Comment by AnthonyMouse
11 days ago
Proposals like this are how you get the billionaire paying their chauffeur's $50 fines so they can get everywhere faster while sticking some small business owner in an industry with feast or famine years with a $50,000 ticket for having a slightly miscalibrated speedometer.
Creating new arbitrage opportunities benefits the powerful, not the weak.
It is a common complaint that fixed penalties are just the fee the rich get to pay to break the law. Doubly so for big corporations especially when the penalties are less than the gain they got doing the harm.
It sounds like you're implying that it is impossible to create a system that makes penalties scale instead of just being a fee because the system will always be gamed.
Do you believe that or did I misunderstand you?
It's a common complaint but the complaint is ridiculous because the penalties already scale with the scope of the activity. It's typical when you sue a corporation for the penalty for willful violations to be treble damages, i.e. three times the actual damages. If you rip customers off by $10,000 then you pay $30,000. If you're huge and rip customers off by $10 billion then you pay $30 billion.
Whereas the proposal is typically to make the penalties scale with entity size, which a) is actually easier to game than the scope of the harmful activity, and b) does a bunch of things that make no sense, like increasing the amount of the fine for an oil spill if the company also generates additional revenue from producing solar panels.
The reason we run into trouble here usually isn't that the penalties are wrong, it's that the enforcement is weak. If you can steal $10 billion with only a 10% chance of enforcement that requires you to give back $30 billion then your expected value is an $8 billion gain. But that has nothing to do with the scale of the business. The exact same thing happens to with a company that steals $10,000 with only a 10% chance of enforcement.
And using disproportionate penalties doesn't really fix it either, because then they just roll the dice and file for bankruptcy if they encounter enforcement. You can't fine them more money than they actually have. When the rate of enforcement is too low, that isn't enough to make them comply, because a small chance of -100% is profitable against a large chance of +50%. Whereas if enforcement is consistent then disproportionate penalties aren't even necessary.
Penalties are not just to compensate for the harm done but also to incentivize against doing the harm in the first place. This only works if penalties * p(getting convicted) > profit. p(getting convicted) very much depends no the size of the entity so penalties need to be increased accordingly to attain the same deterrent effect.
Being able to game a naive implementation of such scaling is not an argument for not scaling penalties but for designing the concrete implementation to be hard to game and/or applying even higher penalties when someone has been found to try to game the system - which is something that should be done more in general.
We can absolutely make it so that people hiring private chauffeurs share in the liability for breaking traffic laws just like we can absolutely hold CEOs liable for illegal activities done by employees under their purview.
This isn't arbitrage, it's looking for loopholes.
Presumably your "feast or famine" business owner did the responsible thing with leveling their income, no? They didn't? Oh, why would that be the public's concern. That would level out in their feasting years, after all (assuming you're using the previous year's taxable income, or an average income over the previous three years or so).
The chauffeur is subject to the rules around their CDL or similar, or is in service of their employer. When driving a work vehicle, my fines are already directed at my employer.
It blows my mind how much we are willing to bend over backwards to ensure the powerful won't suffer a moment's inconvenience in this country.
> This isn't arbitrage, it's looking for loopholes.
"Have someone who pays the lower amount do the thing" is precisely arbitrage.
> That would level out in their feasting years, after all (assuming you're using the previous year's taxable income, or an average income over the previous three years or so).
Their income for the last three years was $10k, $10k and $1M. Their 20 year average is $80k but the three year average is $340k. So now you're increasing their exposure even more -- before they get a hugely disproportionate fine if it happens to be in the one year they made $1M. Now they still get a disproportionate fine but are exposed to it for three times as long.
> The chauffeur is subject to the rules around their CDL or similar, or is in service of their employer. When driving a work vehicle, my fines are already directed at my employer.
Michael Dell hails a cab and then the driver gets a speeding ticket. No evidence driver had any idea of his passenger's net worth; no evidence the passenger ever requested exceeding the speed limit and couldn't see the speedometer from the back seat. Is this a billion dollar fine? Who pays it, the person who has nothing like a billion dollars or the person who did nothing wrong?
It's clearly unreasonable to impose the fine in that case, but it's also easy to use it for arbitrage if you don't.
> It blows my mind how much we are willing to bend over backwards to ensure the powerful won't suffer a moment's inconvenience in this country.
Maybe we should have a preference for rules that are effective rather than performative.
So long story short: adapt that rule so the beneficiary of the fraudulent service pays the bill. There, I fixed it.
"John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."
Not quite how he phrased it, but close. Original is here: https://wist.info/steinbeck-john/46582/
Ok, how did it work our for countries where it did took root?
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>...Not quite how he phrased it, but close.
The "temporarily embarrassed millionaire" quote is from Ronald Wright. The Steinbeck quote is actually very different than the Ronald Wright quote.
The actual quote is mocking wealthy armchair leftists rather than explaining why the American working class rejected socialism:
>>Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: “After the revolution even we will have more, won’t we, dear?” Then there was another lover of proletarians who used to raise hell with Sunday picnickers on her property. ...
Even flat-out rejecting the desire to charge them more wouldn't be bending over backwards for them. It would simply be charging them based on harm done rather than what affects them.
And the post you're responding to is making a much less extreme position, that it's hard to scale the fine properly.
With laws, you generally want to charge and cover for the harm done, but also to disincentivise law breaking.
For instance, someone might be significantly speeding for 10 years, and never hurting anyone or causing any harm (financial or otherwise). Should they pay nothing?
Or should we distribute harm from all speeders (accidents, injuries and deaths) to everyone speeding?
But does a fixed fee speeding ticket disincentivise behaviour that is known to cause harm statistically?
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So then you outlaw that, too. It is an idea with merit to be refined not rejected outright because you found the one flaw. Under the current system, the wealthy can speed themsleves and pay small fines.