Re: [unrev-II] Mike T. & Eric A.

From: Eric Armstrong (
Date: Mon Jan 24 2000 - 00:21:08 PST

From: "Eric Armstrong" <>

  ----- Original Message -----
  From: John "sb" Werneken
  To: Stanford Bootsrap ToPOst
  Sent: Saturday, January 22, 2000 11:48 PM
  Subject: [unrev-II] Mike T. & Eric A.

  From: "John \"sb\" Werneken" <>

  Eric: I agree with your post about business organizations being unmotivated to invest in "C" and being pretty spotty about "B" as well. I've had the same experience. I disagree with your conclusions about the remedial power of government, however. By straining top-level government decisions through the filter of getting those top-level officials elected, I believe enormous information gets lost, never to be recaptured (in contrast to market-driven decisions.
That the solution is 100% ideal, I grant. Case in point: Current MBTE fiasco.
  * Government wants clean air. Mandates "more oxygen in gasoline".
  * Industry can't find any *inexpensive* way to do, except by using MBTE.
  * MBTE is *highly* water soluble, and underground gas storage tanks leak.
    Both facts were known 20 years ago.
  * Oil industry knows these facts, but cares not -- profit is king.
  * Government does *not* know (or pretends ignorance) and does *not*
     either outlaw MBTE as an additive or require studies of its effects.
  * Basically no studies have been done to find out what the effect of this
     additive will be when it is ingested. But it smells funny, tastes funny,
     and it's a gasoline additive. So prospects are not good.
  * It is now IN the drinking water in 7 states, and on it's way to the aquifers
    in every other.
  * Congress is *still* unable to pass a law outlawing it, two years after all
     this information comes out -- undoubtedly the result of pressure from
     the friendly oil industry.

So, does the system work? Not really well. Here we have a law passed,
probably to achieve a political goal, regardless of the science. We have an
industry using a potentially harmful, totally untested additive, because it's
cheap and it does the job, regardless of the science. No one oil company
will stop using, because of competitive pressure from all the others. And
the political process can't stop it until it becomes lethal, because doing so
would have an enormous on big bottom lines.

So, the system is horribly flawed. Maybe tragically flawed. But the operation
of that system *does* have an impact. Policy decisions have real world
effects, and there is *always* some policy-making body. The issue, then,
is what kind of policy-making body has the most benign, and hopefully
beneficial, effects.

The two flaws in the system we have today are:
   * Policy making too heavily influenced by money interests
   * Policy making too interested in short term results regardless of
     long term consequences in order to keep popular favor.

Unfortunately, I have no alternative to offer. It is quite possible, though, that
without one, it is only a matter of time before one of these issues does us
in, leaving us with no further opportunity to address any other issues.

Don't get me wrong. I'm in favor of a "free" market. But it's clear that a "free"
market requires regulation. The robber barrons, Appalachian "company
towns", and general disdain for human welfare displayed by industry, tobacco
companies, food producers, the oil industry, and direct-mail scam artists
attest beautifully to the fact that ethically-impaired individuals require
external regulation to keep from harming others.

Given that regulation of some kind is a necessity, and the regulatory policies
affect economies, the only important question is how best to arrange the
regulations so that individuals and corporations, acting in their own best
interest, will invent, create, and promote the technologies which will have the
greatest positive impact, with minimal negative consequences.

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