We both agree that clear-cut cases of causing harm (e.g. toxic sludge dumping) have to be regulated. I suggest we call this ‘basic level of regulation’ and I want to try to better define it.

Unambiguous: We could start by identifying areas (e.g. direct environmental damage, outright financial fraud) that we would both agree require regulation and regulation is fairly clear-case and unambiguous. If we were to compile extensive list of all such cases and compared to the list of all existing regulation it would be easy to see that our list (unambiguous regulation that we agree on) is tiny minority of all regulation, it also not a complete list of all regulation we agree on. This is where I’d draw ‘basic level of regulation’ line if we are interested in generalizing our discussion past our present company.

Not-so-clear: We then can identify other areas (e.g. food labeling, minors & smoking) that while we agree on, are far from being clear-case or non-controversial. Out of this list some of this regulation requires expert opinion and/or scientific consensus, and we chose to defer to such opinions.

Controversial: By far largest segment of regulation would be at least somewhat controversial. We might disagree, form informed or ideological opinion and/or later change our minds about it. One examples of such controversial regulation would be net neutrality.

Harmful legislature: Last but not least, we can find some regulation that we both oppose. I specifically list this point to inform you that I have revised my earlier stance on “more regulation is always good”. I now acknowledge that harm of bad regulation can be greater than even uncontrolled corporate irresponsibility.



Now that I categorized all types of legislature, identified sections that most would agree with, let us try to determine the level of regulation that is needed to effectively govern.

Immediate conclusions are:

a. ‘Basic level of regulation’ is not sufficient, this can be demonstrated by finding examples of not-so-clear regulation that we agree on.

b. ‘Harmful legislature’ exists

c. ‘Not-so-clear’ and ‘Controversial’ segments do not have clear functional distinction.

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Free market dictating corporate behavior via supply/demand implies rational and informed consumer. In post-industrial economy, access to information is/coupled with wealth. I think idea that anything less that "pain points" will get resolved via market forces is flawed, because it is based on assumption of perfectly informed actors. More accurate functional description is that low-information consumer actions are driven by information-gatekeepers (see FOX News). Good example of disinformation wars in consumer behavior is smoking/anti-smoking regulation, tobacco companies actively employed disinformation to prevent consumers of making educated decisions about tobacco use. My argument is that without heavy regulation a lot of consumer-driven economy will turn into FUD wars.

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"Greater good" (this can include operating in self interest, as long as you do not harm) should be used as a standard because this is the only way to ensure society overall moves ahead. If results of your activity are net-loss for society (e.g. sub prime mortgage securitization) then not only you are harming overall progress, you are offloading risks for your activity on others. Especially in a 'less regulation' environment you describe you cannot assume that all injured parties will be able to seek full redress. If not everyone is made whole, then harmful activity can become profitable.

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