This is always going to be the case, because regulation is typically a form of friction.
It is the shape of regulation that matters, and ideology on either side of the divide is religion.
Good regulation and regulators would punish anti competitive behavior, but this will also act as a drag on firms, while preventing firms from reaching certain sizes and potential economies of scale.
The point is that regulation deserves to be understood and crafted well.
Those economies of scale are meaningless to consumers if it means a single firm squeezes everyone in the supply chain and captures the benefit for itself.
This is also a specific weakness in American conversations. The divide between free markets, competition, and regulation are ideological.
If you want good markets you need good regulation and incentive structuring.
> Actually, in the real world, the worst markets are also the strongest regulated: housing, education and health care.
> Meanwhile the fields that got to be regulated last brought us the most wealth, advances and innovation: high tech & software.
Financial markets are highly regulated. They are one of the most structured markets out there.
The outcomes in all those markets, whether they are good or bad, is a direct result of how the markets are structured.
The 2008 financial crisis, for example, was a direct result of regulators being defanged and underfunded for multiple years.
If you look at technology: innovation amazing in the era of unlimited horizons, the era of "move fast and break things."
However, the cost of externalities from inventions like social media, were not captured in that market structure. This means that firms can absolutely pollute or addict people in the information economy, capturing the profit but socializing the costs.
The ability of dominant players to consume/acquihire upstarts and keep their market position, is a drag on innovation and consumer outcomes today.
The situation that was faced in the early days of a new technology is different than what is faced in its maturity, when the advantages of the nimble upstart give way to the massive overlord.
At each stage, you have to craft the incentives and rules to ensure you achieve the outcomes you (as a nation) actually priortize.
That's not true. EU regulations like the AI Act and Digital Services Act have different obligations and requirements for large and small businesses and that amount can't be zero because being a small business doesn't give you a free pass to cause damage to society.
I'd be curious to hear about specific examples of AI regulation that affect small businesses without a good reason.
Not having regulation is also "not free" because it imposes external costs on the rest of society. The goal of regulation is to reduce these external costs and instead impose them on the people (broadly) responsible.
Great example. An highly regulated field (aerospace) put so many barriers of entry for startups and competition that the incumbents simple have to reason to innovate or even compete anymore.
I heard there used to be dozens of plane-building companies when the field was unregulated, with new, more efficient models and lower prices appearing regularly. I wonder what happened.
> I heard there used to be dozens of plane-building companies when the field was unregulated, with new, more efficient models and lower prices appearing regularly. I wonder what happened.
I heard that this is nonsense. There never were more than a handful of large aircraft builders (still are plenty of small ones), safety records certainly weren't better in the era before consolidation, and new entrants funded by the might of their governments have failed not because of regulation but because what airlines actually want is lots of identical aircraft from a reliable supplier and the new entrants haven't really been competitive in terms of performance either. The certification is complex, but so's building an aircraft, and it's really only the people further down the supply chain that need the protective umbrella...
But Boeing and Airbus kept desiging and building new and improved planes.
There are multiple aircraft manufacturers for smaller aircraft, and there are several showing up for electric aircraft today.
For jets, the capex required to build them is massive, and its never going to have an upstart just up and build a jet.
The regulations in place are the reason why its safe to fly, and airlines have the safety records they do.
This is the degree of safety end consumers want to be reassured that its safe to fly. The checks and balances in places create the market that you are hoping to give over to cheaper upstarts.
The market doesn't exist without that safety regulation.
See how people feel uneasy when flying Boeing after the decay of their engineering and quality culture became public knowledge.
> Markets, left to their own devices, do not end up automatically being competitive in favor of consumers.
True. Does not mean all regulation is increases competition and marker efficiency by default. If anything EU has long abandoned the core tenets of Ordoliberalism and "Social Market Economy"
Right now the weakly regulated American market is delivering staggering competition where massive corporations are fighting tooth and nail over my 100 bucks.
I kept hearing the same about previous age tech and there also Americans rule the Internet: Google Search, Workspace or m365, AWS, Cloudflare... Even Linus moved to the US.
They've been pretty efficient in squashing any potential competition because of that weak regulation, yes. Don't confuse it with competing on the merits of their products.
These are effective monopolies competing to become super monopolies - the period leading up to dominance by one or two is beneficial to consumers with freebies and cheap offers that also completely lock out any smaller players.
If you don't let such things develop in the first place then there's not enough money to round out and scale the product. So if we want world beating products we may need monopolies but we can nationalise them in the same way we nationalised big infrastructure in the past. Then at least we're not the tail wagging the dog anymore.
There's a big difference between governments regulating to benefit their own control and power, and regulating in favor of consumers.
Most regulation in the EU have jack-all to do with consumers. There's a couple of niceties - having all prices displayed in comparable unites (EUR/kg, EUR/liter etc). But apart from that the regulation have broadly served as moats around the largest businesses.
I wouldn't even call it a communication problem - I believe it's more a media problem, than anything. Good news are minimized and bad news are amplified to the maximum - nowadays even broadsheet newspapers operate with tabloid headlines, and that is really bad.
We somehow need to "want" a slower news cycle and simultaneously push back against the algorithmic outrage. The world is more predictable and safer than ever but the perception of the average person is not this, it's manufactured outrage at every possible opportunity and topic.
Despite the average european objectively being better off and safer than a decade ago, almost none feel that way and that is almost 100% due to the news algorithms being tuned to keep you in a constant dread cycle.
Awesome!
But, looking at the numbers the decrease in totals are due to fewer registered "street crimes", less fraud and legalization of cannabis (removing a 183k comparable from 2016).
Violent crimes however went from 193,542 to 212,335. With rapes almost doubling, going from 7,919 to 14,454 (82%). Murders remained stable though.
We can debate which of these crimes have a greater impact on the feeling of safety. Personally I don't really feel unsafe due to people being caught stealing a sweater or smoking weed (when that was illegal).
So I don't think this is as clear cut as the headline number makes it seem.
I feel like it's valid if people want to put more weight on the violent crimes.
> cooling off [...] seller liability [...] Right to repair
Let's not forget I am paying directly for those when I buy a product. Those benefits are not free, they cost money. The money has to come from somewhere. It can't come from profits (since those are the sacred reason the company exists in the first place) thus they will come from higher prices.
Higher product prices mean less competitive companies. It also means fewer startups which must implement the required regulation no matter the market says. Then you need protectionism against Chinese competition.
But the worst is that I must pay for those benefits whether if I want them or not. Thus my choice is reduced. I cannot vote with my wallet and send price signals in the market to tell sellers that I want those benefits or not and at what price. The market gets corrupted. The economy falters. Outside competitors gain. The Government needs to intervene again and again, growing stronger and more intrusive "for my own benefit".
It's the decay spiral we are witnessing here in the EU right now.
> But the worst is that I must pay for those benefits whether if I want them or not
that regulation acts as a lower bound on what it takes to do business in the place. You also pay for companies not dumping toxic material on the streets, for appliances not catching fire, for not eating rotten food and million other things. All of those regulations of course "corrupt" the market for the good of a society so it's not just a race to the bottom. The idea of a free for all market is an utopia that doesn't exist ... thankfully.
He's stating a fact that you don't dispute.
You follow up with hyperbolic language; "eating rotten food" (as if anyone would purchase their goods from purveyors known to disregard food safety).
In a market that has been designed to let people take part in voluntary transactions, we also design methods for making sure that the counterpart takes responsibility, and delivers the agreed amount quality of product.
If you purchase a car that won't turn on, you're in your good right to make a claim against the producer. Same for all the other things you mention. And people do.
You're making a point about negative externalities. Agreed that a factory shouldn't just be able to poison a river, because there's no tangible cost to piping your dirty water to one. Here it makes sense to make artificial interventions, in my opinion.
I never tried to dispute the fact, I'm disputing the idea that we should be free to opt out of benefits that have been agreed as the minimum requirements to do business in a society. I would actually go further and argue that allowing that freedom would lead to everyone being worse off. Having minimum standards in a society gives a solid foundation on which to build, can't think of any society that doesn't have them.
A way more interesting conversation would be where to regulate, how much, for how long, what impacts would it have in innovation, etc not that I want to be free to get sold broken goods.
> as if anyone would purchase their goods from purveyors known to disregard food safety
How would you know they disregard food safety if there's no regulation on what food safety means?
The choices you are presented with, are always a function of market structure, aka the interplay of incentives, regulation, and competition.
You have a market because your taxes pay for many things, ranging from policing, to courts, to power and standards underlying how various systems work.
The choices presented to you are always a trade off vs other options. Having regulation that dictates how plug points and voltage works for example, reduces the choices you have, but the baseline standard means many other things can be built because standardization enables modularity.
The position that there exists some platonic ideal "choice" isn't even useful as an illustrative argument in this context.
Markets that are effective at ensuring better outcomes for the median or average consumer are things that have to be crafted. Figuring out the correct extent of intervention, (whether you champion less regulation or more) is the issue.
I went to California earlier this year.
In our apartment we had a freezer that was clearly made before politicians thought to decide to put a cap on how good a freezer could be.
It was fucking amazing at freezing stuff. No freezer I've ever used could freeze this good.
It was probably from the 80's - old/sturdy AF.
I wouldn't mind paying for some extra solar panels to feed it.
I’m not sure that’s a function of regulation but more a function of most modern freezers defaulting to -18°, where an American or industrial freezer is -22 to -28°C.
Getting a better energy efficiency score is one reason (and consumers are motivated on running cost, not just environmental) but presumably these are cheaper to manufacture as well.
I have an American style, EU-compliant freezer than I can set to -26° which I bought for preparing sashimi safely. It rocks! Highly recommend them.
And it's not as if there aren't a bunch of somewhat arbitrary regulation in the US either.
But the general sense I got from the US, was that people still feel agency to improve their reality, and that there's fewer artificial barriers to that end.
(Except for building houses in California. omg. That sounds like a horrible horrible process. At least for those I spoke to).
I don't think you're taking my "there's two sides to regulation" comment in good faith.
I gave a pretty clear example of pro-consumer regulation myself.
Saying that the EU is overregulating cannot possibly be that controversial, given that even the European politicians are beginning to admit it.. Draghi, Von der Leyen (even though she passes blame), Merz, Macron.
- the overregulation narrative conflates two different problems
- and that you minimized too much the consumer benefits of EU legislation
I think the overregulation problem olis less that we have 200 EU regulations and we need to hack and slash 100 of them and more that we have 100 national regulations 25 are exact transcriptions of EU directives, 25 are transcriptions with tweaks and the other 50 are national scoped regulations and what we need to do is to make them uniform so that companies don't have to deal with 27x75 problems.
I'm a bit burned by politicians using the overregulation narrative and then not specifying a single example of a meaningfull rule that they would get rid of. Usually what is left in the air is that worker rights and consumer rights should be cut.
That's not even true in the concrete case we're talking about here.
As part of the AI Act, an important decision on a person (such as a hiring decision) cannot be made without human involvement.
You think that's not in favor of "consumers"? (also note the implicitly submissive framing of humans as receptacles for consumption instead of subjects with rights!)
Why shouldn't it be possible to completely automate decisions?
Imaginary entry level job, where you need to deliver parcels from one business to another.
Qualifications: 1. Drivers license. 2: Eyes in your head.
Applicant 1: Drivers license? No. Eyes in your head? Yes.
Applicant 2: Drivers license? Yes. Eyes in your head? Yes.
Reject applicant 1 and accept applicant 2. Ez.
I'd prefer to work at a place that uses it's ressources on things that provide value. If we're able to conserve ressources by automating hiring, I'm all for it.
I don't want to take a pay-cut to hire meat-proxies.
> (48) The extent of the adverse impact caused by the AI system on the fundamental rights protected by the Charter is of particular relevance when classifying an AI system as high risk. Those rights include the right to human dignity, respect for private and family life, protection of personal data, freedom of expression and information, freedom of assembly and of association, the right to non-discrimination, the right to education, consumer protection, workers’ rights, the rights of persons with disabilities, gender equality, intellectual property rights, the right to an effective remedy and to a fair trial, the right of defence and the presumption of innocence, and the right to good administration. [...]
> (57) AI systems used in employment, workers management and access to self-employment, in particular for the recruitment and selection of persons, for making decisions affecting terms of the work-related relationship, promotion and termination of work-related contractual relationships, for allocating tasks on the basis of individual behaviour, personal traits or characteristics and for monitoring or evaluation of persons in work-related contractual relationships,
> should also be classified as high-risk, since those systems may have an appreciable impact on future career prospects, livelihoods of those persons and workers’ rights. Relevant work-related contractual relationships should, in a meaningful manner, involve employees and persons providing services through platforms as referred to in the Commission Work Programme 2021.
> Throughout the recruitment process and in the evaluation, promotion, or retention of persons in work-related contractual relationships, such systems may perpetuate historical patterns of discrimination, for example against women, certain age groups, persons with disabilities, or persons of certain racial or ethnic origins or sexual orientation. AI systems used to monitor the performance and behaviour of such persons may also undermine their fundamental rights to data protection and privacy
I suggest reading the regulation(s), it usually does a good job laying down the reasoning in the preamble.
Markets, left to their own devices, do not end up automatically being competitive in favor of consumers.
But above all, if AI wasn’t hyped as a threat to humanity, to jobs, to security, regulation could have been cautious.
To add insult to injury, given how voters are tired of technology, expecting a different move from governments is a losing bet.