| | I posted this on another site in response to some negative and uninformed comments about capitalism. My ending comments belonged more on the dissent forum, so here it all is, unexpurgated, in Dissent.
First of all, and without making any qualifications, the "invisible hand" is quite frankly the ultimate, undeniable. unavoidable regulator. Make bad business decisions, and your business will fail... ultimately. Better businesses will replace you... ultimately. No one should mistake that it does work. The only real question is how much damage will occur during he course of correction.
Americans generally don't want to see any downsides. Today's mantra is "it's not my fault, it's (fill in the blank's) fault". We're willing to fight a justified war, but only so long as none of our soldiers to get hurt. Increasingly, we ask for government to pick us up whenever we do something dumb. Comparatively, the "invisible hand" is pretty harsh. It says "you dug your hole, now you learn how how to climb back out". So it's not a popular message.
Your mention of "precedence based law" caught my attention. Depending upon the context with which it is used, I either agree or disagree. I disagree in many civil matters, when one law -written for a specific purpose - is subverted by the courts for an entirely different purpose. These are considered to be "case law" , and I think are poor, expedient substitutes for writing new laws that have been clearly thought out and applied to the specific situation. All case law should have a "use by" date, after which if no thoughtful legislature has established a proper and fair new law, the case law should no longer be acceptable.
Where I agree with "precedence based law" is when we are discussing lessons that have been learned by (fill in the blank) industry, and are recognized as ethical and safe practices. Industries such as banking have acquired a wealth of knowledge and experience about how to properly and safely conduct their businesses to make a profit for themselves and their shareholders. I think it is fair to say that bankers and Wall street marketeers know and respect these lessons, and well over 90% of the time guide their actions by them. This is one reason why these industries have worked for so well and for so long without major problems. They generally have used far, far better judgement than the average citizen. It is also why Greenspan generally respected their judgement, and trusted them to continue making good decisions.
The problem arises when assuming these industries will never make a bad decision. People are still people, and good people can still make mistakes. Lessons learned are sometime forgotten when markets become (can't resist using Greenspan's famous term) "irrationally exhuberant". Were there some (very) specific regulations in place to preserve and ensure compliance with the lessons learned by the industry, a large portion of the current economic crisis could have been minimized. But I am only referring to lessons learned by the industry, not to arbitrary political controls and meddling.
The major failure of regulations is that they are most often written by politicians with additional political agendas. The regulatory morass that embrace the US prior to (and still even after) the Reagan era, severely hindered the healthy economic growth of many major industries. Reagan's, Bush 1's, and even Clinton's policies helped reduce the regulatory bite, many of which had little to do with the health of their industries.
No mistake should be made about who is the most competent to write regulations. It is the industries themselves that know which practices are good and safe, and which practices are bad. They are far, far (far, far, far) more competent than congress on such issues. However, since there is always room - and there always needs to be room - for innovations, industries themselves will probably always be reluctant to close the door on new ideas. Therefore they are always reluctant to strictly police themselves by a fixed set of rules - even if it their set of rules. My point is that it needs - absolutely - to be their set of rules, but that rules still need to have teeth in order to assure they are followed. The government should only have the minor role of providing teeth to the values and rules established by the various industries.
In this way, industries are still free to examine and discuss new products, practices, and services and assure that the proper lessons are applied. Plus political hokey can be prevented from interfering with the proper and healthy running of industry.
This opinion doesn't follow conventional Objectivist thought, although I feel it should have a place. Human knowledge has grown to learn and assimilate the view that we should regulate ourselves to prevent someone from running a red light (and physically injuring others). I think it is just as logical to learn and assimilate business lessons to prevent someone from running clearly identified bad risks (and economically injuring others). Each action represents a force wielded (intentionally or unintentionally) by one against another.
mea culpa, mea culpa, mea maxima culpa...they don't take away Atlas points, do they?
jt
(Edited by Jay Abbott on 11/08, 9:38am)
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