The Negative Feedback Loop Begins

by on November 17, 2009 · 8 comments

I wrote here a couple of months ago about the shady practice among a few Internet retailers of handing off customers who accept a “special offer” to a company that charges people a monthly fee for some kind of credit monitoring service. And I argued hopefully that maybe technologists and the Internet community could generate a response to this problem:

Being a smart, informed, and aggressive consumer is each person’s responsibility if a free market is to operate well. The alternative is a negative feedback loop in which government authorities protect us, we rely on that protection and stop policing retailers. Thereby we abandon the field of consumer protection to government authorities, who—try as they might—can never do as good a job for us as we can for ourselves.

The Senate Commerce Committee is having a hearing today on “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers.”

  • arromdee

    I'd think that even to a libertarian, it's a proper role of the government to prevent fraud. Deliberately setting up a user interface so that the consumer thinks he's continuing a transaction when he's actually approving a credit card purchase of something else from someone else, is or should be considered fraud.

  • yinepuhotep

    Government has no proper role. At any time, on any subject. And that includes fraud, whether online, in person, by mail, by telephone, or whatever. If the government were not in the way, I have no doubt that the banks that are being impersonated would be FAR MORE EFFECTIVE at dealing with those fraud artists than any TLA agent.

  • http://srynas.blogspot.com/ Steve R.

    I continue to be amazed, actually disappointed, with the concept being pushed on many posts that the consumer must protect himself or herself from shady corporate business practices without government protection while corporations can use the power of the state to protect themselves from shady consumers. Berin writes: “All stores ultimately rely on employees and the police to chase down shoplifters.” Yinepuhotep wrote above: “Government has no proper role.”. Essentially, in the best tradition of Orwell; we are all equal, just some are more equal than others since some of us can use the power of the state to protect ourselves. The ability of a select group to use the power of the state does not seem to be consistent with Libertarian thought.

    I am in agreement with arromdee who wrote above: “… it's a proper role of the government to prevent fraud.“. If government protects corporations from theft, citizens should also be protected. We seem to have a distorted view that when a corporation utilizes a shady business practice that is considered “good” business but not theft. Theft is theft.

    PS: Please consider this response as being a combined response to Jim's post and Berin's post: Apple Empowering Users to “Sell” Their Attention to Advertisers for “Free” Stuff</a”

    PS: Though I would not agree with Yinepuhotep, does his phrase: “Government has no proper role.” also imply that government should not protect corporations? To be logically consistent, I would hope so.

  • Jim Harper

    I don't know who “yinepuhotep” is, but it looks like he or she is overstating the libertarian case for the purposes of lampooning it. Whatevs.

    Gang, the quick resort to ideological simplifications is a waste of time, don't you think? There is a role for government in preventing or punishing the use of force or fraud. But let's get a little subtle about it. Because the government has that role, should the consumer abandon the role entirely? Buy anything from anyone? Click on any link?

    I think the post linked above does a pretty fair job of describing the negative feedback loop at play when the government protects consumers from things that they can protect themselves from. Where to draw that line is tough! It requires some thinking! Why not read carefully and give these ideas full consideration, rather than just short-circuiting to “libertarians this” or “libertarians that.”

  • Jim Harper

    I don't know who “yinepuhotep” is, but it looks like he or she is overstating the libertarian case for the purposes of lampooning it. Whatevs.

    Gang, the quick resort to ideological simplifications is a waste of time, don't you think? There is a role for government in preventing or punishing the use of force or fraud. But let's get a little subtle about it. Because the government has that role, should the consumer abandon the role entirely? Buy anything from anyone? Click on any link?

    I think the post linked above does a pretty fair job of describing the negative feedback loop at play when the government protects consumers from things that they can protect themselves from. Where to draw that line is tough! It requires some thinking! Why not read carefully and give these ideas full consideration, rather than just short-circuiting to “libertarians this” or “libertarians that.”

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