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Jan 26, 2023·edited Jan 26, 2023

Hi Ryan, i have a lot of respect for you as a programmer and i agree with a lot of the problems you describe in the first paragraphs. But i‘m always a bit perplexed by the solutions you propose in order to solve these problems. I don‘t think it makes much sense to argue against your anarcho-capitalistic leanings, because that would just take way to long. I try to argue against what are the most obvious faults in your arguments. Also, because you don‘t seem to like the word capitalism, i will be using ether real existing capitalism or state-capitalism to describe the kind of capitalism we have today.

>The regulation-proponent never addresses that use of regulatory force is anti-production by definition.

This is somewhat of a circular argument: Regulation is anti-production because the inhibits companies from producing in a certain way. The thing missing here is that there are other forces like monopolistic practices and anti-competitive behaviour that hinders productivity in a economy. I know of course that in a ancap world those problems would just magically disappear, but in current real existing capitalism, if regulation can limit the extend to how these anti-productive activities harm the economy, regulation itself can increase productivity.

A perfect example would be the one of the reason you wrote this article: The Apple store monopoly. Because Apple has a monopoly on there operating system and its app store, it can force developers to charge whatever there want as their commission when purchasing an app from there store. The OS does not allow other alternative stores, eliminating any competition.The solution: forcing apple do abandon this anti-competitive practice by allowing other stores to be installed on there OS. It‘s really hard to see how this is not good for app-developers.

>Behind every regulatory measure aimed at a corporation is another corporation looking for a competitive edge.

I think this sentiment comes from the thinking that every state is corrupt and if the state regulates the market it does so because it is bribed by a company or a specific business sector to do so, giving that company or business sector the advantage in a otherwise perfectly balanced free market. While i agree that most regulation in a state-capitalistic system are motivated by that dynamic, it does not mean that it always must be the case. A state is at least potentially democratic. If a regulatory measure is motivated by democratic forces, it can lead to a juster and more productive economy.

>The software world I hope to help build is different than that which exists today, and that which Big Tech corporations have no problem driving us toward. This would be a world with widespread competition, simple and rewritable building blocks at the core of the ecosystem, simple and open protocols for networked communication, simple and open file formats for the most important information, a high value for user experience and design, and the impossibility of extinguishing computing freedom.

It‘s hard for me to see how in a world of Big Tech, be it in a state-capitalist economy or in an anarcho-capitalist world, even if we had these simple and rewritable building blocks, file formats etc. such large companies could not just use there monopoly and influence to change these building blocks, file formats etc. to give them a market-advantage and to solidify there monopoly like Microsoft, Apple and Google have always done. Essentially leaving us where we are. Even if the playing field is initially leveled there are inherent dynamics in market based economy that help create these monopolies without any state intervention: Network effects, economy of scale, lock-in effect to name a few.

>Man was not born into the world with computers, and operating systems, and software (in fact, he wasn’t born with clothing, food, housing, and a great number of other such things)—he had to productively act in transforming natural resources into those products.

This is an interesting point to bring up since almost every original design of those components that make a computer today have been developed by publicly funded institutions, away from competition and full of people who did the work they did out of pure interest and love for what they do. I say this is because of the common idea that invention can only happen in a competitive free-market environment while historically the private sector has done very little for technological achievement's in terms of ground work and heavy lifting compared to the public sector for which you seem to have so much disdain of. As a matter of fact, even after the invention of computers and telecommunication the private sector ignored those technologies for decades because it didn‘t see any way to generate short term profit form it.

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This attack on regulation and the alternatives/solution you offer strike me as simplistic. It's equivalent in spirit to saying,

"The rule of law is too restrictive. We should remove all laws and then people should just not murder eachother and stop stealing. Let's all be nice please."

People will probably always steal and always murder, unless maybe we live in a post scarcity world, and even then it will continue to happen.

And the same applies to companies. Left unchecked, they will always try to maximize their profits and gain market advantages. And market advantages are not productive. In fact they destroy productivity as it's harder to make any progress without the monopoly hand slapping you away. It's not a plot, it's not a conspiracy, it's not that these people are evil (well some are) - it's just that the incentives are there pushing them towards this way of doing business. They'll prioritize growth to satisfy shareholders.

Unregulated companies do uncompetitive things and hinder the productiveness of entire sectors.

I'm not in favour of extreme regulation, but saying that all regulation is useless let's just be nice to each other and make better software is really unconvincing to me.

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> saying that all regulation is useless let's just be nice to each other and make better software is really unconvincing to me.

Well, that isn't what I said. You should try turning your ideological blinders off.

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>The regulation-proponent never addresses that use of regulatory force is anti-production by definition—particularly anti-production-which-is-seen-as-bad—and furthermore how anti-productive behavior can ever be contorted to instead be productive.

Perhaps I misunderstood then and I'm conflating you calling it useless with calling it anti-production. Nevertheless, the point stands that you believe regulation is unproductive? I believe otherwise and wrote a comment. I may be wrong and one of the brainwashed regulators who loves the public sector. I do agree with some of your criticism of regulation and overly zealous regulation, I simply voiced that your alternatives were unconvincing.

Maybe if you specified cases where you think regulation works then readers like me wouldn't wrongly believe you think regulation is useless. Unless you really do believe it's useless.

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I think the point he was trying to make was that in a market with a lack of regulation, the best will rise to the top. Due to that, though big corporations (Note they probably got big because of a better product) like google or apple may rise for a time, other people will innovate and create a better product. Regulation, like he says, can artificially prop up a lesser product simply because it does not fit within the bounds of the regulation. I will admit, I agree with his points, and my belief is that the world we want in the future cannot be made by legislation that restricts, but by a belief in what is the right way to act and standing by those principles. Not purely anarchy, because there does need to be law and order. I think two good resources to look into (These are where I got some of this belief from) would be "Everything I want to do is illegal: War stories from the local food front" By Joel Salatin (On direct examples of how regulation has inhibited the small farm front. Pretty fun yet infuriating read.), and "The Law" By Frederic Bastiat (On how law and the government should operate). The law should exist to keep secure the person, property, and their liberty.

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Well written Ryan. Big Tech has created "experience machines" for decades for us all, and the key to their adoption was figuring out how to hijack reinforcing dopaminergic pathways and make the experience addictive. Everyone has struggled (or continues to struggle) with social media addiction, and look how much money that industry has printed.

Your conclusion felt unsatisfactory to me, however. How can we induce productive human action? Society strives for this constantly, I believe as a default, yet we are constantly led astray by the vices of money and fame. These tend to come in fields that are NOT making the human condition better (which professions and fields make the most money?). I agree that the free-market + necessary regulation is the future. My question is, is it possible for capitalism to incentivize productive human ambition in this regards?

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Thanks for the comment - I appreciate your thoughts.

> is it possible for capitalism to incentivize productive human ambition

I strongly dislike the term "capitalism", especially as it's usually presented, which is within a dichotomy, being merely one choice of several. There is only one axis of relevance. Is there involuntary enforcement of law through a monopoly on the legal initiation of violence, or is there not? If there is not, then that is best described as unregulated free market capitalism. Anything else requires, in principle, involuntary initiation of force.

I think economic activity is correctly described as "human action", because it isn't only about incentives, redistribution of wealth, and so on - it's about human psychology, human desire, and the human condition. Call to action through passion is an unchanging constant within the human psyche. It does not need to be incentivized through a top-down enforcement mechanism, it's the entire human story.

You correctly say that individuals strive for productive human action all the time. I wrote this post mainly to oppose the defeatist narratives which see human action as inadequate in favor of regulation by force. There is no better mechanism to reward human action than voluntary exchange of goods and wealth. It can never be perfect, but *involuntary exchange* quickly becomes corrupt. It distorts reward mechanisms, and causes precisely the problems you describe - striving for wealth becomes more about fighting over levers of power, rather than providing a product or service for which someone voluntarily pays.

This is why I write about the alternatives as "hollow victory". If a system succeeds and thrives on *any other basis*, no net positive human action has occurred, but merely distorted redistribution, chosen by central actors who have the ability to arbitrarily choose winners and losers (and thus to profit immensely by forming relationships and making deals with future winners).

It's not possible to use the existing economy as a case study of free market capitalism. You correctly suggest that some fields do not improve the human condition, but centralized control has dramatically distorted the playing field. For instance, without the Federal Reserve, fiat currency, and artificially low interest rates, it becomes much more difficult to finance a worldwide imperialist foreign policy, and to finance a thriving aerospace and defense sector.

I'll finish by suggesting that I don't believe anyone is in a position to decide, in a top-down manner, how to organize economies, and how to organize society. No individual should consider themselves smart enough to decide how to organize incentives for an entire civilization involuntarily. They may be smart, but they are not incorruptible - and even if they were, their successor has a good chance of not being smart, and not being incorruptible. When individuals take power, attempt to play God, and distort reality into their designs, it has a way of collapsing and causing immense suffering.

> I agree that the free-market + necessary regulation is the future

Now I just need to convince you to remove the "necessary regulation" part. :)

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Thank you for the response. I realize that there is a lot of nuance in your reply that I may miss - this could easily be an hour-long conversation.

From what I can understand, you are arguing for unregulated free markets. The example you use to demonstrate this is the Fed, and how it's primary (and enormous) downside is it enables a military-industrial complex and imperialism. I don't disagree, but there's certainly more nuance to the Fed than that.

With most arguments, extreme positions tend to fall apart easily, so I will not argue against the position I read - that regulation is always bad. Instead, I will assume you take the "90% libertarian" stance that most regulation is bad (but not all).

First of all, let me justify why I think you believe this. Regulation in America is seen as an incompetent and dirty thing, and rightfully so. There are several problems with the current regime of regulation in America:

1) Conflicts of Interest - Citizens United vs FEC (2010) marked a significant victory for corporate America, allowing unfettered access to the puppet strings of elections. This ruling took a few elections cycles to take effect, but I believe a large reason corporations enjoyed a 10-year run of low interest rates and high profits may have been driven by this ruling. Corporations obviously enjoyed massive power before 2010, but this only helped turn up the temperature on mixings and dealings.

2) Time Value - Regulations take years to implement, often following multiple high-profile missteps and failures in industry. The most highly regulated aspect of our entire economy is the money supply. Yet somehow, the crypto industry has imploded about a half dozen times now and destroyed trillions of dollars in personal wealth. Yet the federal government STILL hasn't figured out how to regulate it, when the playbook is staring them right in the face. And this ties to my third point,

3) Incompetence - How has crypto gone virtually unregulated for so long? The playbook for the government is staring them right in their face. The entire purpose of the Federal Reserve, Treasury, and associated entities is to control the supply of money. The history of these organizations is rooted in the wild west of banking in the early 20th century, when people hid gold bars in the walls because the local bank simply couldn't be trusted to responsibly store their savings. Any mechanisms to prevent things we take for granted now, such as preventing bank runs and fraud, were entirely inadequate. The government HAD to create some sort of mechanisms to prevent trust in the government and economy from completely evaporating. If bitcoin existed in the 1920s I'm sure everyone would have bought in even more quickly than today. Really, the only answer I have for my question is incompetence.

Industry is far more interesting and lucrative for the vast majority of professions. So a lot of smart and talented people capable of changing the regime instead end up working on the myriad of interesting, topical, timely, and rewarding problems available in corporate America. A government job in America is widely seen as unenjoyable and soul-sucking, compared to the alternatives. I'm sure some parts of the government are enjoyable to work in, and of course there are very intelligent and competent people in the govenrment, and I do not mean to disparage them by any means. But I believe this sentiment holds true for many professions. It's a matter of probability - as a whole smart and talented people gravitate towards careers that will reward their intelligence.

Regulation doesn't HAVE to be this way, however. It could be free of special interests, be timely, and be competent. It requires a massive regime change, but this is America. Anything is possible here.

Caveat: I speak of none of these things with authority. I'm a software engineer by profession, with a slightly diverse education. I like to read and learn too.

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I know what I’m arguing. I am not a minarchist. :) I don’t believe in involuntary regulation because I don’t believe in rulers. I believe in voluntarily chosen leaders. In the case of software, I don’t think there is any better metric than the voluntary adoption of alternatives that compete with large, exploitative tech companies.

The American idea of limited government, free of special interests, is a fantasy which has never held up. It is sold to kids in civics classes, yet it remains one of the most absurdly backwards ideas. The U.S. federal government is the largest, richest, most powerful, and nearly most deadly organization to exist in mankind history. The mechanisms which have been established to—in theory—regulate the money supply (among many other things) have inevitably been corrupted and are an abysmal failure (in fact, it’s likely that they were never established for corruption-free purposes).

In the case of crypto regulation, I am not at all interested in that. Poorly made investments deserve to cause economic pain. Regulation which makes malinvestment less painful does not deserve to exist. I believe that individual investors should take responsibility for their investments.

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