"An unregulated market will spawn entities that provide the services it needs. This includes security and trust. Insurance companies, for example, are entities that people trust to protect them against loss. Rating agencies are entities that people trust to provide risk assessment."
Do you have any examples from reality where this has happened? Are insurance companies and ratings agencies really trusted agencies that would function even better in an unregulated market?
I posit that with no regulation, these entities would become even more unscrupulous than they are now.
Furthermore, magazines, blogs and retail store all act as rating agencies in some ways. Magazines have a strong incentive to only recommend quality products since their reputation is at stake. The same goes with retail store. They make sure they sell quality product because their reputation is at stake and they don't want to lose business.
Of course, the incentive for building those kind of companies is very low given the uncertainty that the government might decide to assume your role, putting you out of business.
> CAs suck and are unaccountable. Any of them can (and many of them have) issue a certificate for a site to an attacker.
> eBay feedbacks can be gamed and I generally don't trust them.
Do you think the government would do a better job at providing CAs or rating eBay sellers? Do you think the government is somehow immune to fraud?
> Your retail store example is laughable. I'm sure Walmart really cares about the quality of its products.
"I'm sure Walmart customers really care about the quality of products they buy at Walmart."
Walmart offers what customers want: cheap prices at the cost of lesser quality. Luckily we are still free to buy low quality products, because the government might "fix that" someday.
The question was not whether unregulated markets spawn "trusted rating services". It's whether society could function with private rating services in lieu of regulation.
Actually, he is not moving goal-posts, he is just asking for the second half of his originally stated question to be answered. I know it is silly, and probably sounds like nitpicking to you, but please, don't make false claims, particularly when they are just veiled ad-hominem.
Why? The regulations erect great barriers to entry for would-be competitors, solidifying profits of the current market players and allowing them great latitude for slacking off and sub-par performance.
We're seeing the same thing now with the money transmitters.
Do you have any examples from reality where this has happened? Are insurance companies and ratings agencies really trusted agencies that would function even better in an unregulated market?
I posit that with no regulation, these entities would become even more unscrupulous than they are now.