well.

Some people might point to the power of the invisible hand, an invention of Adam Smith. However, this wonderful invisible hand is invisible for the same reason that a unicorn is invisible-neither exist. The historical evidence is quite clear and hardly surprising: when people are not restricted by proper rules, they tend to try to get away with as much as they can. This also applies to business. Actually, it applies especially to business because the goal is to acquire wealth and this tends to lead to not-so-nice behavior even in the best of times.

I do wonder whether conservatives delude themselves about the magical invisible hand of business or whether they use it as a convenient excuse so they can try to get away with what they want to do. However, the logic is clear: if people need to be regulated by the state because otherwise they would act badly, then this applies to business behavior as well. Unless, of course, it can be shown that business is a special exception and that people act well and wisely without regulation. I think that the past problems and current disaster shows the truth about this matter.