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0 pointskbutler8y ago0 comments

Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term.

Banks, credit card companies, and brokerages all make more money if you make poor financial decisions (fees, interest, and active trading, respectively).

Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period.

Even piano teachers only make money if you continue needing lessons, rather than becoming able to learn on your own.

Hopefully enlightened businesses will follow the model that customer referrals are more scalable than bleeding the money out of any one individual.

0 comments

jMyles8y ago

The incentive structure you are describing is a huge part of the problem in the statist/industrial paradigm of human existence.

Blockchains and smart contracts purport to lift of out of these conditions, but, as you point out, this one seems to suffer from the same flaws.

harrumph8y ago

>The incentive structure you are describing is a huge part of the problem in the statist/industrial paradigm of human existence.

You misspelled "capitalist".

jMyles8y ago

Sure, call it that too. I think that that word is a bit unwiedly in today's political dialogue, because it means something different to everybody.

To some, "capitalist" is an attribute of a society that resist state intervention in economic collaboration. It is equal to the phrase "free market" and viewed with great skepticism.

To others, "capitalist" is more tantamount to greed and cronyism; it is understood in a way that's contrary to traditional anarchic theory about the state.

You might detect that I usually find myself in the second category.

Because of this dichotomy, I like to think of the procession of ages of humankind represented by the dawn of the internet being from "statist/industrial" toward "humanitarian/information-driven".

But you can also certainly think of it as being from "capitalist" to "humanitarian" or whatever may go in that second slot, sure.

1 more reply

nck42228y ago

>Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term.

Which results in unnecessary procedures, and unnecessary prescriptions.

>Banks, credit card companies, and brokerages all make more money if you make poor financial decisions

Which caused the housing crisis and great recession.

>Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period.

Which results in some of the most untrustworthy salespeople in one of the most untrustworthy industries.

All of those industries are regulated by the government, precisely because the incentives are wrong and it causes people to do more harm than good if left unregulated.

wuliwong8y ago

I was able to find a trustworthy mechanic. If they did a poor job or were sabotaging my car when I brought it to them, I would choose another mechanic.

nck42228y ago

My point is those fields need extra regulations because there are incentives that promote unethical behavior, and thus shouldn't be used as examples of why this websites incentives are good business practices. Not that there's no such thing as a trustworthy mechanic.

throwawaydjdo8y ago

HN is ridiculous. If a mechanic sabotages your car, you can sue them... you know, a service provider by the government. But what if your town has only that one mechanic? What if the mechanic is worth billions and bought the other smaller shops just to shut them down? Do keep in mind that sometimes there is no competition, or the incentives are so perverse that competition doesn’t matter. The world isn’t black and white. Despite what Ayn Rand might’ve told you, you can’t just expect competition to fix literally everything.

Hackernews is supposed to have smart people, but the pithy nonsense like the parent I’m responding to makes it abundantly clear that that’s not the case.

dumbfounder8y ago

You aren't making a case for, you are making cases against all these other industries.

losteric8y ago

Those problems also outline a potential business model based on verified long-term reviews.

If a doctor's treatment record and long-term ROI follows them around, or if piano students can track their proficiency over time, the market can act on that information. Without it, we're all flying blind so of course we get suckered into bad exchanges.

It also reflects opportunities for stronger regulations... For example, financial advisor were required to act in the best interest of their customers (until Trump repealed Obama's executive order)

j / k navigate · click thread line to collapse

0 comments

jMyles8y ago

The incentive structure you are describing is a huge part of the problem in the statist/industrial paradigm of human existence.

Blockchains and smart contracts purport to lift of out of these conditions, but, as you point out, this one seems to suffer from the same flaws.

harrumph8y ago

>The incentive structure you are describing is a huge part of the problem in the statist/industrial paradigm of human existence.

You misspelled "capitalist".

jMyles8y ago

Sure, call it that too. I think that that word is a bit unwiedly in today's political dialogue, because it means something different to everybody.

To some, "capitalist" is an attribute of a society that resist state intervention in economic collaboration. It is equal to the phrase "free market" and viewed with great skepticism.

To others, "capitalist" is more tantamount to greed and cronyism; it is understood in a way that's contrary to traditional anarchic theory about the state.

You might detect that I usually find myself in the second category.

Because of this dichotomy, I like to think of the procession of ages of humankind represented by the dawn of the internet being from "statist/industrial" toward "humanitarian/information-driven".

But you can also certainly think of it as being from "capitalist" to "humanitarian" or whatever may go in that second slot, sure.

1 more reply

nck42228y ago

>Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term.

Which results in unnecessary procedures, and unnecessary prescriptions.

>Banks, credit card companies, and brokerages all make more money if you make poor financial decisions

Which caused the housing crisis and great recession.

>Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period.

Which results in some of the most untrustworthy salespeople in one of the most untrustworthy industries.

All of those industries are regulated by the government, precisely because the incentives are wrong and it causes people to do more harm than good if left unregulated.

wuliwong8y ago

I was able to find a trustworthy mechanic. If they did a poor job or were sabotaging my car when I brought it to them, I would choose another mechanic.

nck42228y ago

throwawaydjdo8y ago

Hackernews is supposed to have smart people, but the pithy nonsense like the parent I’m responding to makes it abundantly clear that that’s not the case.

dumbfounder8y ago

You aren't making a case for, you are making cases against all these other industries.

losteric8y ago

Those problems also outline a potential business model based on verified long-term reviews.

It also reflects opportunities for stronger regulations... For example, financial advisor were required to act in the best interest of their customers (until Trump repealed Obama's executive order)

j / k navigate · click thread line to collapse