Niklas synthesizes insights after thinking about regulation & innovation by talking to experts and practitioners for more than 8 months.
Why are regulations important?
John Maynard Keynes observed that capital accumulation and technical improvements enabled economic growth.
Keynes calculated that with 2% growth per year, the economic pie increased by 7.5x in 100 years. If it would be 5%, it’s 130x our current level of wealth.
That would lead to an age of superabundance.
Regulations have a much larger impact on those than immediately obvious. They directly affect Keynes' factors of capital accumulation and technical improvements.
If we want to reach an age of superabundance, we need to look at our process for making rules that impact hundreds of millions of people
The 10 theses are:
(1) Our knowledge of the multi-layer effects of government regulation is comparable with medieval doctors' knowledge about the human body.
(2) It is an obfuscation to equate regulation with government regulation. There are many more ways for achieving the same effects.
(3) Our association of regulation with stability is influenced by pro-authority bias.
(4) Regulation mostly targets groups that are unpopular with the majority.
(5) Government regulation mostly follows as an overreaction to public events.
(6) We regulate seen consequences and disregard unseen consequences.
(7) In the absence of binding obligations, public officials have a herd mentality.
(8) Most business regulations fail because they don’t address the Safety Paradox.
(9) The main problem with regulation is the process of how we make decisions.
(10) Bad regulations are hard to get rid of (Machiavelli Effect).
Towards the end, Niklas discusses different solutions such as ethical exit, jurisdictional shopping, competition, and experimentation in governance.
Over the coming episodes of this podcast, we'll get more in-depth about solutions, entrepreneurs that achieved the impossible, what promising governance experiments are underway and how to achieve 100x growth for humanity.
Please send feedback and guest wishes to Niklas:
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Email: niklas@infinitafund.com
Ep. 25: A First Synthesis - 10 Theses About Regulation's Impact on Innovation & Growth