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Lack of regulation is the main reason for huge success of the web (gq-magazine.co.uk)
94 points by emmanuelory on March 3, 2011 | hide | past | favorite | 47 comments



This is more true than most people realize. The web was inherently hard to regulate from the beginning because a given page could pull in assets from many different states and countries. So regulators basically gave up.

It's quite possible that with a different set of circumstances, the problems of spam, porn, black hat SEO, etc. would have triggered a regulatory response that would likely have massively slowed down the growth of the internet.

Imagine FDA-style, mandatory, centralized, single point of failure, pre-market review of every website for "safety" and "efficacy".

That's insane to contemplate, but a few high profile "Myspace child predator" scare stories at the beginning of the internet could very well have made it happen.

Even the very concept of pre-market review is strange to the internet. Here it's accepted that you launch and figure things out iteratively. Part of the reason is that we're more tolerant of visible crashes in computers than other fields.

However, systematic studies (e.g. http://www.marginalrevolution.com/marginalrevolution/2010/12...) have shown that centralized pre-market review even in areas like healthcare costs more lives and money than it claims to save. [Not to digress too much, but among other things, the lack of an opt-out means the FDA has no incentive to remain competent. There are thousands of schools that certify medical doctors, but only one certification agency for medical devices. The relative lack of innovation in healthcare vs. IT is in nontrivial part due to this stifling regulation; see for example what happens when internet culture collides with FDA culture here: http://mobihealthnews.com/6932/interview-the-iphone-medical-...]


I certainly agree that lack of regulation has helped in the growth of the web and internet. However, I would argue that open standards were even more critical. Email, DNS, TCP/IP, HTML -- Having a common base on which to build new technologies allowed a huge amount of innovation to occur very rapidly.

Imagine the difference if many companies had competing formats for the base technologies. It would be like when railroad companies used different gauges for train tracks. Interoperability would have been a nightmare. Or worse, if a single company invented the tech and demanded royalties -- would the web be what it is if everyone had to pay royalties to use HTML? I believe that the innovations would have occurred eventually in this scenario, it just would have taken a lot longer.


You're right, but this is another case of the same problem.

If one bureaucracy-- government or corporate-- controls it, then it stagnates. Big single choke point equals bad.


"There are thousands of schools that certify medical doctors, but only one certification agency for medical devices."

Somewhat amazingly, there are only 133 schools in the united states that award MDs - https://www.aamc.org/about/medicalschools/


The fact that this is so tightly regulated is directly responsible for the well-known shortage of physicians (especially primary care) in the US.

Here's some data about how the supply of doctors is constrained by law: http://4.bp.blogspot.com/_otfwl2zc6Qc/S8p3XotZRpI/AAAAAAAANQ...

(http://mjperry.blogspot.com/2010/04/medical-school-grads-hav...)

For the last 30 years, only 16,000 new doctors are let through each year, and this is very carefully regulated to keep guild members rich. There's nothing wrong with people getting rich, so long as they don't use the government to secure and maintain their monopoly. This is why state licensing should be abolished.

Unfortunately, it's been this way since the Middle Ages. Does it have to be this way? Not if you decide that people should be free to choose for themselves which expert they should seek medical help from, and what qualifications they require. If you own your own body (and I say you do), this is your right to decide.


Certainly - I don't understand how the AMA gets to enforce a monopoly cartel without the FTC breaking them up...

There should also not be one level of doctor. An MD does little to say if a doctor could perform brain surgery - that's already based on performance metrics (specialty, years working, etc,). You're telling me nurses can't diagnose most diseases a general physician does?

The Nurse Prac movement is great - I wonder how that's been regulated / affecting pay, service costs, etc.


There's probably a middle ground between the current exclusionary system and some guy with a mail-ordered Hard Knocks University degree on his wall being allowed to practice medicine on people.


The solution is freedom.

Freedom means freedom from fraud. So if the guy with a mail-ordered degree lies to someone and says he got a degree from Harvard, causing that person to get "treated" when they would otherwise have gone elsewhere, that's when the government should intervene.

Saving people from themselves is foolhardy, and such efforts are invariably used as tools of repression.


Is this tongue in cheek? The solution is "freedom"? Like get ahold of a whole bunch of powdered freedom and just sprinkle it over the medical industry?

The solution is likely a series of detailed, technocratic tweaks to the accreditation process to allow more schools offer an MD while not allowing Clown College to offer one. I'm an educated guy and I have zero ability to rate a doctor aside from the fact that in order to get the MD there's a uniformly high bar. You're suggesting I should bring a copy of US News and World Report Med School rankings to the doctors' office with me to make sure they don't operate on the wrong knee or something? And if I'm not diligent enough to do that, I deserve whatever happens to me?


When people are left free, they tend to work out effective solutions. In a free society, there would likely be a multiple authorities to judge physician competency. The consumer would get to pick.

A big problem with doctor certification today is that doctors are graded on a boolean scale, pass/fail. So two physicians can both be certified, but one can be vastly better than the other, and you, as a uninformed patient, have little way of judging. A close relative of mine has had an opportunity to assist in many open-heart surgeries performed by several doctors. He tells me that there is a huge difference between surgeons. One surgeon regularly completes operations in 20 minutes with no mistakes and complications, another surgeon, at the same medical center, takes two or three times as long, is much "messier" (cutting things he shouldn't), and his patients have many more complications. It's obvious to everyone in the operating room who is the better doctor, but no one will tell patients. For patients, both doctors are "competent." In free market, presumably there would be at least one rating agency that would provide a more nuanced report on doctors.

Also, to get an MD, there is not a "uniformly high bar," at least there hasn't been in the past. Medical schools discriminate in their entry requirements based on at least race, but possibly other non-competency factors like sexual orientation and parental alumni status. So entering medical students are not held to a uniformly high bar. Once in medical school, student performance diverges. Some students are at the top of their class, others are at the bottom. Some pass the certification exams with high scores, others barely pass after two or three attempts. Most of this information is not readily accessible to the average healthcare consumer.

The primary aim of doctor certification seems to be to restrict the supply so as to keep wages high, not to help consumers choose. The best solution really is freedom, not mere "detailed technocratic tweaks" to a system designed from the bottom-up to protect the interests of the medical profession against competition.


Why can't we have both? There's no regulation on rating doctors at the present and it seems to me like the fact that there aren't a dearth of patient/consumer ratings of doctors already precludes your assertion that if we stop requiring certification that many will suddenly spring up.

There's also the problem that medical care is an inherently non-free market. If I'm bleeding to death, I don't have time to search the BBB's ratings on a hospital and decide which emergency room I'd prefer. The same is true for pricing: If I'm dying my demand for service is going to be irrespective of it's price.

Regulation is a critical component in the medical industry, in my opinion.


Look, empty platitudes like "more freedom" are never the answer, unless the question is, "how do we sell people on something so crazy that they'd never agree with it otherwise, like for example, 'giving jbooth and dpatru the ability to sell a MD degree for 5 bucks on the street corner'"?

You may as well say the solution to the medical credentialiing problem is pancakes.

There was a point in time where you didn't require a government certified authority to give you the title of doctor. People decided to start certifying. For obvious reasons.


There was also a time you did not need a government issued ID to get on a plane. That also changed, for obvious reasons, but not necessarily good ones. Fear of the unknown is not equivalent to rationality.

The worst government policies are those where "concerned mother" (= Democrat) and "stern dad" (= Republican) stand shoulder to shoulder to protect you from yourself. Millions of people are in regular contact with that sort of "stern + concerned" thing in the form of the TSA, but other agencies are no less Kafkaesque (more so in fact given that they are operating in comparative darkness).

You can stand on a street corner and call yourself a programmer willing to work for $5. Or for zero. That doesn't mean that GE will hire you to write the code for their next X-ray machine. Distributed intelligence is much smarter, and centralized evaluation much dumber, than many believe.


It comes down to a basic philosophical difference: centralized or decentralized?

Every single other product we use -- including things like cars/motorbikes, with a direct impact on your health -- we read reviews, ratings, and reports before purchasing. We allow people to set their own risk dial, whether that be a motorbike or a Volvo.

Indeed, the whole point of sites like Metacritic or Amazon's review section is that any particular review could be in error, but the sum total provides signal. Not perfect, but provably better than selecting a few people at random and keeping the product from the market unless they all agree.

And this extends to medical procedures too. Of course I will research hospitals before having that kidney transplant. Cedars Sinai has a good reputation; I don't need 13 years of medicine to know that it's good, anymore than I need to know how to direct a film to appreciate a movie. Because there are many other sources of reputation checks other than government: search engines, your friends, books, newspapers, etc. Good word of mouth about a device or doctor usually reflects technical merit, and when it does not, it is unlikely that a single bureaucrat will uncover that which has fooled the world. Bureaucrats go with public opinion, they do not buck it.

Moreover, every other area of life, we accept that products will suit some and not others. There is no accounting for taste, as the saying goes.

Medicines and treatments show just as much interpersonal variation as nutrients; indeed, many of them are simply refined nutrients. Yet we expect a centralized system to account for something inherently individualized. Little known fact: many arthritics wept when Vioxx was taken off the market, because it worked for them.

Why not let these people have their choice? Cancer patients cannot opt out of the FDA to take experimental drugs (the FDA actually sued to keep it this way!). And sometimes the crazies are actually right and the government is way wrong, like low fat vs. low carb.

The bottom line is that centralization of assessment in a fast-moving, technical area is going to be provably worse than peer review. Make the FDA opt-in rather than mandqtory and let the decentralized network of doctors be the ultimate judge. That's how Europe does it.


There are plenty of engineers without degrees that have worked on mission critical pieces of software in medicine (and automobiles, etc.). Is the MRI code really substantively different from the physician from a systems perspective?

Basically, a paper credential in a fast moving field demonstrates relatively little. And the whole decade long system of medical education (undergrad, grad, residency, fellowship) is far from efficient.


Engineers work with QA departments and in the vast majority cases the worst thing from a screwup is the company loses some money.

Doctors work on human beings.


> Somewhat amazingly, there are only 133 schools in the united states that award MDs

As well as 26 schools that award DOs, a degree equivalent to MD in all 50 states - http://www.aacom.org/people/colleges/pages/default.aspx


I was also thinking of foreign medical schools; graduates of those schools make up a considerable portion of doctors and dentists in the US. But granting that it's more accurate to say "hundreds" rather than "thousands", the substantive point is that total centralization is not necessary to ensure quality of medical care.


Absolutely. Regulation can kill an emerging industry in its infancy. But, now I wonder - is that assumption still true? The internet has been mainstream (and I use the word loosely) for the last 10 years or so. Hell, I'm in my mid-20s and I remember using Internet when I was eight (hi Prodigy...haven't seen you around in a while!).

I was wondering if the internet has become so widespread that some regulation (but very little, since it is indeed very difficult to regulate). For example, last October, Congress passed the 21st Centry Video Accessibility Act, which among other things, requires pass-through captioning for videos on the internet (http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db1207...).

I'm undecided on the matter. More than any other industries, internet-based companies seem to respond to privacy and security concerns. Of course, the issue is that there are usually big screw-ups inspire such responses, such as leaking personal data by mistake.

Well, I do think some regulation is inevitable though - considering how important the internet is becoming. Once something becomes crucial to a segment of America's economy, the government wants to step in and protect people's interests (or at least what they perceive to be people's interests). I would prefer such regulation be limited to requiring open standards/access and net neutrality.


An analogous story I heard (and it could just be a rumor) was that such lack of regulation was also why the movie industry took off in LA.

The story goes that Edison had lots of patents on movie-related tech, and wanted to squeeze the movie makers and control them; so the movie makers ran off to the furthest place possible from NY (where Edison was), i.e., Los Angeles, CA. There they were free to operate without Edison and regulations.


To add a tidbit to that, a journalism professor in college taught that Hollywood become the dominant film production locale because World War I decimated film industries in Europe.


I would love to hear more about this if you can find a source...


This is perhaps the most readable book on the founding of Hollywood. http://www.amazon.com/Empire-Their-Own-Invented-Hollywood/dp...

As the subtitle indicates, it has a particular focus on the early Jewish players in the movie business, but it covers all aspects along the way.

As for the decimation of the European industry, that really happened more in WWII than WWI. There's a good documentary mini-series on the early days of the Euro-industry, which ends with the WWII decline.

http://www.amazon.com/Cinema-Europe-Hollywood-Kenneth-Branag...

Apparently out of print now, but worth watching if you can find it.


Thanks to your question, I did some googling and found this article, titled "La-la land: the origins" : http://www.nytimes.com/2005/08/21/weekinreview/21basics.html

He write, "Los Angeles's distance from New York was also comforting to independent film producers, making it easier for them to avoid being harassed or sued by the Motion Picture Patents Company, a k a the Trust, which Thomas Edison helped create in 1909. The Trust, which included the dominant producers, distributor and film stock manufacturer, was intended to monopolize the entire industry. "


I’ve never heard a politician speak/write in such bullshit-free terms (i.e. plain English). I suppose that’s why he’s “minister for culture, communications and creative industries”.


I actually think he is deliberately unclear. That's based on previous statements he has made, plus the tendency of other politicians to give false definitions of net neutrality.

You or I might think that this statement of his:

"My view on net neutrality is pretty simple: if it ain't broke, don't fix it. I want an open internet, with a few simple guarantees - that everyone should be able to access any legal content they want; that there should be no discrimination against content providers on the basis of commercial rivalry;"

...is a perfect quick description of net neutrality. But you'll notice he doesn't say that is net neutrality. He says things like "Supporting net neutrality means supporting unfettered access to the web for everyone. But there's a problem here." and "The self-appointed defenders of the internet... are now actually calling on governments to regulate in order to guarantee net neutrality, or at least their version of it."

He's dissembling. Their version of NN is the version of NN. It's the same version he earlier said he supported. And this isn't the first time the minister for communications has had to try and clarify his statements: http://www.theinquirer.net/inquirer/news/1899719/ed-vaizey-s...

I'm really amazed at the pure Orwellian doublespeak that goes on when politicians discuss NN. "I don't support net neutrality, I think instead we should [do exactly what net neutrality calls for]."


Bullshit-free is in the eye of the beholder. For example I didn't see him mention anywhere in his plain English that the approach he advocates leads to discrimination and favors large corporate interests against small businesses.


I actually did a double-take when I got to the end and saw the byline (I hadn't noticed the one at the top). If I hadn't read it, I never would have thought it was written by a politician (and minister in the current government).


The web works unregulated because (other than people in some countries), it is the client, the consumer who is utterly free to do what they want.

This model does not apply to the real world, for instance -- if someone online sees a site and thinks that it is terrible, there is far less overhead to setting up an alternative.

Banks, telecoms, energy -- all this has to be regulated because the markets are there such that there are monopolies, people are locked in, and providing an alternative can be exceptionally difficult.

The market is only as free as the consumer.

Net-neutrality ensures that freedom. If they were to allow companies to fast-track their sites, that essentially makes the market less free because it is a barrier to competition, which gives way to monopolies.

Finally, the web isn't entirely unregulated, just the small bits of regulation that there are, are very important in protecting the freedoms of the consumer.


You have failed to distinguish between economic and political power.

Economic power is earned justly (by offering better/more efficient/lower priced goods and services), and monopolies obtained and maintained this way are desirable. They lose market share only when company stops being virtuous.

Political power, on the other hand, is always wielded unjustly. An example of this is when someone tries to get the government to make a law that hurts their competitors, but leaves them unscathed. This happens all the time. (And it explains why we license professionals, and support food cartels, etc.) These kinds of laws are always sold to the public as measures designed to protect them, when in reality they are just there to keep GE and the like in power. Antitrust regulations fall on this side, too.

Entities with political power are protected by the government's (legitimate) monopoly on the use of force. If they're not virtuous, the govenment is there to maintain their unearned monopoly. Like any corruption, this harms living standards and progress.

So that's why you have to distinguish between the two cases. If you don't, you're implicitly advocating policies that punish the good for being the good. The political solution is to separate the state and economics, just like we separate the state and church.


Economic power is earned justly (by offering better/more efficient/lower priced goods and services),

This often happens justly. It doesn't always happen justly. For example, sometimes buying from merchant A is "more efficient" because merchant A has defacto dictatorial power and a variety of ways of making your life miserable if you buy from anyone else.

and monopolies obtained and maintained this way are desirable.

I am dealing with a monopoly based on the political power of a certain local music venue owner. If the free market were in operation in this case, amateur musicians of a certain local music scene would play jam sessions at an entirely different pub for a number of reasons. We are somewhat held hostage at our current venue, because of our friendships with professional musicians. None of us dare start a session inside the loop because of the political fallout. So we put up with the barman who doesn't care for us, his turning the stage lights on us until we sweat (it's not a paid gig, for heaven's sake!) and the utter inattention, ignorance, and apathy of the crowd. Our particular town's instance of this particular music scene suffers artistically for this, as better musicians don't show up, and some talented out of town musicians don't want to join in.

They lose market share only when company stops being virtuous.

Sometimes a company stops being virtuous, and keeps market share.


Hostage? You can't use that word in this context because it means that someone is committing a crime. (And if that were the case, you would be talking to the police about it!)

If you don't like what the owner of a certain venue is doing, you're free (somewhat - the government collects taxes and does other immoral things that limit everyone's freedom) to try to open a competing venue, where you make the rules.

Also, to use the phrase "political fallout" when you're not talking about the government is confusing as hell. Relationships with family and friends do not qualify as political if we are to have a sensible discussion about this.


Hostage? You can't use that word

You're entitled to your opinion. It works like this: certain of our friends are afraid that if we started another session, they'd never get another gig again or soundboard job again, which would be a significant chunk of their income.

Also, to use the phrase "political fallout" when you're not talking about the government is confusing as hell.

That's either crazy talk, or a deliberate troll. There's definitely workplace politics in groups of musicians. Somehow, I am unconcerned about you in particular being confused.


You're entitled to your opinion. It works like this: certain of our friends are afraid that if we started another session, they'd never get another gig again or soundboard job again, which would be a significant chunk of their income.

Losing your current job is a lot less scary than losing your life.


It's a figure of speech.


Sometimes a company stops being virtuous, and keeps market share.

Only with the government's assistance.


> Economic power is earned justly (by offering better/more efficient/lower priced goods and services), and monopolies obtained and maintained this way are desirable.

Or by stomping on heads of competitors, fleecing existing customers to boost new customers, locking people into nasty contracts, bullying others out of the market, utilising less ethical means to undercut the competition, paying your employees lower, offering an inferior product with better marketing, going to the right school and having the right mates and getting contracts for things despite offering less for more.

I know in happy startup land there are lots of wonderful companies that are living the dream and doing it in a nice way, but if you think what's best for a company is great for everyone else, I'd have to disagree.

It's nice to think that the business world is a meritocracy but that simply isn't true.


No way - improper flower growing is a real danger from unlicensed florists! ;-)


The industries in the US that are in the deepest trouble are:

1. financial 2. health care 3. education

Is it a coincidence that they are the ones with the heaviest regulation and government involvement?

Contrast that with the computer industry, which is pretty much unregulated. We have fantastic innovation, progress, price reductions, etc.


The lack of corporate influence / manipulation during it's birth. Which is really saying same thing as lack of regulation since most regulation originates with incumbent corporate interests trying to lock in "cartels/monopolies", lock out any new competition, and gobble up as much public money as possible.


A minor note, but is this accurate?

In America, this is a massive issue, because there are only two main ISPs, and so a lack of choice and competition.

Which two? I can name a handful of companies that provide internet access (Time Warner, Cablevision, Cox, Verizon, etc) but perhaps they aren't "major".


I wouldn't call it accurate.

Generally there are two major providers in a area that have saturation marketing.

Then you have CLECs and independent ISPs. They tend to focus on direct sales to business so the public isn't as aware of their existence. Typically you'll have 3-5 of these in a market.

After that you have the mobile data providers (Sprint, Verizon, AT&T, Cricket, Clearwire).


In any given locale, there are usually only 1-3 choices of ISP.

Two is most common, so they can give illusion of competition, without having to coordinate with too many "competitors".


Compared to the Netherlands, it is pretty accurate. Where I live I can choose from more than 10 ISPs (both cable/ADSL), and then there are several mobile providers. Compared to here, the telecom market in the USA is pretty much monopolized.


Mostly true.

However, recently there's been a lot of smaller wireless, usually operating with Motorola Canopy systems, popping up. They are still dependent on a larger ISP though.


I'd argue that the commercial Internet is too young to be regulated. Regulation is a reactive force and there really hasn't been much to react to, yet. Sure there's issues with spam and porn, but neither of those industries are heavily regulated to begin with.


On the flip side, the web has been hindered by software patents. Photo and video compression would be much better. The dominant algorithm for general web compression encoding, gzip, was chosen not because it compresses best, but because it appears to have steered clear of patents.




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