The Most Dangerous Monopoly: When Caution Kills
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- Опубликовано: 18 сен 2024
- "The Most Dangerous Monopoly: When Caution Kills" by @LearnLiberty
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Everyone wants the items they buy to be safe to use or consume. Howard Baetjer of Towson University explains that when products undergo third-party certification processes to determine their safety, market forces are able to optimize the amount of testing conducted and consumers can use the information provided by certification firms to make their own decisions. It is difficult to say how much testing is enough: another test can always be run on a product, but at some point the benefit of the extra testing outweighs the costs. In a free-market system, competition among certification firms allows the market to work as it should and prevents both under- and over-testing of products. Conversely, when the government holds the monopoly on safety standards, products are likely to be over-tested, delaying their entry into the market and making them more expensive. Sometimes the costs of such delays cannot be quantified; lives can be lost while life-saving medicines are held up in safety-testing processes.
Check out Prof. Baetjer's book that inspired this video: www.freeourmark...
Animated by Tomasz Kaye: / tomaszkaye
► Learn More
www.amazon.com/... [resource]: Chapter 7, "Who Protects the Consumer?"
www.amazon.com/... [resource]: Howard Baetjer book, specifically Charpter 6 "Market Forces Regulate"
• "Is the FDA Safe and E... [video]: Alex Tabarrok lectures on the harm caused by the bad incentives for the FDA
fdareview.org/ [resource]: The Independent Institute questions whether the FDA is safe and effective with a body of research that dives in to the history of the FDA
Some resources to back up particular claims:
www.ul.com/glob... [source]: UL website - About Underwriters' Laboratories
www.ul.com/glob... [source]: UL offers a page of "Additional Resources" that lists other institutions that provide certification or establish safety standards:
www.cato.org/pu... [analysis]: Noel Campbell's Cato policy review -"Replace FDA Regulation Of Medical Devices With Third-Party Certification"
► For more resources, transcripts, videos, and more visit:
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"Each buyer decides for him or herself." God, I want to cry over this whole channel. It just makes so much sense and I crave for a free, civilized society like this so badly.
WIthout getting too political here, but this is why we vote Trump. He is deregulating companies (not for harm) allowing them to compete properly again, and want to remove many of the bloated government agencies that is doing more harm than good.
People like Bernie Sanders want more government control.
The amount of our lives that is ruled through coercion is the exact amount we have failed to have a civilized society.
Genetic testing company 23andMe was ordered by the FDA to stop selling at-home kits. One writer put it, "The FDA bureaucrats think that they know better than you how to handle your genetic information." In this week's NEW video, Prof. Howard Baetjer says that the free market can certify equal safety standards faster than regulatory regimes.
***** There was a patent case on the ownership of genomes that a private company tried to claim. The Supreme Court ruled that the human genome could not be patented (because it occurs naturally and is not an invention or development of human ingenuity). One reason I like government regulation of some things!
tanukibrahma . patents are a government granted monopoly. And it is a violation of private property as it tells you what you can or can not do with your own property.
As an individual, you are-more or less-an expression of your genetic constitution on reality.
Since this video was made, I suspect the public/private row over this matter has progressed as I hear of many people using 23andme, for whatever reason. I like to use the excuse of mere curiosity and genealogical rationale.
Also hot on the market is genuine Russian Air Force genetic material by U.S. Govt agencies.
Personally, I'd like the question of who will be the Moorlocks settled sooner than later too, whether it's through the private sector or public. We could just take the racial superiority shortcut either way.
At what point does the,"because I'm my own dog!" individualistic rationale not meet with reality? Shouldn't we know better by now?
It might make sense to prevent private interests from selling the DNA data or even simple bio-marker information on the open market where it might be bought by unscrupulous parties.
There is one mistake in this great video. The delays and over-cautiousness of govt agencies caused by lower than private firms efficiency, not by their greater accountability. They are much less accountable. When VW's scandal published, it lost billions instantly on their share value. But when EU's diesel regulations turned out to be false after almost 20 years, none of the bureaucrat is accountable. And even if we find such, it's unlikely that anyone will lose even a monthly bonus.
Is the FDA standing in the way of medical marijuana? Scientists agree about its safety and use, but it's still not an option for most Americans. Maybe you'll agree with Prof. Howard Baetjer: the free market gets safe products on store shelves faster than the government.
***** for real, government is the most dangerous monopoly. If the free market can do a better job at building cars than government, why can't it do a better job at producing law
***** Well your a capitalist atheist, so much bullshit in one sentence.
Just smoke cayenne pepper. It has all the benefits of marijuana.
they attempted to stop "female viagra" and each time they found it was unsafe, when a large group of feminists forced the government to allow it people found it was unsafe...
+Learn Liberty your argument here isn't exclusive to government. Your argument concerns corruption and not listening to scientists. Yes, medical marijuana should be legalised and be able to be prescribed and used by doctors, etc. But the reason it is not is not because of government intrinsically, but because of corrupt politicians having ulterior motives and politicians not listening to scientists.
Great vid. Right now I can think on two kinds of private certification. ISO Certification, broadly used in several countries. And Microsoft certification (MCP,MCSA,MCSE,MVP... etc)...If you hire a company with ISO certifications you know that you are getting reliable services. And if you hire someone with MCSA certification you know the guy is good in what he does... So, what the matter guys? Why are you so afraid of freedom?
One effect barely mentioned in this video is what socialism applied to safety does to the vigilance of the consumer. Socialism applied to safety -the FDA for example--inures the consumer to be vigilant. When vigilance is relaxed bad things can be consumed if there is even the slightest bit of freedom left in the market place for providers. That is the case when people wrongly assume that the government is making it impossible to have bad things out there. We don't look for the UL label because even that simple responsibility has been taken from us.
Wonderful point. People don't often consider the psychological and social effects of dependency on government.
This is part of the 'crowding out' effect. If government does something, even if it doesn't prohibit the private sector from doing it, it is still limiting the ability of the private sector to do the best possible job. Like public schools crowding out private schools, and reducing consumer demand for high quality education, because people expect the government to provide it.
This is the best LearnLiberty video I've seen in a while.
Fascinating stuff. I'd never thought about the FDA and others this way. Thanks, y'all
What about discoveries of dangerous substances 10 years after some medicine was already approved? FDA make discoveries all the time, could private versions of it do it? Who would pay for it?
@@goranmilic442 consumers demand assurance that their product is safe & reliable. The business that offers such assurance wins over competition. There's private certification. Their entire business model is built on trust & transparency. They assure this through contracts. Some even implement democratic elements to enshrine this further.
Under this system you have competing gatekeepers. They're incentivized to maximize safety, while also not being overly cautious.
The fda is funded through theft. They have no incentive to improve.
Hey Guys,
This is how it works for financial products with companies like Standard and Poors, moodys etc rating financial products, but they do a shocking job.
Despite having made massive mistakes several times they continue to be popular and used by governments and businesses alike.
What are your thoughts on this?
Cheers,
Ben
This is a good point - the difference I think is that these rating agencies are business to business rather than consumer facing. Those businesses have another layer of check on them, i.e. investors. Unfortunately the only check on government is ill-informed voters with little direct skin in the game like investors. Therefore in general we should try to minimize the role of government as much as possible. I think we can all agree government rating financial products would be even worse than the private ratings agencies
@@jameslee5237 this isn't a good point at all considering that standards and Poor's famously rated mortgage backed bonds AAA when they were 98% garbage bonds
@@fb079 My point stands. Government would be even worse
@@jameslee5237 I mean if you ignore all the evidence of how rating agency's failed and contributed to the 2008 financial crisis and how a private drug rating agency would also do the same to medicines then I guess you're right. 🤷🏻♂️
@@fb079 The ratings agencies in this case were government-backed and excluded competitors. Not a free market.
The problem about all of this is that many times customers are too stupid to make good choices about what they buy. However, I'd much rather get the freedom to be fat or to take risks, that's what makes life worth living.
This is one of your best videos in a while.
Also one more thing, if they speed through testing and/or don't have enough tests, and a product lets say kills 3 people, the product that killed 3 people with that private company's safety approval on it. This will obviously cause the company to more than likely go out of business, or, if not, change they're style so they almost 100% make sure what they approve is safe.
Lmfao oh boy do I have some bad news for you. Americans products kill hundreds of people annually yet those firms do go out business
If I am not mistaken, this is exactly how the 2008 financial meltdown happened. All of the rating agencies (Standard & Poors, Moody, etc) were grading the mortaged backed securities AAA. Here is the kicker...if Moody's rated it only AA then the banks would have went to the competition and got AAA. So they all rated junk AAA or lose money to the comp. The same thing is happening with THC "testers" in California. Lets say there are 2 testers and tester 1 says 20%THC. Tester 2 actually tests the sample and the product is truly 15%. Who do you think the cannabis grower is going to go to in the future? This is a bit more complex when unscroupolis and greedy people see profits over safety and collapsing the economy for short term profits. Though I was all for letting the whole thing collapse, but the government bailed out the risktakers and profit makers. That also is where the system was wrong. There was no consequenses, there was bank bailouts and bonuses.
Chew on this: The United States enjoys the best airline safety rating in the entire world. Why is this? Government mandated regulation. Regulations in manufacturing processes, regulations in crew training, airspace regulations, radio phraseology, Air Traffic Control procedures, and on and on and on. We were not always this way. We, as a nation, had to suffer through many horrific airliner accidents before we got to the place we are today. All of this regulation is not with out a price. That price is ticket prices. Question is: If government tossed aside all these regs and allowed Boeing to build planes as they see fit and allowed airlines to hire and train as they see fit would YOU still fly? Would we still have the best safety rating?
Saying that without mandatory government inspections planes would fall is equivalent to saying Boing doesn't care if his plane would fall, air companies don't care about the money they lose in a crash, and passengers don't care if they die.
ekklesiast There are countless examples of companies selling a product/service that was substandard, even harmful, where people were harmed it's use. Your assumption that business will act in the best interest of the consumer is false.
ekklesiast Yup mike is just spouting the same tired old authoritarian pro Statism propaganda that without coercion, violence, mass murder and perpetual war by their tin god the state, the Earth itself would stop spinning and the sun would not rise in the morning.
mikeallenbrown1 My assumption is that contradicting business interests and consumer interests is a silly false dichotomy. In a free market a company can't afford to build a falling plane, because customer satisfaction (i.e. safety) is the source of its profits. Government agencies only are funded irregardless of customer satisfactions.
Speaking of your examples, it's easy to show that substandard products is always a result of limited competition caused by a government regulations.
ekklesiast Authoritarians like Mike cannot comprehend that. To them the sun will not rise in the morning without their god the state.
I am so glad your channel exists!
I love these videos. I've been learning a lot about Economics and how markets work. One question I have though is, don't these arguments assume a certain condition of a free market? That is, are we not assuming that a free market will have robust competition. What happens if, however, competitors go out of business and a single rating agency remains? Wouldn't that be just as bad as the gov't monopoly? Wouldn't that private monopoly be susceptible to corruption, bribery, etc.? Wouldn't it take time for the market to adjust and for a new competitor to emerge? And what would happen to the consumers in the meantime. Would they not be at the mercy of that sole rating agency in the interim? I love these video, and I agree with a lot of what is being suggested, but it seems to me they take a bit overly simplified view of reality. Some level of gov't oversight does seem prudent given the above concerns.
Public agencies are subject to bribery as well. They're also funded through theft & have no incentive/capacity to really improve. Contractual agreements assure trustworthiness over time. All it takes is one offer such assurance & they capture the entire market cap.
Monopoly is not a big threat, especially in the certification field.
When we had a almost perfect free market in the late 1800s (the industrial revolution) there was no monopolies in any negative sense of the term. Rockefeller, for example, only dropped prices *(by 90%)*, contributed massive innovation to the oil industry.
Free market monopolies are a myth.
I highly recommend the book 'the myth of the robber barrons' for a great explanation on this.
Welcome to reality. On paper the free market system works but in reality it fails. If you look at credit rating agencys there's only two and they were party responsible for the 2008 financial crash. They certified junk bonds as AAA. There's no fail safe mechanism for private certifiers to pass unsafe medicine as safe they'll be virtually zero competition
.
@fahadbaig0777 they only bought junk bonds because of fannie & freddie (a fed/govt sponsored organization) bought them at artificially higher prices. They created artificial demand for junk assets, under the direction & support of the state.
1) The rating agencies have an incentive to stay in business (from Learn Liberty)
2) Not all people act with perfect morals all the time.
3) Thought experiment: Knowing this, a CEO from another business can implement the following strategy: Put indirect economic pressure on a particular rating agency until such agency is risking bankruptcy. Then, at the proper moment, the CEO can now step in and rescue the agency with a loan (with a nondisclosure agreement so the agency's reputation will never be at risk), but if and only if the agency provides a great rating for a new product.
4) Because the rating agency has an incentive to stay in business, it is entirely possible for said agency to act as a rational economic player and accept the previous agreement as stated above.
5) Over time, the relationship between businesses and rating agencies could become morally compromised by a multitude of this and other scenarios as well given that not all people act with perfect morals all the time.
So, there seems to be a dilemma, I'll call it the Libertarian Dilemma: Given that not all people could possibly act perfectly moral at all times, and given that libertarian solutions is to remove governmental regulations all together, what entity would then protect the people from those that wield power if they choose to abuse it at will? Or put in another way: Does a sustaining libertarian form of government require that all citizens always act with high morals all the time (since immoral behavior can destroy trust and confidence among the citizens) ?
Just that this doesn't happen. VW sales went down by 0.5% in october after the scandal... Why october when it became public in september? Well September goes up actually...
dailykanban.com/eu-new-vehicle-registrations-2015/eu-passenger-vehicle-registrations-september-2015/
dailykanban.com/eu-new-vehicle-registrations-2015/eu-passenger-vehicle-registrations-october-2015/
And likewise the share has almost recovered already. People don't care. And that is why you need the government to do this.
People bribe government officials all of the time. They may not have a direct incentive to make money, but government regulators can become compromised as well. There are many drugs that have been blocked by the FDA for seemingly no reason. There are also drugs that have been approved but were later found to be harmful. Regulating agencies would have to look after their reputations. If one regulator gets a bad reputation than the companies making the products will stop going to the agency. Why, because if they don't consumers will lose trust in them overtime. I'm not arguing for all or nothing however, I think governments should still enforce recalls and basic safety standards.
"Put indirect economic pressure on a particular rating agency until such agency is risking bankruptcy." - This can be done only through state and legislation. Learn some economics for gods sake.
The main problem with FDA is not its low efficiency, but its Monopoly-by-law. Let FDA be for those who trust government more than free market. Let it even (try to) be Monopoly. But it must not be Monopoly-by-law that outlaws competition. That's it. Solved. It's clear even from the comments here that many don't understand the mechanics of market, so they don't understand how the free market solves complex problems, so they want an all-powerful Nanny - the government. It would be even better if they pay themselves for their nanny. These two approaches are not morally equivalent. One allows all to coexist according to their views, another is a totalitarianism and coercion. It's the same fallacy that make people think that USA and USSR were morally equivalent competitors. In USSR people were executed for an attempt to leave it. Like in any other commie regime in history -- what a surprise...
I think this video is making a lot of huge assumptions.
For example, do they honestly expect the average consumer to keep track of which certifier is the most reliable? You are a consumer. Ask yourself, how often do you pay attention to certfier labels? How much do you even know about them? I know I don't.
And how can they expect consumers to even be informed enough to know which product is right for them? There are people who don't even know the difference between ibuprofen (Moltrin) and acetaminophen (Tylenol). In a Free Market system, those with low income or those who are just not aware would go for less expensive goods that may have failed safety tests, but since lacking a certification wouldn't automatically result in a restriction like in the Government system, these goods would still be available. That's too much of a gamble for some people if you ask me.
The video also makes it seem like the government _hardly ever_ tests products efficiently, which I have a hard time believing. Even if this is the case, which would you prefer: thorough yet excessive testing to make sure a product is safe, or swift yet insufficient testing aimed at quickly releasing a product to save money?
They also assume that self-interest would be enough to motivate private certifiers to effectively and efficiently test products. _However_, who's to say private parties don't outperform and buy out competitors? Or manufacturers don't pay certifiers incentives to influence them to rush and approve products?
At the end of the day, a private party is a business that is trying to make money, and they WILL try to find the path of least resistance in getting that money, which almost always leads to mistakes.
There's no easy solution to all the problems, and the Government is not perfect, but I think runaway capitalism would be a much worse alternative.
If you have a hard time believing that the government hardly ever does anything efficiently, you're either really naive or really stupid.
Seeing the vape industry boom out of almost nothing in four years was a good example of industry growth in a free market scenario. While i never personally got into vaping, i could tell that the freedom of the companies from government regulation allowed it to become a shockingly huge success for any small business owner who wanted to complete in the industry. Vape shops were filling old plaza shops that nobody had inhabited for years in my hometown, and actually brought business. Ever since the FDA wanted to charge ludicrous government testing fees, these shops have been slowly disappearing again. Meanwhile, large scale tobacco companies that can afford the testing, like Marlboro,are pushing there own vape brands in convenience stores ever since. The FDA creates monopolies with its regulations by allowing lobbying to control their regulations, not fight them.
'Immorality Kills -how the FDA/government monopoly on violence kills millions' could be the title.
What about discoveries of dangerous substances 10 years after some medicine was already approved? FDA make discoveries all the time, could private versions of it do it? Who would pay for it?
@@goranmilic442 -Would it be correct to state your three questions as: 'who will pay to continue to monitor the dangers of a medicine once an approval agency has given it its green light'?
I want such safety monitoring. You want it. Other people want it also. We all would prefer to purchase medicines that undergo such evaluation -and our insurance companies, doctors, and pharmacies, also share this concern for us.
There are so many people interested in such post-launch safety analyses that there is no sense in, or moral justification to, imposing a coercively-funded political monopoly to try to obtain it.
@@kourakis Number of people interested (size of market) is irrelevant, as you could say the same thing about moral justification if there is little people interested. I'm interested to know what would system without FDA look like, regarding safety monitoring.
@@goranmilic442 -Good point, Goran; you are correct, the number of interested people is indeed irrelevant. I stand corrected.
The short answer to your question is: We don't know, and it doesn't matter. That people before abolition did not know how crops would be harvested without forced labour was irrelevant to the moral obligation to abolish it. Slavery is immoral, a violation of the non-aggression principle, and should not be practiced irrespective the consequences of its absence.
A longer answer to your question is: Although we don't know exactly what drug-safety monitoring system people will invent and use, we do know that people value such monitoring. In freedom, people will start companies that compete to best perform the evaluations that the FDA now does, and probably much more also. A difference will be that the FDA's single coercively-funded political monopoly viewpoint imposed under threat of force will be displaced by multiple companies earning their existence by competing to provide consumers and their interested parties with the best information upon which to base their voluntary choices.
I as a consumer really don't want to spend time and effort researching and remembering which certification companies are trustworthy, especially with drugs. Also its far to easy to mislead people by putting a simple tick on packaging to make it look like its certified. Companies already do this as it's been proven to be an effective sales tactic!
Sure if you want to be a sheep and just watch TV while taking your life saving drugs without doing any sort of background research as to benefits vs risks
Learn Liberty is the best!!!!
So, in theory that makes sense, in practise, I would never do private testing with such crucial things like medicine. Because what's forgotten here is that the company who want to sell a product with a logo has to pay the testing organisation to give them their certification. In other word, it buys the certification. So in the end, the testing company have a bigger incentive to make the producer happy (because he gives the money) rather than the buyer who buys the certified product. One would argue that such a testing company will run out of business because of a damaged reputation and will be replaced with other testing companys. But the incentive, to put the money giving company over the buyer will be the same. And you need lots of money and resources to even build up such a testing company, so it's pretty likely that there will be just a few such companies, in the worst case just two or three and they will be happy with not interfering into each others business plan to gain capital, even though that doesn't benefit society. Such crucial things need a neutral testing agency that can help consumers to make a good decision, and not have to worry how to make the money.
Well, I sort of disagree and sort of agree. While I hate the idea of banning products entirely, I'm not sure if it really makes sense for companies to decide which information goes on their products and which information doesn't. I think a private certification firm is great for ensuring products are safe, but who would assure products are honest, and that bag of fat free cookies are really fat free? I don't think a Free Market can exist without a freedom of information, and that requires regulation by some body, be it private or public.
Companies have an incentive to be open and honest because consumers as well as other businesses want to voluntarily pay money to a company that IS open and honest.
Do you think many companies would last that would deliberately lie/hold back truth to their consumers?
theDoubleA1245 Not unless they want to be taken over by companies that WILL tell the truth.
theDoubleA1245
Would companies lie? What world do you live in?
Without government I would just slap fake UL stickers on all my crap.
sd4dfg2
And once people figure it out people will be mad, stores will take it off the shelves to avoid getting in trouble themselves, your product and company will be tarnished forever, and you'll face several lawsuits and be an example to many other companies who want to do the same.
Great job on the video, Tomasz!
I'd like to see a good explanation of why the financial ratings agencies failed so miserably preceding the housing bubble. Why did their competition with each other not entice them to give more accurate analyses? More importantly, how is it that when they did make bad analyses that nobody else entered the market to challenge their findings?
Government also forced banks to give out loans to people who could not possibly pay them back.
A government sponsored & funded institution, fannie & freddie, bought those terrible MBS. They got the bubble going, & the cheap credit brought about by the fed allowed it to grow futher.
The failure of the rating agencies to provide accurate evaluations of the mortgage bundles that helped cause the recession contradicts the claims in this video. Also, what do we do for the people harmed by a company that fails to do its job. Sure the company will fold but that still leaves a group of injured parties. Greed and the search for shortcuts will inevitably lead to harmful decisions. Government regulation is not perfect but unbridled capitalism is so much worse. Not that it matters since our regulatory agencies have been corrupted and defunded.
Private companies will rate our products for us. Ah, I see. So like when Moodys or Standard & Poors get paid to give AAA ratings to collateralised debt obligations etc?
Because that worked so well.
Citing the most regulated industry in history isn't a good start.
How well do credit rating agencies like Equifax work?
This doesn't mention the other dangerous part is when government regulators hire people from specific companies that make regulations that benefit them and hurt their competitors. Like FDA prohibiting vitamin companies from advertising known benefits from taking them without millions of dollars of testing to "prove" it. Or like Monsanto keeping products prohibited by judges from use for years to make more money. My roommate said as a kid they used to run behind the truck spraying the insecticide gas in the 1950s.
Very generious amount of good credit presented for the FDA in this presentation.
Even if they take a long time to approve, what they do approve often ends up as lawsuits against pharmaceuticals. I have never noticed a lawyer presentating a commercial of a lawsuit against both the FDA and responsible pharmaceutical company, though.
I agree in the private companies doing this work, though. I believe less dangerous and more effective drugs will be on the market because the pharmaceuticals will have a much higher accountability.
Oh yes we should definitely trust private agency's to tell us wether our products are good, I mean that's what we did before 2008 to tell us wether financial products such as CDO's were good, and that worked out perfectly well (not, read up on your information these agency's get paid off by the people wanting to bring there product to the market, do that they approve there product, and in the end the agency's get off and continue working by saying its just there oppinion)
"Customers that see the logo know that the product has passed rigorous safety tests."
That is false.
Manufacturers with more money can bribe the certification company to get the logo without passing the safety tests - making the most prominent products less safe.
The market does not help make products safer.
Agree. 2008 Financial Crisis is one of the example how the rating agency was bribed by the financial investment bank to make AAA for the CCC securities in exchange for money.
Their incentive to get money not a reputation.
This has become painfully relevant in the last couple of years.
We need more of your videos, keep them coming.
The fact that things like this need explanations makes me feel depressed. It's like explaining to a kid why having a monarch ruling the country is a bad thing. We will not see a free market in next 100 years at least.
*****...says the one bombarded with propaganda and anti-rationality. You believe the free-marketists don't control most if not all the media? Amusing.
ekklesiast strange how capitalism actually creates dictatorships and you still support it. How?
having a monarchy is preferable to democracy you lolbert
If government monopoly certifiers really have a strong incentive to be overcautious and do extra, perhaps unnecessary testing, can someone tell me why the FAA certified the Boeing Max planes with such obvious flaws. Maybe this is theory, but in practice I think the government certification agencies not only fail to certify useful products but also do certify dangerous products more easily!!!
The need to stay in business certainly pushes firms to seek more efficient ways of testing, but it is the profit incentive that makes business people think and think about themselves above all, but safety certificate, when it is made a product for sale, will be subject to market forces and if its price is high enough, the seller might just be willing to sell it for profit, rather than for the safety of the general public.
"the seller might just be willing to sell it for profit, rather than for the safety of the general public."
By doing so he'd be risking the reputation of the firm, and with it, the prospects for long term profit.
bitbutter it could be too late by the time those defected products get spread around the market. And even then, it would only cause another round of debate about which way is the best way with no definite conclusions. A boss might just take his chance to make an once-in-a-life time profit with an once in a life time opportunity. On the contrary, people working for government agencies tend to rely on a constant stream of stable incomes and cannot afford to lose his job at any stage of his career. Although bribery may take place, it is just so much more likely that it could happen in the private sector..
Eddie liang "it could be too late by the time those defected products get spread around the market"
No, it would not be too late for awareness of these defective products to permanently harm the reputation of the certifying agency that approved them. Which would harm that firm's long-term prospects for profit.
Eddie liang " Although bribery may take place, it is just so much more likely that it could happen in the private sector"
You have it back to front, here's why: A monopolistic agency (ie. the government) has no incentive to demonstrate to its 'customers' that it's acting fairly, and that it's not corrupt (since its customers can't turn to another certifier). By contrast a competitive private agency has a much stronger incentive to demonstrate it's integrity to its customers, since those firms who do so will be perceived as more trustworthy, and will be preferred above their competition for that reason.
bitbutter I just still think that government is really the only real agency that has the resource to do it well and can do it really for the well-being of the community.
Yeah I thought the free market system for quality control was great too. Then the three major private credit rating agencies(S&P, Moody's, and Fitch Group) gave triple A ratings to the investments that led to the great recession. Turns out when the manufacturer pays the rating agency, the agencies has a huge incentive to give top payers good ratings. Otherwise the manufacturer will go to another agency. When the pay is high enough, private safety regulators will always disregard their reputations.
If you have something to debunk this argument I'll gladly hear it. I was a passionate free market supporter until 2008.
Finally someone with a brain.
That is an interesting idea about limited liability, although i doubt this country would see near the amount of economic growth without it (despite its frequent abuse by corperations ).
how are the rating agencies controlled by the state? Collecting corperate taxes doesnt mean the gov controls all corperations.
Private approvers face more competition, can sign contractual agreements, implement democratic elements to enshrine trustworthiness, & are just as trustworthy as public licensing. Except they don't gatekeep. It's entirely voluntary. Consumers demand assurance that the product/service their purchasing is what they think it is. The supplier that offers such assurance wins over the competition
Wonderful exposition, but the major problem with this video is that it doesn't cover regulatory capture and that the regulatory agency gets seized by the industry it regulates, and puts dangerous products on the market labeled as safe with essentially no oversight.
+Greg Bledsoe You're very right, the video doesn't cover such things. There is an answer, however, and it comes down to this: If your competition were selling their regulation checks to your competitors, do you have an incentive to expose it? Additionally, does this somehow not apply to regulatory capture of a monopoly by government?
@@NativeNewMexican What about discoveries of dangerous substances 10 years after some medicine was already approved? FDA make discoveries all the time, could private versions of it do it? Who would pay for it?
@@goranmilic442 The unfortunate reality is that we have to make our best prognoses for the situation given the best data we have at the time. There is a cost associated with being too eager to "pass" something without scrutiny, which is the obvious. We can all see the dead or harmed as a result of this. One only need look at the aftermath of Thalidomide in the USA to see how it can play out. What is imperative, however, is that we acknowledge that there is also a cost associated with being too risk averse to "pass" something for fear that it will cause those harms. Your comment, as correct as it is, illustrates this oversight.
The FDA, due to it's organizational structure, monopoly status, being subject to massive public outcry if things go wrong, and other factors, will err on the "risk averse" side DRASTICALLY. This has occurred to the point where easily a MILLION people in the USA died that could have been alive if it hadn't been for this poor risk assessment. The only way these risks can truly be evaluated is by the patient together with their health care advisers, advocates and by using the best possible data. That requires that the government GET OUT of the process. On top of that, the data would increase in quality. Ever hear the phrase, "Good enough for government work?" It's a truism.
The "how" and the "who" of the market varies based on the circumstances. If I asked you, back in the era of feudalism, "if the peasants don't have the lords keeping things the way they are, how would we make sure people have food? If they don't do it, surely we'd starve. How would free people decide what crops to harvest? Who would distribute them?" you couldn't possibly imagine that you'd have a fleet of trucks, ships, airplanes, and trains to move produce and other consumables around the world.
The market will determine if they need small, local producers and local trust relationships. The market will determine if it's more effective to have a worldwide verification system like Underwriter's Laboratories or Consumer Reports or Yelp provided "risk assessment aggregations" or some other thing.
Who would pay? In a free market, prices go down, quality goes up. This is a historical fact. The "who will pay" is in essence a non-issue.
Could it be that research is funded by patreon or gofundme style systems or something else? Sure
Could it be that research is funded by uber rich people trying to stave off the loss of a loved one who then donates the results of their research as a philanthropist? Sure
There's a LOT of answers for these questions, but the answer that never changes is "Whatever answer we end up with, it will ALWAYS be better than the government doing it."
@@NativeNewMexican You convinced me about importance of optimal balance between speed and accuracy. But my question is still unanswered - what is incentive for somebody in free market to do such continued research? I guess somebody willing to do it can find funding. But why ask people if you can enforce it (by government taxation and financing)? Reason I ask this is it's in all of our interest that such researches exist, but we're not all willing to pay it, maybe because we don't understand the problem enough.
Also, private researchers would only be interested in those food and medicine that they have reasonable doubt about, while FDA makes (or should make) such research all the time.
@@goranmilic442 This is, again, one of the "seen" vs. "unseen" situations. We can see "solutions" using today's methods which are, in fact, hindrances. We can't see solutions which have not been created yet as solutions and since we don't "know" what these solutions are and we have to imagine them, our imagination forces us to compare these solutions with the "perfect" or a "rose colored" version of what we have now.
There wasn't any "reason" to create a smart phone. We had computers that were getting better all the time, we had all sorts of new concepts for video conferencing screens connecting with telephone systems. We had science fiction writers filling our imaginations with crazy inventions we would see. Many of these ideas were tried, a vast majority of them failed, but each one was tried.
Why?
In truth, whatever you have been told about the "find a demand and supply the solution" ideas of capitalism died about 100 years ago. Once people started to die of disease that they couldn't name instead of dying of starvation or thirst or exposure, capitalism wasn't even really possible. You can't negotiate for your children's future when you've got a life expectancy of 32 and 5 out of your 8 kids will die within the first 5 years and all of them have to work and scrape and so on.
Once we hit a certain point in productivity, ending our squalor, and subsequently goals change, we are able to feed, clothe, save others.
"Money" isn't the only "profit" to be had. That being said, free markets produce non-profit organizations, philanthropic ventures, and most importantly for you, "Friendly societies."
Look into the history of how friendly societies worked. A good resource is mises.org.
So, I guess the point I'm making is three fold and I'm sorry if didn't explain them well:
1. The government sucks, anything's better. Seriously, SANCTIONED monopolies always produce the worst solutions. EARNED monopolies produce the best ones and the free market is always looking to crown a better "monopolist" which was never more than a bogey man that governments convinced you that they had to prevent coming into being.
2. Stop being pessimistic about alternatives, history shows that free markets do better than almost all predictors
3. Incentives aren't what you think they are, stop placing your "personal values" on other people's motives.
The problem with the FDA is that, regarding drugs, it's mandate is not to ensure safety; it's mandate is to ensure effectiveness. If a drug can't be "proven" effective for whatever it purports to do, then it won't pass. What they should be doing, is testing drugs for safe dosages. That way doctors can prescribe drugs by efficacy as proven by the market.
The problem with the FDA is that it's mandate is to decide which drugs are to be produced and sold. The reasons they have are secondary. They claim that all they do is to "protect" the customers of the country; but in many instances all they do is legislate in favor of corporations to make some money.
So, drugs get approved based on many other reasons, and not just effectiveness of the substance nor safety for the public.
Bullshit. Private certification companies work for and were made by the corporations that receive certification. It's a racket.
The same thing could be said for the fda they are in bed with big pharma companies to stop generic drug manufacturers for even stepping in the market
Lovely and simplistic. I used to eat this kind of stuff for breakfast - but then I grew up. I came to realize that the world, and the market, is far more complex than libertarian theory describes.
Ah, to be a college freshman again.
This is what the world needs. Less caution.
Is about responsibility.
If you knowingly sell someone a harmful product, you should be responsible for it.
If you buy and consume a not-certified, not-trusting, not-know-where-it-comes-from, not-know-where-is-made-of product, you should be responsible for it.
There is no such thing as a risk-free world. Whatever you put into your body, is YOUR responsibility.
This feels so incredibly shady ... I’d really like to know who funded this video. Private companies reviewing themselves never end up well ....
I invite you to point out what is it that feels shady. The truthfulness of the content of this video will not change, regardless of who funded it. Imagine that Hitler funds a video that says "2+2=4", will the truthfulness of the video change based on the fact that Hitler funded it? Does that mean that 2+2 is not 4 anymore?
However it was funded, it was funded voluntarily.
What about when the government agency goes the opposite route: when they are given incentive to push a product through more quickly because of lobbying by big pharma? And, they put strange bans on things like cherries as medicine, which doesn't make sense. Why gag the food industry? Why allow dangerous drugs in the market?
In practice this would not work because the primary objective for private companies is profit not safety. Eventually the companies would start cutting corners and/or increasing the price of medicine. Also the video portrays this market as being very adaptable (as one company fails another will replace it) but in reality as one company fails the money would just flow to the bigger company. Who is going to trust the safety of drugs with a new, unproven company?? It will end with just one safety regulator, privately owned and driven by profit, unaffected by setbacks (like Microsoft, RUclips are at the moment). Normally, I'm quite liberal but this is a terrible idea!!!
Why would it not work? if there are competitions of private companies, likely in the long term they will compete for the efficiency of their products.
if one company falls then another unknown small company will rise to compete to that bigger company because competition is innovation.
dman john I highly doubt an unknown company would rise to the top for as the video states (1:02) one of the main reasons we buy the product is because of the brand, from this we know it has gone through rigorous safety procedures. This would make it almost important for a unknown small company to rise up because the public would not know it, all that would happen is if a big company failed the money would go sideways to a bigger or equally well known company because the public know it. This would therefore make the medicines be assessed by one privately owned firm.
Also the innovations would be in the name of profit and money not the safety of the products and i don't want to gamble the safety of my health because of an "innovative" get rich quick scheme.
Also these companies would be very susceptible to being sued for passing unsafe drugs. Now either this would mean the companies would lay on the side of caution and go through very extensive tests before passing it, like the current government does. Or it would feel it can afford to take the hit and consistently pass unsafe drugs because the liable charges would not be crippling enough and companies find it more beneficial to pass an unsafe drug and pay liable costs rather than not pass it or go through more extensive tests. Either way it's worst or just as good as the current system.
sorry it's long, had alot to say :L
What if instead the government acted only to guarantee truth in advertisement but not to block the sale of a product? If someone has access to all relevant information and either decides not to use the information or decides to go ahead and use a product that tests show is unsafe in spite of the information then that's their own fault. I think we should do that, and all food and drug companies should be required to place full information on a website, including what goes into production and information on any tests related to the safety of the products.
Then we could have private certification agencies as well in order to provide a more summarized indication of safety, but the individual if they were so inclined could do investigation themselves. Non-profit public interest groups could also do investigations using the information.
To protect children who can not give informed consent we could have laws imposing age limits on certain products.
EDIT: Another point. If anything is going to change you'll have to get people's attention. Maybe if someone was being prosecuted for selling an unapproved drug, but which saved people's lives because the government was too slow to approve it. That would make the public mad. People don't like to see people going to jail for saving lives. People would demand change if that happened. Although I imagine prosecutors likely turn the other cheek in cases where the treatment works, just because they are afraid of the negative publicity, which could explain why we don't hear about those sorts of cases in the media.
This can work, it's doesn't require government to implement. In fact, Government cant even do anything about it.
If you don't think this approach works think about it next time to buy dog food or go to the vet.
The former approach does not work as well for two reasons. 1 Government is a place that a society puts the problems it doesn't want to solve. If society is ignorant on a matter, it cannot asses how well the governments is solving it. 2 One can not expect to have control over a free service, take it or leave it, if you can. The moment you pay for something then the vendor is your servant.
But what if all the rating agencies are trusted or they're all doing it? This idea gives perverse incentives to rating agencies because their business is to compete for conpaniee to rate and be attractive to the conpanies by giving thumbs up to junk products. Generally consumers trust rating agencies, after all they're there to be unbiased, informative, helpful observers. So we need to make sure that when something is being rated the rater is truly unbiased and that's why it's best to use a public service agency that can't be swayed by things that aren't the facts. Government is the best regulator in this case.
+Pericles 1 The rating agencies have an incentive to stay in business, and in order to stay in business they must provide as accurate of information as possible to consumers. If consumers find out an agency is withholding accurate information or giving out biased (false) information, what do you think will happen to that agency? Will consumers stop trusting it and put their trust in the agencies with choose to give out accurate information and refuse to lie about their ratings?
+Learn Liberty So how come you never address human greed and corruption as factors in these little thought experiments? I imagine it's because that's where your argument would fall apart in a real hurry. These laws were made because at one point the market truly was free and some greedy and corrupt person gamed the system to make profit above all else and people suffered. The system is only as good as it's weakest component. That would be the humans in this case, who are prone to doing terrible things to make a fortune. Even with stringent regulations modern companies do awful things that hurt people and it can take years if not decades for someone to find and stop them.
+Robert Gernat Does corruption and greed not occur in the government? A common fallacy is to point to some potential failure of free markets, only to advocate statism. It's true the free market isn't perfect, but it's by far the best system for a variety of situations, including this one.
Men do not grow wings when they go into government. The same fallible men you think would be in the private regulatory agencies are also in the FDA. So what we're left with is the question "What system works better with fallible men?" This video tries to analyze the incentives facing both institutions of private versus public regulation, so it does take into account "greed" (self interest). You might actually notice that a central point of the video is assuming both institutions are following their own self-interest and it develops logically from there.
The regulatory agency that was the precursor to the FDA was founded because of what was the Michael Moore propaganda at the time, "The Jungle" written by Upton Sinclair. It made outlandish claims about the meatpacking industry, including the claim that a man fell into the vat and was sold as ground beef to consumers. Once the agency was established, however, it stated that the more severe claims described in Sinclair's book were "intentionally misleading or false."
+Robert Gernat You criticize the free market because of the actions of one or two companies, which in a free market would then almost certainly go out of business, and then in the next breath admit that government is ineffective at preventing the very things you decry in industry. So on what basis do you want more government involvement?
The important difference is that in a free market, you have a chance of switching to a more trustworthy or efficient provider, and if a better option exists, you can switch to it immediately. If the FDA becomes corrupt, you have no alternative, because they've crowded out any competition.
it's worse than this in the real world the government agencies created to rate or grade products and practices from some industry are usually controlled by the largest (or most politically active) firms of that industry. they but their own people (with the help of politicians they make large donations to) in charge of the agency that has the power over the products they make and pass their products while rejecting or delaying their competitors. this is why the FDA is run by employees from various drug companies, the treasury is run by goldman sachs more years than not. just for a couple examples.
Of course this only works because the government has a monopoly on enforcing trademark law, without which such logos proclaiming safety could be slapped onto any product regardless of whether the certification firm approved use of their logo or not.
We should separate Medicine and State.
'Congress shall make no law respecting medicine, or prohibiting the free exercise thereof..."
I understand where you are coming from here, but there are so many other factors in play that this simplified version doesn't exactly apply. The biggest factor I can think of offhand is information asymmetry and how dangerous that can be to consumers that may not be able to fully vet the medicines they may need. You also have to consider those that have debilitating conditions and could be taken advantage of by unscrupulous drug companies that can, in effect, create an "in house" testing company and provide falsified documents claiming the efficacy of their products. Companies engage in this activity in the current climate and it will only get worse if certain checks and balances are removed.
Also every monopoly created has some sort of government involvement. But everyone is going to come out and say OMG ANARCHY BLAH..
The problem with this video and others uploaded by Learn Liberty is that the opinions are expressed from a perspective that ignores the realistic conditions preventing their very solutions. If this were a land existing as portrayed in The Brady Bunch, then... yea sure, let the free market work. But these presentations, which always imply a stark contrast between huge corporate entities and government, reveal a blatant denial of reality. The system is thoroughly corrupt to the core. Legislation and elected officials are simply purchased by large corporate power, rendering them one in the same. With minimal investigation, it's revealed that money is often a huge incentive to persuade FDA allowance of drugs. Regulatory agencies are often just bribed by the very corporate entities they're supposed to be overseeing. I'm just not understanding how Learn Liberty sees a private regulatory entity as being less vulnerable to the same type of corruption. Competition is the ideal answer, but that requires a genuine free market. And for as long as laws are determined by corporate power, the idea of differentiating the state from corporate power is simply a comforting idea in an old black and white movie.
TubeBoy, You dislike both centralized certification and competing certification. I presume that your solution is that of the syndicalists. (They are anti-corporation as well as anti-government.) For those following this thread, consider that starting from the industrial revolution on, big rich firms have improved the standard of living --of the poor-- more than any other revolution. And while all that is abusive about big business must be taken along with all that it brings, keep in mind that no matter how big General Motors gets, they can't make you buy a car or work for them. Whereas, no matter how small the country, their government can make you do whatever it wants.
Walter Clark
I'm not at all opposed to competing certification. The point I was making is that to a large degree, it doesn't exist. Consolidated power in any form, whether it be by the state or subsequent to the merging of state and corporate power, is a framework that is inevitably much more susceptible to the type of corruption that advocates and perpetuates a tyrannical premise. Decentralized power was the American experiment after all. You say General Motors can't make you buy a car, but I disagree. I admit they haven't done that, but insurance companies, banks, weapons contractors, security contractors, and etc, have used their influence and power over an unethical government in order to secure mandates for such purchases. To sum it up, I really don't see huge flaws in the system... what I see are huge flaws in the character of most elected officials, which is evidenced by legislation that's clearly designed to benefit the very corporate entities who, in return, benefit the legislators. I guess I'd like to understand what ideas Learn Liberty has regarding the prevention of corruption. I suppose the real answer is that we all become more educated about who we're electing into public office.
Wow that's amazing how you blame a government monopolistic entity for corruption while asking for more government and centralization at the same time. Oh sure, we just need to elect the right folks. Let's try 10 times more and if lucky we'll find someone who not only can speak good enough to be elected, but also is able to actually do a decent job without having any competition. And if he's not good - not a problem, we can wait 4 to 8 years before a next try, right?
But what if the current government is good at medicine inspection, but not so good in food, or welfare? Well let's better not think about it.
ekklesiast
Umm.... I'd love for you to point out where I even hinted at asking for more government.
tubeboy8 Where you said that the key is to watch who is elected. Like it makes any difference. Maybe I misunderstood you.
each buyer decide for him or herself? ain't this just a methodical support to Quackery!!?
if the government authorized institutions should be put in check, an equal standing or higher body of officials with direct mandate from the people had to be established.
Very amazing however I think you forgot an important point! Because of the FDA, the pharmaceutical industry has stock prices which are known to be highly volatile as the decision of the FDA can be devastating on the stock price. In a free market these shares would be much more stable in price with the outcome that many more investment funds and in particularly pension funds would provide much more capital to this industry which ultimately would be used in R&D and we know how important the availability of capital is in this industry!!
hmmm... I consider myself mostly libertarian, but I do see a role for government in ensuring product safety, especially concerning pharma. I wonder if consumers really pay that much attention to independent certification agencies. This video does make great points, however.
Doctors man ask your doctor.
While I agree with all of the points the video make I think it leaves out something important. The free market certification system does allow safe goods to get to market faster it also allows unsafe goods to get to market, just without the certifications.
Most people would simply not consider a product that did not receive any certifications. However, low income (young adults, elderly, handicapped, etc.) individuals would opt for the less expensive alternatives which may have failed the safety tests but are still available because not receiving a certification doesn't necessarily result in expulsion from the market like the way the government system works.
I'm not for government running... well, anything really. This system alone has the potential to be dangerous for low income individuals, though.
One problem is that in a market with many competing certifiers customers have a hard time deciding which one is trustworthy.
On what ground should a customer decide wether such a institution he or she should trust, thus allowing them to build a reputation? Maybe there never was an incident. But is this really a good indicator if the certifiers are rather small due to the competitive market?
Another possiblity would be to look at their testint criteria. But making decisions of of it is quite hard. How should I know what kind of testing is neccessary.
The bureaucrats in government seem to be more trustworthy. Theiy are overseen by people the public elected, thereby must have gained our trust. All the time I would have needed to do research which label to trust every time I buy a product, I only have to invest once when deciding who to vote for.
You virtually trust every business that hasn't caused you or others any harm. We treat every man under the presumption of innocence, whether they produce things or not.
For instance, on what ground do you trust the producer of apples that you buy from? Do you always buy from the same producer? Or do you just choose apples that look good and are reasonably priced, regardless of who produced them?
The problem of "How can I know if X is safe?" depends on the kind of product X is. Because it is fairly easy to check if a strawberry is safe to eat or not; but it is not so easy when it comes to a jar of pills or the oil for your car.
But at the root of every decision you make, there lies your responsibility over yourself and everything you choose to do. With or without FDA, you should be careful and cautious of what you put into your body. I think that, at least, we can agree on that.
They do allow for dangerous drugs too. Damn you FDA....
Private certifiers can implement democratic elements & assure (to the best of their ability) they're fair through contractual agreements. Their entire business model is built on trust. The government is inherently untrustworthy since they wield arbitrary coersive power. Their trustworthiness & democratic elements are just as built on faith as the private actors, but at least they face rampant competition.
Liberterianism is just a nice picture of an ideal world with near perfect people living in it. The history of drugs (pharmaceuticals) shows us a different picture. This is a business where just too much money is involved and can be made, what tends to corrupt people and whole companys, with near catastrophic consequences for society (just google "biggest pharma scandals"). This HAS to be regulated. Same is true for the financial sector (-> subprime mortgage crisis) and other industries.
Very big companies often are very similiar to states in the way they work, their power and their internal problems. Also they are undemocratic.
I don't believe in extreme libertarianism and I don't believe in any of the extreme alternative. In some cases, state can be better for solving a certain problem and in some cases some other system (like capitalism) will do better.
Their monoplies are enforced by a states copywrite law. Without this they would have to compete.
What about the risk of having antibiotic drugs readily available without prudence and as a result of unnecessary use antibiotic resistent superbacteria are created? Is there a free market system that prevents the creation of superbacteria from overuse of antibiotics?
Faster (sans 11 year FDA approval process, sans IP laws) development of new ones?
This is exactly what is being argued with the UK's Food Standards Agency: walestribune.com/politics/questions-raised-over-performance-of-food-standards-agency
how funny is it when people who do not support credit rating agency for companies and government support private labs to rate medicines.
An Independent rating agency model can have serious and disastrous consequences. For example S&P Rating service settled $1.5B lawsuit for their hand in the 2008 finical crash of 2008. They had an incentive to stamp sub-prime securities as AAA investment ratings (fraud essentially) in fear that the company would take their product to get rated elsewhere. They are paid to tell the producers of products what they want to hear. It isn't a stretch to think this could happen to the drug industry given how much money is on the line.
This model can work in many situations but still has risk. Please include a balanced perspective including counter arguments when pitching policy instead of describing it as a magic bullet.
One of your best wish you had mentioned that the regulations have taken it up from taking 4 years to have a medication approved to 14
I am pro free market. But if the private would serve the FDA role, could it be possibile to have a mismanagement situation similar to what happened with rating agencies in 2008? (I am referring in particular to the "Big short scene").
Definitely possible but its also possible that the corporations would buy off people in the fda. Again its not perfect anyway you look at it.
But how do people actually respond to either certification? Are people smart enough to know about private certification, it's reputation, it's risks? Or do people just not care and buy all kinds of crap products despite there being information against doing so? If this happens at a large scale, the market can't correct itself. The private market is faster and looser and more efficient, but the effect might not pass through to the public (because the public is poorly educated). The government is slow, but you know it will have it's effect. And which system is more corruptible? This video doesn't go into any of the real world problems inherent in human psychology.
If all government regulation was abolished tomorrow and replaced with private certification, there would be so much advertising and obfuscation by the many certification companies and production companies that everyone won't know what to even believe anymore. The market can't correct itself under such heavy information overload.
Best argument so far. In addition, in a totally free market, certification won't even be mandatory.
If people don't care about private certification, why do you think they care about government regulation? Do people have any idea what kind of testing OSHA or the FDA makes businesses go through, or how effective it really is?
But if people *are* concerned about the safety and quality of products, they seek out reassurances. How many people today check out product reviews and testing videos and other sources of information about products before deciding which brand to buy?
@@macsnafu People are usually not interested in certification. That's why government should take care of it,because in this case customers ( themarket) are not doing in their best interest.
Also, what about discoveries of dangerous substances 10 years after some medicine was already approved? FDA make discoveries all the time, could private versions of it do it? Who would pay for it?
@@goranmilic442 If people aren't interested in certification, then what good does licensing do? If a roofer shows up at your house offering to re-roof your house, do you ask to see his license or certification? If not, what does it matter if he has them or not?
People will be interested if they are concerned about value and quality, and many people are, and are willing to pay extra to have it. Especially if they understand that government regulation is no guarantee of safety, quality, or efficacy. We ought to be concerned not just with the existence of a law or regulation, but also how well it is enforced, and what the unintended consequences of the law or regulation are. Is the law or regulation *actually* making things quantitatively better, or are you just assuming that it's making things better? Because it's, you know, a government law or regulation?
In short, government is truly incapable of protecting people from themselves, although they can sure harm a lot of people while trying to do so.
@@macsnafu People are not interested in certification because they assume everything is licensed and approved. It would be illegal otherwise, in medicine or roofing. If licensing would not be mandatory or would be privatized, customers would have to pay a lot more attention. Would they? If not, they would not be doing in their best interest.
And market is irrational. In my country (Croatia) there were discoveries about Chinese toys causing cancer and two cases of salmonela in meat from Poland. So Croatians stopped buying everything Chinese and every sort of meat from Poland. That was bad for businesses, until our version of FDA made it clear to public that the danger passed.
Government regulation is the best guarantee of safety you get, video told us, they take things slow. It's the speed that is an issue.
And you didn't answer my other question, what about discoveries of dangerous substances 10 years after some medicine was already approved? Who in free market would do such researches?
I won't say that this video is wrong. However, I do think it is a bit oversimplified. To depend solely on the government to certify goods is inefficient and can lead to horrible mistakes. look at the medical instrument industry. A hip replacement that caused horrible suffering got through via a loophole designed to save time (John Oliver, 2019). On the other hand, I do have trouble trusting third-party regulators as well due to the complex interactions they have with producers that can be manipulated outside my control. I would feel more comfortable if the government had some regulation of third-party regulators so that I know there is a medium by which I can influence their operation.
UL is not the best example. It's right there in the name. Insurance companies use them to determine the rates they charge manufacturers. The end result is the same but it really isn't a consumer information service.
I feel like the problem with this is that it only really applies to products that consumers can directly and immediately link to the health hazards they cause. If a drug has adverse effects, they may not be immediately perceivable, and are very easy to attribute to other circumstances. It, for example, took my years to realize that the soul-crushing emptiness I sometimes felt after school was caused by my Concerta. (I don't intend to lump that in with health hazards. I just wanted to give a concrete example of a consumer not linking a symptom to its cause.)
I just feel like when you apply market forces here, you won't have the same assurance of a medicine's safety that we do now. But I mostly certainly DO agree that there should be a way to buy goods that have not finished the FDA's testing.
"it only really applies to products that consumers can directly and immediately link to the health hazards they cause."
It applies to any product that a consumer considers 'risky'. Whether possible side-effects happen later, or sooner, there's market pressure for certifiers who can detect, and convey assurances about the safety of such products.
And if there's no way for a customer to identify the quality of the certifier's ability to assure safety? Because that's what I was talking about. If a certification fails and no one realizes that the certification failed, then the pressure to to succeed does not increase as it should. You see a similar problem in information security: typically when you have a breech, you do not realize you have a breech, and when you do realize that a breech has occurred, by that point it's often too late to identify the cause.
cjgargani "And if there's no way for a customer to identify the quality of the certifier's ability to assure safety?"
Similar questions: what if there's no way for a voter to gauge the ability of a gov licensing body to assure safety? What if the time and effort involved with estimating and tracking the cost (in peoples lives) of all the safe products that were rejected or delayed because of the gov agencies excessive caution is not worth people's time? Given that it seems unlikely that voters do have this infrmation, why expect that the licensing bodies operate efficiently?
The pragmatic question comes down to : Do we prefer a balance between caution and speed/responsiveness--and to preserve the option for people to decide for themselves what they put in their bodies. Or do we want excessive caution (along with its severe costs: harm and death for many), and to remove that choice from consumers?
The even more foundational moral question: Is it morally acceptable to use threats of violence against people to prevent the peaceful use of certain products?
I prefer the "excessive" caution and to NOT remove the choice from consumers. I think I brought this up earlier?
"But I mostly certainly DO agree that there should be a way to buy goods that have not finished the FDA's testing."
cjgargani "I prefer the "excessive" caution"
Well, you want a _high degree_ of caution--appropriate to your willingness to accept risk. On a free market, if there was sufficient demand for this degree of safety assurance, it would be provided on a voluntary basis. No need for the FDA. Better still, because the firms offering this highly conservative level of testing would be in competition with others, they firms would be incentivised to offer assurances of _their own_ integrity (they're be pressure for them to come up with ways to credibly demonstrate that they're not taking bribes etc)--which would lead to a level of transparency far in excess of what a monopolistic government agency can be expected to provide.
What kind of serious consequences does the official allowing dangerous products face? Surely not loss of customers
how about mandated product insurance? just curious
Why is the consumer constantly doing the pee-pee dance?
Because it helps him hold it in.
This same certification process can be used instead of licensing to determine the standard of proficiency for professionals such as doctors and even for public health merchants such as restaurants and hair salons. One of the chief reasons health care is so expensive is because the supply of doctors is artificially limited by the licensing system (and the number of med schools is artificially reduced by the State accreditation system.) Private, competing certification companies should be the future of product and service safety.
Who watches over FDA? that's the question
Tomasz Kaye, you are a good animator.
Perhaps but when the government has a monopoly and losses it, consumers are used to simply knowing a product is safe. And will assume it is so, and it may take decades for the consumers to realize the harmful effects.
So what do you do during the transition to keep everyone safe?
This didn't work in the finance sector where the ratings agencies were funded by the companies that were supplying the products. The incentive was to give high ratings to risky products because of where the finding came from. Okay their reputation has taken a bit of knock but it's taken a massive global crash to cause that and they're still very much in business. You're talking about drugs that can kill people. I'd prefer caution.
It is well known that the ratings agencies are complete garbage. The lenders all knew that they were selling (mortgage backed securities) complete crap. They even bet against that market. The government subsidized all of that risk. Your use of the financial markets as an example of free markets monitoring themselves reveals you have no idea what you are talking about.
I think the comparison still stands.
***** "federal government had very much de-regulated the financial and housing market" Whoa, that's complete BS. Government has distorted both markets: "Fannie Mae" and "Community Reinvestment Act" (strengthened by Clinton) have forced markets to issue risky loans and made it look reliable via help of implicit government guarantees, and FED has artificially lowered rates which has fueled housing bubble.
Great
In concept this is the same as getting a hescher for kosher food. However, there can still be corruption in free market, and it is becoming increasingly difficult for small food start-ups to be able to get a hescher because of all the unnecessary (non-halachic) regulations, or simply not having enough money to bribe the person doing the checks. How can a free market deter such scandalous practices?
" increasingly difficult for small food start-ups to be able to get a hescher because of all the unnecessary (non-halachic) regulations"
"How can a free market deter such scandalous practices?"
On a free market there would be no state imposed regulations, so one way things would be better is that the barriers to entry for small firms would be much lower--and competition between firms much fiercer as a result.
bitbutter I don't think you understood my question. By "unnecessary (non-halachic) regulations" I mean the regulations imposed by those granting hechsher* (sorry for the typo). This has nothing to do with the state.
What about products made overseas? Are we going to trust certifiers from other countries? When it comes to drugs, I want extra caution by the FDA.
"I want extra caution by the FDA."
I think you should be free to buy only FDA approved products if you want, and that other people should be free to choose the level of risk they're comfortable with too.
You can trust whoever has gained your trust. If you trust local certifiers only, then foreign companirs have an incentive to test their products by a local certifiers.
Opioids are a great example!
one issue, if a private entity were to certify a dangerous product for a large bribe, the owner of the company could just sell the business or just drop it and live off the bribe(we're talking about billions here). in the government certification, such a action is criminal and leads to that person not only losing their job, but can also face jail time for accepting that bribe and putting citizens at risk. how can you say that testing can't be too cautious, if they rejected it, they had to have a reason for it.
"if a private entity were to certify a dangerous product for a large bribe"
To the extent that this was a realistic possibility, there'd be market pressure for certifiers to credibly demonstrate that no such bribery was going on in their firm. Exactly how they'd do this would be up to their ingenuity.
bitbutter You know who you sound like? Alan Greenspan before the financial crisis arguing that banks have an incentive to not go bankrupt, take excessive risk or screw their customers over. Might you recall what happened next?
Hannu Marijarvi Greenspan, the central banker who created/amplified moral hazard in an already fragile banking system via bailouts? I don't think i sound very much like him at all.
bitbutter Then apparently you haven't listened to what he was saying before the financial crisis of 08 because he said exactly what you're saying. It didn't work then. It doesn't work now.
Hannu Marijarvi I don't know what he was saying, nor is it relevant, since the banking system is already subject to massive (incentive perverting) government intervention at every level.
I think you will find that in order to install electrical equipment, your equipment must be UL certified by law (or CSA in Canada) those certifications are part of the electrical code, which are part of the building code. No, you cannot go to a competitor for UL certification. You need to go to UL/CSA themselves. So it's still a monopoly, just a private one.
The video makes good points about risk aversion in civil service, but the problem lies with detailed wrong choices being made in implementation, not fundamental superiority of one approach as the video pontificates. Governments define markets. In some cases, it is hard to set the rules so that natural competitive markets arise. The government could just as easily establish rules for testing and allow companies to use third parties, that would compete for certifications that are acceptable for the government agency or even self-certify as is done for mileage/pollution claims by automakers. We see abuses by private sector, causing millions of premature deaths by excess pollution in cities, likely dwarfing any effects of the regulation case provided for drugs. It is also clear that market forces steer drug companies to invest in new treatments for erectile dysfunction, and not life saving treatments for rare diseases, another case where markets fail to work in an optimal way for public well being.
yes. competition is good, monopoly bad. Government doesn't have a monopoly on monopolies and isnt't the only source of monopolistic behaviour. Sometimes Government intervention is needed to create competitive markets by setting the playing field. Where natural monopolies arise from large barriers to entry is especially obvious in infrastructure: Utilities such as water, electricity, roads, bandwidth, it is not at all clear that private sector does a better job at delivering. Take public highways that enable trucking companies to compete for cost of transportation, non-private ownership of waterways. Contrast it with private railways, where chronic under-investment causes issues such as the Lac Megantic fireball that killed over 70 people.
What's the name of the music in the video?
Lets quit with the government regulation and implement all private certification. 📣📣📣
no price is to high for the safety of our family specaly within the medical areas. Some thing like entertainment technology yes you do not need regulations as well for tool. Those areas are less likely to get someone kill.
Risk tolerance is different per individual. It shouldn't be socialized.
THIS IS 2 WELL PAID FOR TO BE TRUSTED
Also don't get me wrong the FDA isn't perfect either it gets corrupted by money in politics but that's another problem for another day(where the argument becomes getting money out of politics)
I agree with this but the drug and food administration must exist and keep working as they have because because medicine and the food we eat is something that most definitely needs all the tests and regulations possible to not be affected by poorly tested medicine that could kill thousends.
You assume people would agree to take medicine that is shown to kill people, or that doctors would prescribe it. The same with foods. People aren't stupid. And if you think they are, then why would government bureaucrats be any better?
As the title of the video, and the video itself explains, the excessive caution that's the result of a the state's monopoly position can kill many people too--by keeping life saving medicines out of their reach.
***** "It may be excessive, but they are there for a reason."
Excessive doesn't mean 'a lot', it means 'too much'.
Of course side-effects are very important. When we take _all_ affects of a new medicine into consideration the imbalanced incentive structure of a monopolist licensing agency can be expected to lead to excessive (and 'deadly') caution, as explained in the video.
bitbutter Hi man. The video makes the argument, assuming its numbers hold up, that it's better to poison some people if by doing that you save more people. Would you say it's justified to give a pill that is essentially to them poison to two kids so that three may live? Would you say it's justified to strike dead with a sword two kids that are inadvertently blocking your path to a cliff where three kids are about to fall off it, if that was your only option to save them? Why not?
The video makes what is essentially a psychopath case: Kill some people directly in order to save more. Except everyone but a psychopath sees a difference between not being able to save some people since you didn't want to kill some others and between killing some to save some.
Know what we do to that person with the sword who strikes down those kids? We put him in jail or give him the death penalty. And you deserve the same if you knowingly implement lower health standards so that more people are poisoned so that some are saved.
Hannu Marijarvi "The video makes the argument, [] that it's better to poison some people if by doing that you save more people"
I co-wrote the script. I don't recall implying or making that argument. Can you point me to the exact wording that you think implies it?
Just a bit misleading... Yes, I sometimes question myself what criteria is used by FDA to approve (or disapprove) a product. I think there should be better education and transparency for those procedures. However, the intent is to look for us. To relay on private "certifiers" is a bit questionable solutions, I personally worked with UL (mention on this video), and is a very good and reliable company, however, this means that any "shady company" can become a "certifier".... Imagine that... Company A invest on a not-so-good product, and also invest on became a shareholder of a "certifier" company... not good.
What about private rating agencies that rated those toxic mortgages AAA in 2007? The problem is private rating agencies can be bought.
Government agencies can be bought too.
Who was "bending the markets" to make risky loans look like reliable ones? It was Fannie Mae. Who forced banks to issue mortgages to poor? It was Clinton's CRA. Who has fueled the bubble with artificially low rates? It was Fed.
UL listed stuff is generally pretty good. I did have a brand new UL listed window fan burst into flames on the first use. I really don't put much faith into any "sticker". There is a lot of junk being sold out there in hardware and dept. stores.
did you guys hire bitbutter?
If not, they should.
I do stuff for LearnLiberty on a 'per-project' basis, when our motives match-up.
bitbutter Did you do the animations for this video?
***** I animated it, and wrote it together with Howard Baetjer Jr.
bitbutter I thought so. It has the hallmarks of your animation style all over it. I love the attention to detail with things like how everyones dancing. You didn't have to do that to communicate the point but you did anyway and its charming. It really gives the animation character.
Private monopoly is atleast better than public monopoly
Private monopoly can become duopoly or more
But public monopoly is straight away exploitation of liberty
Yikes I work in finance and i got some bad news for you private monopolies are far far worst than public ones
@@fb079 private monopoly can still have competition
Public one are just wasting taxpayers money
Private can survive only if government aid is there
@@yydd4954 in reality there's never any competition. If you look at the audit industry the big 4 have zero competition they are all involved in corruption.
Credit rating agencys have zero competition they are partly responsible for 2008 financial crash.
@@fb079 never any competition? Oh really?
And 2008 Crisis happened because of easing the rates of home loans
Don't play with the price system and u will see competition. Read Hayek. Price system is very important
@@yydd4954 if your blaming the entirety of 2008 financial crisis on one factor then you simply don't know enough about it.
Junk bonds which should have been identified as junk were given AAA rating because of a private monopolies. The big 4 get fined billions by regulators for corruption. There's no real competition in private monopolies