The Most Dangerous Monopoly: When Caution Kills

All this want insurance that the things we
buy are safe. What is the best way for us to get it? One way is to have a government agency assess
products and allow or forbid their sale. This is the way it works for medicines. The food and drug administration requires
and oversees lengthy expensive tests of each new drug. Based on those tests it decides whether or
not that drug maybe used. A different approach is to allow competing
private firms to assess the products and give each one a rating. Customers decide for themselves whether to
buy or not based on these ratings. This is the way it works for thousands of
products from toasters and hair dryers to installation and bullet proof vests. Manufacturers hire a private certification
firm such as underwriter’s laboratories to evaluate their products design and manufacturing
process and to test it. If the product passes the certifier’s logo
is added to it. Manufacturers pay for private certification
because it increases sales. The customers who see the logo know that the
product is passed rigorous safety tests and they are more likely to buy it as a result. Stores also value assurances of product safety. They don’t want unhappy customers or law
suits from selling things that turn out to be harmful. So they will pay extra to stock certified
products. Certification firm such as underwriter’s laboratories
have no monopoly. They have competitors. Accordingly they have a strong incentive to
be cautious but also fast and affordable for manufacturers. On the one hand they depend on their reputations
for trustworthiness built up over the years. A certifier who puts it’s logo on a product
that turns out to be dangerous ends up with a damaged reputation and a higher likelihood
that manufacturers will use a competing certifier in the future. On the other hand if a certifier is over cautious
and takes a long time on costly extra testing that delays a product from getting to market
or if it refuses to certify a product that turns out to be safe again it will loose customers. Self interest pushes these competing certifiers
to avoid both kinds of mistakes neither certifying dangerous products nor refusing to certify
safe ones. Compare this to a government agency that has
a monopoly on deciding whether a good becomes available. Its incentives are very different. What happens when such an agency approves
a dangerous product that ends up causing harm? There are serious consequences for the careers
of the officials who let that happen. As a result they become excessibly cautious. They take so long on costly extra testing
that they do delay products from getting to market. When the product is a life saving medicine
people die who could have been saved. Unlike a voluntary certification firm a monopoly
government agency faces no check on this kind of caution. If the agency rejects a product that is safe
or takes years for additional tests the manufacturer cannot turn to another certifier. No other certifiers are permitted. The government agency doesn’t have to worry
about losing revenue or going out of business because it is funded by taxation and not by
the voluntary payments of its manufacturer or customers. How much safety is the right amount? It is always possible to test a product one
more time before selling it but the test costs time and resources to run so the more the
rigorous the safety testing procedures the more manufacturer must charge to cover its
costs and the less money it has to invest in new products. Who should decide at what point the cost of
more tests becomes too high? Under monopolized government safety regulation
government officials decide. Under voluntary certification in a free market
everyone decides for him or herself usually with the help of certification agencies and
professionals such as doctors and pharmacists who make it their business to learn all they
can about the products they advise us to use. Instead of the one size fits all approach
in which the government bans all products that fail to meet arbitrarily determined criteria. The market process creates and communicates
various assurances of product safety and each buyer decides for him or herself.

100 comments

  1. "How much safety is the right amount?"  Well, how many deaths/injuries are the right amount?  Private firms are in business to make money.  Not to certify goods, not to protect people, but to make money.  They have to look for a balance of how much business they can get in by being fast and how much they stand to lose by certifying dubious product.  This means that there is a point where there IS an "acceptable" number of deaths/injuries.  A government agency doesn't have to have such a balance.  The argument they try to make against the government agency is almost an argument FOR the government agency.  The government agency has all the time in the world to pick over a product?  Good!  The government agency isn't financially beholden to the manufacturer?  Good!  When you have something you want certified, the certification needs to be done by a third party with no financial interest.  

  2. Disagree with video……with globalization it easy to get cheap and unsafe products onto the market. Once the products get a bad name, the owners can just shut up the company and begin a new company…..it very easy too do this

  3. Hey Guys,
    This is how it works for financial products with companies like Standard and Poors, moodys etc rating financial products, but they do a shocking job. 
    Despite having made massive mistakes several times they continue to be popular and used by governments and businesses alike. 
    What are your thoughts on this?
    Cheers,
    Ben

  4. Yeah I thought the free market system for quality control was great too. Then the three major private credit rating agencies(S&P, Moody's, and Fitch Group) gave triple A ratings to the investments that led to the great recession. Turns out when the manufacturer pays the rating agency, the agencies has a huge incentive to give top payers good ratings. Otherwise the manufacturer will go to another agency. When the pay is high enough, private safety regulators will always disregard their reputations.

    If you have something to debunk this argument I'll gladly hear it. I was a passionate free market supporter until 2008.

  5. You have to be very naive to think that any Government is going to be an all-seeing impartial judge that will protect us without accepting bribes in order to get themselves rich. However, you are equally naive (and/or blind) if you think that in a free market the quality of all products will be warranted simply by having customers critically judging independent quality controls. The truth is, with either system, someone somewhere will try to make more money out of the situation, and reports will be altered to "prove" that a particular product to be sold is wonderful for your health (regardless of whether this is true or not). If a product is going to cause health problems within 20-30 years time, the Government is as useless as usual, but the "free market" alternative will screw you too anyway. While I favour the monopoly-free alternative, it is FAR from being the ideal solution to all our problems. These ideas about the beauty of free markets appear to ignore the influence of all modern mass manipulation through advertising, rendering the whole idea of "the majority knows better" useless. of course, having a corrupt Government can be equally bad, if not worse.

  6. double edged sword , don't want a buyer beware on drugs.
    don't want drugs to take years if it is all natural.
    don't want someone to tell me that I can't have something that is all natural, because it might harm me. when there isn't any proof of it 

  7. There is no such thing as being excessively cautious when it comes to peoples health. I do not agree with you guys at all.

  8. UL has "competitors"? really…? WHO?

    If you go to an appliance store, you'll see certification from NO ONE BUT UL.  Some "competition" there, lol

    Name me one of these "big competitors" who supposedly hold UL accountable…

  9. I always find this point a little funny from libertarians. Yes, there are certification agencies like UL, but CAN YOU NAME MANY OTHER FIRMS that do this for LOADS OF OTHER INDUSTRIES AND SECTORS??

    Whenever this topic comes up, I always seem to just hear, "UL."  If this "private certification that works so well" is SOOO prevalent in the market, WHERE are the others that do similar jobs for non-manufactured and non-electric shit?  Where were they BEFORE any gov't regulation? 

    As much as I understand where you're going with this, your fairy tale can't become reality. We DO need some degree of government testing and certification, although they can screw up at times and oftentimes DO, sadly, get captured by the very industries they're supposed to regulate.

    But… PRIVATE companies do this as well!  Remember how the financial firms essentially "captured" the credit-rating agencies, which in turn RATED BAD PRODUCTS WITH 'GOOD' SCORES?? 

    There's no perfect solution, but the libertarian ideal that we should ONLY have "private rating agencies" do all the work is incredibly silly and unrealistic. A private-public solution is probably best here, much as some libertarians might wanna call that "fascist" oversimplistically

  10. I watch every video but this may be my last. I am all for free markets but Learn Liberty seems to want a 'religious" adherence to market economics as if it were perfect.Like any system, Capitalism has pluses to accentuate and minuses to mitigate.
    A little balance would be appreciated.

  11. The Socialist Myth of Economic Monopolies http://iakal.wordpress.com/2014/03/12/the-socialist-myth-of-economic-monopoly/

  12. A.Free
    Or
    2. Slave

    A free world is more dangerous sometimes thats why it pays to pay attention to what you eat, drink, and use.
    A slave word can be safer but it pulls you off guard as you are no longer required to think. It also makes you "subject" to the whim of others that you put in charge. Do you really trust others that much? Good luck with that.

  13. Markets are evil, and capitalism is evil and unethical. Learn Liberty should REALLY take a look into Participatory Economics, but then again, the truth is too powerful for the right.

  14. "Customers that see the logo know that the product has passed rigorous safety tests."

    That is false.

    Manufacturers with more money can bribe the certification company to get the logo without passing the safety tests – making the most prominent products less safe.

    The market does not help make products safer.

  15. You only present one side of the argument.  Have you ever heard of Arthur Anderson?  How about Moody's?  Standard & Poors?  I would say you are blinded by your ideology.  Are you afraid to present the other side of the argument?  

  16. True, but what happens when the free market is corrupted and manufacture buy off certifiers and government  in order to maximize on profit over safety? 

  17. But if we don't regulate, we will have monopolies. If one company is all that we have to choose from for internet services, then they can charge us infinity dollars for dial-up and nobody on earth can start a new company offering the same services for less, because interwebz now costs infinity moneyz! If the government owns and runs everything, then there won't be a monopoly. =P

  18. Oh yes we should definitely trust private agency's to tell us wether our products are good, I mean that's what we did before 2008 to tell us wether financial products such as CDO's were good, and that worked out perfectly well (not, read up on your information these agency's get paid off by the people wanting to bring there product to the market, do that they approve there product, and in the end the agency's get off and continue working by saying its just there oppinion)

  19. Also don't get me wrong the FDA isn't perfect either it gets corrupted by money in politics but that's another problem for another day(where the argument becomes getting money out of politics)

  20. I understand the need to get lifesaving medicines into the hospitals in good time, but I still feel that such medicines still need one or more orders of magnitude more safety precautions than ordinary devices. Mostly because short-term beneficial drugs might turn out to have long-term disadvantages or complications.

  21. Bullshit. Private certification companies work for and were made by the corporations that receive certification. It's a racket.

  22. It seems as though LearnLiberty and its defenders have failed to educate themselves into what happens in the real world when a very important societal function is left up to the free market to self regulate.

    Here you go few good starting points. Read The Jungle by Upton Sinclair and learn what really happened when food safety was left up to free market forces. Do a bit of research into the child labor and employee safety practices of the glass factories, bauxite processing and coal mines prior to about 1930. That should open your eyes to the fallacy of this and other "let the market be free" arguments.

    Learn about what really happens when a free market motivated by profit self regulates and stop swallowing some rosy sounding drivel that has no basis in reality.

  23. The FDA may be funded by taxes but their corruption goes very deep indeed. See the film "Making A Killing" for a not so brief synopsis of their dastardly practices and payoff acceptance. As for drugs that could have saved lives but took too long for approval…I suppose if one is on his death bed with no hope in sight…they'd gladly Guinea Pig ANY drug if there's a hope it could save them and they should be front line and first at being the test subjects for these new drugs and if voluntary compliance is necessary I'm sure they'd ask…"where do I sign?"

  24. This is some heavy BS.  First of all, who decides what a "reputable" testing lab is?  If pharma corp XYZ pays a higher fee and gets a stamp of approval with less testing they could get bad medicine on the market.  In 20 years when the side effects are clear, pharma corp XYZ goes BK but they've already made tons of cash for the executive.  I trust NO private entity simply because their responsibility is to make money.  The regulatory agency has the public good as a responsibility. 

  25. eh I think your theories about government certification is flawed and unrealistic.  In the real world, it seems that is not how it works.  Companies are often required to do their own testing of products and report these tests to the government.  The incentive there is to do passing tests and sweep bad results under the carpet.  This has happened many times, and the companies can be fined for this, but its cost of doing business for most.  Further, the people judging products at the top, are generally political appointees with a limited term (so not worried about continued job prospects) FROM those major companies favored by government.  Take the first head of the EPA coming from Monsanto Board for example (who delayed a court order for 3 yrs to stop using DDT when evidence that it was harmful emerged).  So the incentive there is to approve drugs whether safe or not, to parent companies to have a job in those companies after their term is up.

  26. Wouldnt these rating agencies be subject to corruption from the companies paying them to rate their products? You say they wouldn't because it would damage their rep but it happened with the rating firms on wall street. They were paid to give AAA ratings on guaranteed to fail bundled loans. 

  27. First of all, Free Market economies always end up as monopolies anyway; with that, the corporations whose products are being regulated by these private companies would be able to simply purchase them, and no one would be able to stop them.  In the Gilded Age, corporations purchased the companies of their competitors all the time, and they would be able to buy there private regulators just as easily.
    Also, there is an incentive for the state to have a balance between caution and efficiency: elections, if it leans too far in one direction or the other, the votes would reflect this.
    Finally, why wouldn't people be able to choose what they buy in a state regulated economy?

  28. This is exactly what is being argued with the UK's Food Standards Agency: http://walestribune.com/politics/questions-raised-over-performance-of-food-standards-agency

  29. But how do people actually respond to either certification? Are people smart enough to know about private certification, it's reputation, it's risks? Or do people just not care and buy all kinds of crap products despite there being information against doing so? If this happens at a large scale, the market can't correct itself. The private market is faster and looser and more efficient, but the effect might not pass through to the public (because the public is poorly educated). The government is slow, but you know it will have it's effect. And which system is more corruptible? This video doesn't go into any of the real world problems inherent in human psychology. 

    If all government regulation was abolished tomorrow and replaced with private certification, there would be so much advertising and obfuscation by the many certification companies and production companies that everyone won't know what to even believe anymore. The market can't correct itself under such heavy information overload.

  30. Lovely and simplistic. I used to eat this kind of stuff for breakfast – but then I grew up. I came to realize that the world, and the market, is far more complex than libertarian theory describes.
    Ah, to be a college freshman again.

  31. Wonderful exposition, but the major problem with this video is that it doesn't cover regulatory capture and that the regulatory agency gets seized by the industry it regulates, and puts dangerous products on the market labeled as safe with essentially no oversight.

  32. So you get to choose between self-interested companies trying to gain monopoly over each other, by testing products less and pumping out products to get their name out and bring the cash in,
    Or a government run agency that works harder to ensure the safety of a product so that you know it won't kill you.

    Tough choice.

  33. Perhaps but when the government has a monopoly and losses it, consumers are used to simply knowing a product is safe. And will assume it is so, and it may take decades for the consumers to realize the harmful effects.

    So what do you do during the transition to keep everyone safe?

  34. Very amazing however I think you forgot an important point! Because of the FDA, the pharmaceutical industry has stock prices which are known to be highly volatile as the decision of the FDA can be devastating on the stock price. In a free market these shares would be much more stable in price with the outcome that many more investment funds and in particularly pension funds would provide much more capital to this industry which ultimately would be used in R&D and we know how important the availability of capital is in this industry!!

  35. This idea is wrong. When the rating agencies are being payed by the companies they're rating, they are not very inclined to give it a bad rating. we tried self-regulating markets before the financial crisis, when rating agencies were rating the toxic derivatives and toxic assets and because there was competition in the rating market they were appealing to the customers, the banks, by giving their junk products Triple A plus ratings. This is detailed in many accounts of the financial crisis, and I'll suggest this excellent one here http://www.amazon.com/After-Music-Stopped-Financial-Response/dp/1594205302. The fact is markets cannot self-regulate, and while competition and market forces are wonderful things, to introduce them into important regulations is to undermine and pervert the regulations. They killed the economy by doing this and now they want to try it with people's lives and public health. Sorry, learn your history-or present. This is a terrible idea.

  36. But what if all the rating agencies are trusted or they're all doing it? This idea gives perverse incentives to rating agencies because their business is to compete for conpaniee to rate and be attractive to the conpanies by giving thumbs up to junk products. Generally consumers trust rating agencies, after all they're there to be unbiased, informative, helpful observers. So we need to make sure that when something is being rated the rater is truly unbiased and that's why it's best to use a public service agency that can't be swayed by things that aren't the facts. Government is the best regulator in this case.

  37. Great video. It explains how free markets have built in checks to ensure the best products at the best prices. Government is inherently inefficient.

  38. 1) The rating agencies have an incentive to stay in business (from Learn Liberty)
    2) Not all people act with perfect morals all the time.
    3) Thought experiment: Knowing this, a CEO from another business can implement the following strategy: Put indirect economic pressure on a particular rating agency until such agency is risking bankruptcy. Then, at the proper moment, the CEO can now step in and rescue the agency with a loan (with a nondisclosure agreement so the agency's reputation will never be at risk), but if and only if the agency provides a great rating for a new product.
    4) Because the rating agency has an incentive to stay in business, it is entirely possible for said agency to act as a rational economic player and accept the previous agreement as stated above.
    5) Over time, the relationship between businesses and rating agencies could become morally compromised by a multitude of this and other scenarios as well given that not all people act with perfect morals all the time.

    So, there seems to be a dilemma, I'll call it the Libertarian Dilemma: Given that not all people could possibly act perfectly moral at all times, and given that libertarian solutions is to remove governmental regulations all together, what entity would then protect the people from those that wield power if they choose to abuse it at will? Or put in another way: Does a sustaining libertarian form of government require that all citizens always act with high morals all the time (since immoral behavior can destroy trust and confidence among the citizens) ?

  39. What about the risk of having antibiotic drugs readily available without prudence and as a result of unnecessary use antibiotic resistent superbacteria are created? Is there a free market system that prevents the creation of superbacteria from overuse of antibiotics?

  40. This would be fine if consumers were rational, however seeing as how the beanie babie market was a thing, I think we know that consumers are NOT rational. Also, what happens when a company owns the certification business AND the manufacturing business, I think the system of having both is fine. If a consumer wants a product enough, there's always the black market.

  41. "Each buyer decides for him or herself." God, I want to cry over this whole channel. It just makes so much sense and I crave for a free, civilized society like this so badly.

  42. Liberterianism is just a nice picture of an ideal world with near perfect people living in it. The history of drugs (pharmaceuticals) shows us a different picture. This is a business where just too much money is involved and can be made, what tends to corrupt people and whole companys, with near catastrophic consequences for society (just google "biggest pharma scandals"). This HAS to be regulated. Same is true for the financial sector (-> subprime mortgage crisis) and other industries.

  43. What if instead the government acted only to guarantee truth in advertisement but not to block the sale of a product? If someone has access to all relevant information and either decides not to use the information or decides to go ahead and use a product that tests show is unsafe in spite of the information then that's their own fault. I think we should do that, and all food and drug companies should be required to place full information on a website, including what goes into production and information on any tests related to the safety of the products.

    Then we could have private certification agencies as well in order to provide a more summarized indication of safety, but the individual if they were so inclined could do investigation themselves. Non-profit public interest groups could also do investigations using the information.

    To protect children who can not give informed consent we could have laws imposing age limits on certain products.

    EDIT: Another point. If anything is going to change you'll have to get people's attention. Maybe if someone was being prosecuted for selling an unapproved drug, but which saved people's lives because the government was too slow to approve it. That would make the public mad. People don't like to see people going to jail for saving lives. People would demand change if that happened. Although I imagine prosecutors likely turn the other cheek in cases where the treatment works, just because they are afraid of the negative publicity, which could explain why we don't hear about those sorts of cases in the media.

  44. Seeing the vape industry boom out of almost nothing in four years was a good example of industry growth in a free market scenario. While i never personally got into vaping, i could tell that the freedom of the companies from government regulation allowed it to become a shockingly huge success for any small business owner who wanted to complete in the industry. Vape shops were filling old plaza shops that nobody had inhabited for years in my hometown, and actually brought business. Ever since the FDA wanted to charge ludicrous government testing fees, these shops have been slowly disappearing again. Meanwhile, large scale tobacco companies that can afford the testing, like Marlboro,are pushing there own vape brands in convenience stores ever since. The FDA creates monopolies with its regulations by allowing lobbying to control their regulations, not fight them.

  45. An Independent rating agency model can have serious and disastrous consequences. For example S&P Rating service settled $1.5B lawsuit for their hand in the 2008 finical crash of 2008. They had an incentive to stamp sub-prime securities as AAA investment ratings (fraud essentially) in fear that the company would take their product to get rated elsewhere. They are paid to tell the producers of products what they want to hear. It isn't a stretch to think this could happen to the drug industry given how much money is on the line.

    This model can work in many situations but still has risk. Please include a balanced perspective including counter arguments when pitching policy instead of describing it as a magic bullet.

  46. This oversimplifies the situation. As several independent rating agencies don't do enough testing as they may loose future revenue from a company if they do not certify a product. It is also worth mentioning that most of the groups involved know that consumers do not know the stats of certification companies, if they even know of those companies existence. So while i agree that state run organisations aren't good at this, the same goes for the free market.

  47. I'd like to see a good explanation of why the financial ratings agencies failed so miserably preceding the housing bubble. Why did their competition with each other not entice them to give more accurate analyses? More importantly, how is it that when they did make bad analyses that nobody else entered the market to challenge their findings?

  48. I understand where you are coming from here, but there are so many other factors in play that this simplified version doesn't exactly apply. The biggest factor I can think of offhand is information asymmetry and how dangerous that can be to consumers that may not be able to fully vet the medicines they may need. You also have to consider those that have debilitating conditions and could be taken advantage of by unscrupulous drug companies that can, in effect, create an "in house" testing company and provide falsified documents claiming the efficacy of their products. Companies engage in this activity in the current climate and it will only get worse if certain checks and balances are removed.

  49. Just a bit misleading… Yes, I sometimes question myself what criteria is used by FDA to approve (or disapprove) a product. I think there should be better education and transparency for those procedures. However, the intent is to look for us. To relay on private "certifiers" is a bit questionable solutions, I personally worked with UL (mention on this video), and is a very good and reliable company, however, this means that any "shady company" can become a "certifier"…. Imagine that… Company A invest on a not-so-good product, and also invest on became a shareholder of a "certifier" company… not good.

  50. Of course this only works because the government has a monopoly on enforcing trademark law, without which such logos proclaiming safety could be slapped onto any product regardless of whether the certification firm approved use of their logo or not.

  51. Private certification? How naive are people? How did the credit ratings agencies work for us leading up to the credit crunch? Not so well huh? When it comes to complex, incomparable and difficult to metricate products such as financial products, cars, health and construction, laws are required. Laws require a government ombudsmen to oversee and regulate and as a reliable and objective arbitration body with the power to sanction where needed. Private certification is a very short road to collusion and corruption.

  52. no price is to high for the safety of our family specaly within the medical areas. Some thing like entertainment technology yes you do not need regulations as well for tool. Those areas are less likely to get someone kill.

  53. it's worse than this in the real world the government agencies created to rate or grade products and practices from some industry are usually controlled by the largest (or most politically active) firms of that industry. they but their own people (with the help of politicians they make large donations to) in charge of the agency that has the power over the products they make and pass their products while rejecting or delaying their competitors. this is why the FDA is run by employees from various drug companies, the treasury is run by goldman sachs more years than not. just for a couple examples.

  54. A lot of commentators here simply do not listen to themselves. They assume that under a free market everybody would try to con each other but then forget that that would put them out of business right away! Businessmen have a reputation to keep that is hard to build and fast to destroy, and THAT represents value. Like Milton Friedman used to say: make the "wrong" people do the right thing for the "wrong" reasons". And this my friends pretty much summarizes what the Free Market is all about! It is not that people "are good" or have "noble intentions"- it does not mean that they are not or have not, it just happens not to be what moves them in the first place when they go about their everyday business. Putting decision making in the hands of politicians and bureaucrats, on the contrary, does precisely the opposite: it makes breaking the rules a way of life for those involved while eliminating competition and paying "favors". And by the end of the day products are neither safer than they would have been if regulated by human activity – the Free market- nor are they cheaper.

  55. I think you will find that in order to install electrical equipment, your equipment must be UL certified by law (or CSA in Canada) those certifications are part of the electrical code, which are part of the building code. No, you cannot go to a competitor for UL certification. You need to go to UL/CSA themselves. So it's still a monopoly, just a private one.

    The video makes good points about risk aversion in civil service, but the problem lies with detailed wrong choices being made in implementation, not fundamental superiority of one approach as the video pontificates. Governments define markets. In some cases, it is hard to set the rules so that natural competitive markets arise. The government could just as easily establish rules for testing and allow companies to use third parties, that would compete for certifications that are acceptable for the government agency or even self-certify as is done for mileage/pollution claims by automakers. We see abuses by private sector, causing millions of premature deaths by excess pollution in cities, likely dwarfing any effects of the regulation case provided for drugs. It is also clear that market forces steer drug companies to invest in new treatments for erectile dysfunction, and not life saving treatments for rare diseases, another case where markets fail to work in an optimal way for public well being.

    yes. competition is good, monopoly bad. Government doesn't have a monopoly on monopolies and isnt't the only source of monopolistic behaviour. Sometimes Government intervention is needed to create competitive markets by setting the playing field. Where natural monopolies arise from large barriers to entry is especially obvious in infrastructure: Utilities such as water, electricity, roads, bandwidth, it is not at all clear that private sector does a better job at delivering. Take public highways that enable trucking companies to compete for cost of transportation, non-private ownership of waterways. Contrast it with private railways, where chronic under-investment causes issues such as the Lac Megantic fireball that killed over 70 people.

  56. There is an assumption here that what drug companies focus on are saving people's lives, and not short term profits. What guarantee does the public have that manufacturers and product testers won't form a cartel to manipulate the system?

  57. The main problem with FDA is not its low efficiency, but its Monopoly-by-law. Let FDA be for those who trust government more than free market. Let it even (try to) be Monopoly. But it must not be Monopoly-by-law that outlaws competition. That's it. Solved. It's clear even from the comments here that many don't understand the mechanics of market, so they don't understand how the free market solves complex problems, so they want an all-powerful Nanny – the government. It would be even better if they pay themselves for their nanny. These two approaches are not morally equivalent. One allows all to coexist according to their views, another is a totalitarianism and coercion. It's the same fallacy that make people think that USA and USSR were morally equivalent competitors. In USSR people were executed for an attempt to leave it. Like in any other commie regime in history — what a surprise…

  58. One problem is that in a market with many competing certifiers customers have a hard time deciding which one is trustworthy.
    On what ground should a customer decide wether such a institution he or she should trust, thus allowing them to build a reputation? Maybe there never was an incident. But is this really a good indicator if the certifiers are rather small due to the competitive market?
    Another possiblity would be to look at their testint criteria. But making decisions of of it is quite hard. How should I know what kind of testing is neccessary.
    The bureaucrats in government seem to be more trustworthy. Theiy are overseen by people the public elected, thereby must have gained our trust. All the time I would have needed to do research which label to trust every time I buy a product, I only have to invest once when deciding who to vote for.

  59. in order to succeed in life you need to know how to lie, cheat, manipulate and not get caught. The educational system is a method of preventing you in that, they try hard to programme you in a way that will prevent you succeeding. The "knowledge" it gives you is not useful in real life. If you are good during your studying process, you will probably have a very tough life.

  60. Didn't the FDA first not approve the use of thalidomide because of unconclusive testings but the drug companies want to push them anyway. They were sold worldwide even to pregnant women and babies were born with stump arms, so now it take only 8 to 12 years for FDA approval. They should let the people with terminal illness try any new drug that can help them.

    https://helix.northwestern.edu/article/thalidomide-tragedy-lessons-drug-safety-and-regulation

  61. So, in theory that makes sense, in practise, I would never do private testing with such crucial things like medicine. Because what's forgotten here is that the company who want to sell a product with a logo has to pay the testing organisation to give them their certification. In other word, it buys the certification. So in the end, the testing company have a bigger incentive to make the producer happy (because he gives the money) rather than the buyer who buys the certified product. One would argue that such a testing company will run out of business because of a damaged reputation and will be replaced with other testing companys. But the incentive, to put the money giving company over the buyer will be the same. And you need lots of money and resources to even build up such a testing company, so it's pretty likely that there will be just a few such companies, in the worst case just two or three and they will be happy with not interfering into each others business plan to gain capital, even though that doesn't benefit society. Such crucial things need a neutral testing agency that can help consumers to make a good decision, and not have to worry how to make the money.

  62. Very generious amount of good credit presented for the FDA in this presentation.

    Even if they take a long time to approve, what they do approve often ends up as lawsuits against pharmaceuticals. I have never noticed a lawyer presentating a commercial of a lawsuit against both the FDA and responsible pharmaceutical company, though.

    I agree in the private companies doing this work, though. I believe less dangerous and more effective drugs will be on the market because the pharmaceuticals will have a much higher accountability.

  63. This may be the miracle cure for the astronomical drug pricing crisis. If the market was in charge of the drug approval process, then Big Pharma would be unable to abuse the already broken government – run system. Plus, doctors would be able to shop around for the growing variety of drugs, thus lowering prices.

  64. Excellent, except that products releases are too complex and frequent for most buyers to be able to research. Also, not addressed is the bigger problem of the conflict of interest when pharmaceutical companies bribe and falsify test results, government or private, see recent opioid crises caused by the Sackler brothers..

  65. This feels so incredibly shady … I’d really like to know who funded this video. Private companies reviewing themselves never end up well ….

  66. One of your best wish you had mentioned that the regulations have taken it up from taking 4 years to have a medication approved to 14

  67. But isn't the counter to this the failing of bond rating agencies when it came to recognizing the mortgage-backed securities as junk? Building up to the crisis in 2008 it was well-known that if Moody's gave your securitized portfolio a low score, S&P was right their to pick up the business by giving the security an perfect rating.

  68. except businesses commit mistakes in their rush to valid things, since their comptetition is based on speed. See the Kobe steel and toyobo bulletproof suits scandals.

  69. The problem with the FDA is that, regarding drugs, it's mandate is not to ensure safety; it's mandate is to ensure effectiveness. If a drug can't be "proven" effective for whatever it purports to do, then it won't pass. What they should be doing, is testing drugs for safe dosages. That way doctors can prescribe drugs by efficacy as proven by the market.

  70. What utter garbage. How long did the tobacco industry extol the health benefits of cigarettes using their own scientific evidence until the Government stepped in and said that wasn't entirely true? Governments are only as good as the people who vote for them.

  71. I won't say that this video is wrong. However, I do think it is a bit oversimplified. To depend solely on the government to certify goods is inefficient and can lead to horrible mistakes. look at the medical instrument industry. A hip replacement that caused horrible suffering got through via a loophole designed to save time (John Oliver, 2019). On the other hand, I do have trouble trusting third-party regulators as well due to the complex interactions they have with producers that can be manipulated outside my control. I would feel more comfortable if the government had some regulation of third-party regulators so that I know there is a medium by which I can influence their operation.

  72. each buyer decide for him or herself? ain't this just a methodical support to Quackery!!?
    if the government authorized institutions should be put in check, an equal standing or higher body of officials with direct mandate from the people had to be established.

  73. We should separate Medicine and State.
    'Congress shall make no law respecting medicine, or prohibiting the free exercise thereof…"

  74. If government monopoly certifiers really have a strong incentive to be overcautious and do extra, perhaps unnecessary testing, can someone tell me why the FAA certified the Boeing Max planes with such obvious flaws. Maybe this is theory, but in practice I think the government certification agencies not only fail to certify useful products but also do certify dangerous products more easily!!!

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