What happens to regulatory capture? I don't disagree with Prof Cochrane's sentiment. How does the playing field look so innovative companies can enter and compete? I think this extends to individuals. Why should individuals be locked out of investing in certain types of entities or investments purely because they don't have the required net worth as deemed by the IRS?
A very enjoyable article to read this fine morning, goes well with my morning coffee. Just an old hermit, but I don't have allot if faith in our government and their regulations! Just seem contrary to common sense. Thank-you Professor Cochrane, excellent writing. (Of course this is just the humble opinion an old retired sailor. )
Are you suggesting that the grifting politicians should unilaterally disarm? Where’s the incentive for that? Even if it were (is?) the will of the electorate, it seems they’re unmotivated.
The electorate gets a few votes every two or four years for one of two choices, at best. What exactly do you think the electorate should be motivated to do?
The simplest fix I can think of is entirely unfeasible. Let anyone pay for a jury of 12 random voters to challenge any law or regulation. Isolate them in separate rooms with a pad of paper, a pen (nothing erasable), the law or regulation, and a dictionary. They write down their summary of what the law or regulation does. Compare all 12. If more than 1 or 2 disagree, the law or regulation is voided for being unclear to the people who are expected to obey it.
Not appealable. No one explaining anything to the jurors, especially government lawyers.
In other words, give We, the People, a veto.
Of course it will never happen. Of course there would be squabbles over "random" and "disagree". But I can't think of any other way for We, the People, to keep government under control.
Starting around 1940, the economics profession began to venerate JM Keynes and dispense with Joseph Schumpter. Big mistake. Admittedly, it was partly Schumpeter's own fault; he was the doctoral advisor for Paul Samuelson, James Tobin, Hyman Minsky and a number of other 1960's celebrity micro managers.
Almost a century ago, on page 95 of his deeply prophetic masterpiece "Capitalism, Socialism, and Democracy" Schumpeter wrote about anti-trust, "The important thing is not the number of firms competing in an industry, but the ease with which competitor firms can enter the industry." He believed that true monopoly was extremely rare and that the frequent transitory monopolies that arose generally did more good than harm. He was not a slave to equilibrium.
For anyone interested, here is an annotated outline of "CSD."
Below is what I consider to be one of Schumpeter’s most profound insights. It could only have been perceived by that rare economist who actually understood business, not by a pure academic, I don't know many of today's economists who would qualify.
"Competition acts even when it is merely an ever-present threat. It disciplines before it attacks”.
He is saying that the main thing that motivates entrepreneurs is a fear of failure that amounts to abject terror. Keynes’ “radical uncertainty” does not only apply to the future, but also to the competition. One never knows what the competition is up to. As Andy Grove, co-founder of Intel, understood (and every entrepreneur knows), “Only the paranoid survive.”
This also showcases one of my own perennial gripes, that too many people reflexively turn to government for "solutions" which are nothing of the sort, and it never occurs to them to even wonder if government has any business in that particular line of meddling in the first place.
Some statist once called me a liar and fantasist (my paraphrasing) for thinking that roads, dams, airports, power plants, and other infrastructure used to be built as private endeavors.
When Dr(?) Snow found cholera came from one specific water source in London in 1854, it was one of three private fresh water utilities in London, all with their own pipes.
The pre-1775 colonists were forbidden from using English currency. They used Spanish, French, Dutch, and whatever national currency they could get their hands on, along with wampum, tobacco, and other commodites.
American banks pre-Civil War issued their own bank notes and had few problems. They were so well-liked that Lincoln had to tax them out of existence in order to make the public accept greenbacks to finance the war.
Those people had no calculators, very slow communications, and made everything work. Government regulation is vastly overrated.
"End the permit state. End the means of political extortion. Any company should be able to buy any other company."
100%
btw, I doubt the SEC has much to do with it. This looks like FTC, DOJ Antitrust Division and FCC all the way
there is a reason people crawl over broken glass for election to an office that doesn't pay well and there is a reason Harvard and Yale Law grads with lots of student loan debt elbow each other out for a GS-11 government job
it's mafia without the good Italian comfort food and rolls and canoli
"End the permit state. End the means of political extortion. Any company should be able to buy any other company."
100%
there is a reason people crawl over broken glass for election to an office that doesn't pay well and there is a reason Harvard and Yale Law grads with lots of student loan debt elbow each out for a GS-11 government job
It's mafia without the good Italian comfort food and canoli
"End the Permit State." Pithy and Perfect. Permits create incentives. Incentives matter.
“End the permit state. End the means of political extortion. Any company should be able to buy any other company.”
You’re sounding like a libertarian!
Thank you, Daniel.
What happens to regulatory capture? I don't disagree with Prof Cochrane's sentiment. How does the playing field look so innovative companies can enter and compete? I think this extends to individuals. Why should individuals be locked out of investing in certain types of entities or investments purely because they don't have the required net worth as deemed by the IRS?
A very enjoyable article to read this fine morning, goes well with my morning coffee. Just an old hermit, but I don't have allot if faith in our government and their regulations! Just seem contrary to common sense. Thank-you Professor Cochrane, excellent writing. (Of course this is just the humble opinion an old retired sailor. )
From one old hermit to another: I hope the wind is always at your back
Some are claiming that the Ellison’s purchase of Paramount and the group purchasing TikTok as Zionist efforts to suppress anti-Israel sentiment.
Are you suggesting that the grifting politicians should unilaterally disarm? Where’s the incentive for that? Even if it were (is?) the will of the electorate, it seems they’re unmotivated.
The electorate gets a few votes every two or four years for one of two choices, at best. What exactly do you think the electorate should be motivated to do?
The simplest fix I can think of is entirely unfeasible. Let anyone pay for a jury of 12 random voters to challenge any law or regulation. Isolate them in separate rooms with a pad of paper, a pen (nothing erasable), the law or regulation, and a dictionary. They write down their summary of what the law or regulation does. Compare all 12. If more than 1 or 2 disagree, the law or regulation is voided for being unclear to the people who are expected to obey it.
Not appealable. No one explaining anything to the jurors, especially government lawyers.
In other words, give We, the People, a veto.
Of course it will never happen. Of course there would be squabbles over "random" and "disagree". But I can't think of any other way for We, the People, to keep government under control.
Good article. One minor fix: traditionally, the antitrust division of the justice dept does media mergers, not the FTC
DC is where crony capitalism and industrial policy meet!
Starting around 1940, the economics profession began to venerate JM Keynes and dispense with Joseph Schumpter. Big mistake. Admittedly, it was partly Schumpeter's own fault; he was the doctoral advisor for Paul Samuelson, James Tobin, Hyman Minsky and a number of other 1960's celebrity micro managers.
Almost a century ago, on page 95 of his deeply prophetic masterpiece "Capitalism, Socialism, and Democracy" Schumpeter wrote about anti-trust, "The important thing is not the number of firms competing in an industry, but the ease with which competitor firms can enter the industry." He believed that true monopoly was extremely rare and that the frequent transitory monopolies that arose generally did more good than harm. He was not a slave to equilibrium.
For anyone interested, here is an annotated outline of "CSD."
https://charles72f.substack.com/p/schumpeter-in-a-nutshell
Below is what I consider to be one of Schumpeter’s most profound insights. It could only have been perceived by that rare economist who actually understood business, not by a pure academic, I don't know many of today's economists who would qualify.
"Competition acts even when it is merely an ever-present threat. It disciplines before it attacks”.
He is saying that the main thing that motivates entrepreneurs is a fear of failure that amounts to abject terror. Keynes’ “radical uncertainty” does not only apply to the future, but also to the competition. One never knows what the competition is up to. As Andy Grove, co-founder of Intel, understood (and every entrepreneur knows), “Only the paranoid survive.”
This also showcases one of my own perennial gripes, that too many people reflexively turn to government for "solutions" which are nothing of the sort, and it never occurs to them to even wonder if government has any business in that particular line of meddling in the first place.
Some statist once called me a liar and fantasist (my paraphrasing) for thinking that roads, dams, airports, power plants, and other infrastructure used to be built as private endeavors.
When Dr(?) Snow found cholera came from one specific water source in London in 1854, it was one of three private fresh water utilities in London, all with their own pipes.
The pre-1775 colonists were forbidden from using English currency. They used Spanish, French, Dutch, and whatever national currency they could get their hands on, along with wampum, tobacco, and other commodites.
American banks pre-Civil War issued their own bank notes and had few problems. They were so well-liked that Lincoln had to tax them out of existence in order to make the public accept greenbacks to finance the war.
Those people had no calculators, very slow communications, and made everything work. Government regulation is vastly overrated.
This administration has not only pulled back the curtain on massive corruption, they have taken it to a much higher level.
We are no longer a democratic republic.
Throw the rascals out and change some laws!
"End the permit state. End the means of political extortion. Any company should be able to buy any other company."
100%
btw, I doubt the SEC has much to do with it. This looks like FTC, DOJ Antitrust Division and FCC all the way
there is a reason people crawl over broken glass for election to an office that doesn't pay well and there is a reason Harvard and Yale Law grads with lots of student loan debt elbow each other out for a GS-11 government job
it's mafia without the good Italian comfort food and rolls and canoli
"End the permit state. End the means of political extortion. Any company should be able to buy any other company."
100%
there is a reason people crawl over broken glass for election to an office that doesn't pay well and there is a reason Harvard and Yale Law grads with lots of student loan debt elbow each out for a GS-11 government job
It's mafia without the good Italian comfort food and canoli
very likely the SEC has little to do with this
more likely it is entirely the FTC, the DOJ Antitrust Division, and FCC
and the sin of pride
that has a leading role, but it's behind the scenes
actually it's all the seven deadly sins, except gluttony, which actually seems like it ought to be demoted to a lesser sin
who among us hasn't over-eaten?
But, Professor, if we “end the permit state”, home prices would crater in the posh neighborhoods of the DC Metro (and in various state capitals).
Any serious attempt to eliminate the regulatory agencies that make political extortion possible will fail. The agencies will come back stronger.
Preach it, brother! I was already convinced, but maybe you’ll bring the light to others.