Because passing laws without limits is what leads to unintended consequences. For example, should algorithmic pricing of car insurance be banned? Should universities be banned from offering financial aid to lower-wealth students?

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jolmg 4 hours ago | parent | next [-]

University access to the poorer can be handled by public universities that offer their education to citizens/residents (tax-paying constituents of the corresponding political entity or their dependents) at no cost or a symbolic, very low cost.

With regards to insurance, that industry depends on ignorance. If an insurance company had perfect information (psychic, precognition level) on who's going to need a payout when and who's never, then the point of the insurance becomes nil. They're not going to enter contracts with individuals that result in a net loss, only with those that result in a net gain. That can look like them just raising prices until it results in a gain. If that's the case, people can just save and use their own money to cover the events that will happen, because insurance would not be of any benefit to anyone at all.[1]

The way insurance works on a basic level is they know a percentage of people will have a set of events happen to them, but they don't know who. They have a large amount of clientele and charge everyone such that the revenue can cover the expenses of the unlucky percentage of their clientele and make a profit. To the individual, the insurance expense results in significantly less than what they would pay would they be part of the unlucky percentage without the insurance cover.

The arrangement is founded on the ignorance of who belongs to the unlucky percentage. The economics of insurance don't work without the ignorance. So yeah, at some point, algorithmic pricing of insurance likely ought to be banned if we still want insurance to exist on a meaningful level.

> Because passing laws without limits is what leads to unintended consequences.

On this "careful what you change for the consequences it may have" sort of idea, remember that algorithmic pricing is the new thing ("new" on the level it can now be, at least, with all the trading in data going on). It's the thing that may lead to consequential changes. Not having algorithmic pricing is the old, stable way. Passing this type of law is just putting the status quo in writing, in the face of the status quo possibly changing.

[1] In such a scenario, insurance companies are more likely to become some sort of useless middleman you still need, but I'll save the tangent.

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ndriscoll 5 hours ago | parent | prev [-]

> Should universities be banned from offering financial aid to lower-wealth students?

Yes, that is transparently a scam that let's them set the price to "whatever you've got (or could access via loans)." That is exactly the type of thing that should be banned.

Wealth redistribution should be a transparent government policy, not individualized pricing, which makes it impossible for anyone to know ahead of time what anything costs, completely destroying any ability to plan or even have a meaningful concept of money.

Insurance makes more sense to have different factors for premiums, but the market would likely function much better if their algorithms were required to be public.

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valleyer 5 hours ago | parent [-]

At least in some cases, that would likely have the effect of making college education less accessible to poorer people. The richer people are currently subsidizing the poorer people; if you disallow that and have everyone pay the average, the richer students would pay less, but the poorer students would be priced out entirely. I think that would end up being a net negative for society.

(I agree the U.S. university pricing system as it stands is far from perfect.)

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ndriscoll 5 hours ago | parent [-]

Wealth redistribution at point-of-sale is simply an insane policy. If you want to have transfers to the poor, provide transfers to the poor. If you want the government to provide aid, apply once with the governemnt, be approved for some level of aid, and then comparison shop with schools' published prices.

People saying "oh but the poor" are emotionally manipulating you to enable themselves to maximally extract from each person.

	▲	valleyer 5 hours ago \| parent [-]
		That's fair, and I agree a more wholesale policy could make more sense (though a government may still wish to limit some redistributed funds to being spendable only on things like college education, in which case you're approximately back in the same effective place). Bringing it back to the original topic, though, that sort of system is outside the remit of the Seattle city government, so I still think it makes sense for them to limit the rule's applicability. (It might not even be legal for them to apply it to universities anyway -- I don't know what Washington state delegates to cities in that way -- but that's orthogonal.) Obviously, I think your second paragraph is an extreme overreaction; I have no stake in any university's profits, and I am not attempting to "emotionally manipulate" you.