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Comment by mycroft-holmes | Hacker News Reader

Everybody has varying levels of comfort with the amount of risk they're willing to take. There's no need for regulation. Let the companies operate how they want to operate and let people decide if they want to do business with them. We don't need bureaucrats telling us the level of risk we're allowed to get ourselves into.

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Leaded gasoline. In my 70s-era car, I want to use it instead of unleaded, since it improves my fuel economy significantly. However, the total cost of the lead in the environment far outweighs the economic benefit. We needed regulation to fix this.

Thalidomide. Regulation prevented thousands of deformities in the US by imposing a proof-of-safety barrier before the drug was allowed to be sold. Other countries were not so lucky as to have that regulation in place.

More to the point... How, as an individual, am I supposed to make an informed judgement about the relative risks of MtGox vs Bitstamp, say? I have no inside information about how those companies operate. There's a huge information asymmetry problem that regulation alleviates.

> There's a huge information asymmetry problem that regulation alleviates.

How does regulation alleviate it?

By forcing companies to disclose the truth about their product.

We could easily go back and forth with cases that show the market regulating itself or bad events that happened when there wasn't any regulation in place - not because of it. Anyways, to the more important point.

You would make a judgement based on their website and feedback from sources such as HN, Reddit, Twitter, word-of-mouth, etc. That's how we all make decisions based on nearly everything we use regardless of whether or not it's regulated by the government. And if it's a new service where you don't have access to credible sources, you make a judgment based on the level of risk you're comfortable with.

That's exactly why some people are willing to give emails or phone numbers for 'Show HN' posts on here and others are not. Some don't care so much and really want to try the product. Others want to wait to ensure they are credible.

When too many people take bad risks, it can take the whole economy down with it, affecting people who never took the risk in the first place. So yes, we do need bureaucrats to regulate risky investments.

And why should we trust bureaucrats to do this? Won't they just sell their political power? Who will regulate the regulators? And who will regulate those regulators? I don't think you've proposed a real solution.

1. I haven't proposed any solution. I'm defending the existence of regulators. And I never said regulation was perfect. Just that we need some.

2. Asking "Who will regulate the regulators" is unproductive. Obviously, human nature wont change, and corruption will always exist. But just because regulation isn't perfect doesn't mean we should throw it out.

Also, you should already know the answer to your own question. By promoting transparency, citizen participation, and establishing checks and balances, we can mitigate the effects of corruption (but not entirely). This has been known for, I dunno, a few hundred years. Are we really debating this now?

That ship's already sailed.

Governments regulate things that are risky. It's the main reason we have agencies like the FDA and SEC.

Are you familiar with the revolving door between the FDA and companies like Monsanto? It doesn't make me feel much safer about what is approved by the FDA. Not to mention the number of drugs that could be saving lives but are tied up in their bureaucratic processes.

Let people decide what they want to consume.

I don't necessarily agree with regulating risky things, so there's no point arguing with me. I was just pointing out that we already do it, and are likely to continue doing it.

Which I believe is a horrible mindset to have. That's why I prefer to inform people of these things because "we already do it, and are likely to continue doing it" isn't acceptable in my book.

We already did slavery once, and were likely to continue doing it at the time. We already kept women from voting, and were likely to continue doing it at the time.

First off, it's a little hyperbolic and a straw man to compare risky behavior like trading bit coin with civil rights violations like slavery and women's suffrage. If nothing else, risk minimization laws protect everybody equally.

And although I personally agree that it shouldn't be the government's job to baby sit people, the country as a whole is currently going the opposite direction with things like the Affordable Care Act and Sarbanes Oxley.

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