Free Markets Are More Important Than Safety Regulations

Lessons from the recent tragedies in Texas and Bangladesh.

California and Texas officials have been having an ongoing tit-for-tat over which of the nation’s two mega-states is the better place to live and do business – something that has become a proxy issue for the broader philosophical debate over the proper size and scope of government.

In California, Democrats control every state constitutional office and have an iron grip on the Legislature, where they always propose new regulations and seek new ways to secure additional tax revenues.  In Texas, Republicans are dominant and Gov. Rick Perry has spent time in San Diego and other California cities luring businesses to the Lone Star State, which prides itself on a low tax burden and more manageable level of regulation.

The rhetoric often has gotten silly, especially given that both states are part of a nation that is highly taxed and highly regulated. Most of the differences are around the margins. Nevertheless, Democrats here pretend that businesses aren’t leaving and that the common critiques of $150,000 pension deals for public employees, sky-high tax rates and punitive bureaucracies are a right-wing, Koch-funded plot to turn the Golden State into Bangladesh.

The latest flare-up centers on a Sacramento Bee cartoon in which Perry says “Business is booming in Texas.” It then shows the recent, tragic fertilizer plant explosion in West Texas. Cartoons are rarely subtle, and the message here is that Texas’ lower-regulation climate is responsible for a blast that killed 14 people and injured 200. Gov. Perry penned an angry letter to the editor.

And the Bee, essentially a house organ for state workers, responded with a childish lecture about Perry’s lack of concern for worker safety. It then published a cartoon that made a similar point about the perils of limited government in the context of the tragic Bangladesh building collapse that has claimed the lives of hundreds of people.

I didn’t notice many lefty commentators making similar points about the 2010 PG&E gas explosion in San Bruno. State regulators recently advised against a fine for the utility company even though it was found to have violated dozens of state regulations. The tragic blast came in the nation’s most-regulated state, and involved a regulated utility that can’t sweep a sidewalk without state regulatory approval.

Texas may have relatively fewer regulations than California, but it is also a highly regulated state in a highly regulated nation. The armies of regulators who have descended on the remnants of the fertilizer plant have yet to determine a cause, which doesn’t stop opinion-page editors, cartoonists, and lawyers (several lawsuits have been filed already) from jumping to conclusions about what is to blame there.

Gee, something exploded in Texas so it must be a lack of government at fault, but when something explodes in California it must be caused by corporate greed, even if the explosion came at a government-sanctioned monopoly business. These simplistic arguments divert our attention from productive ways of making our lives safer and better.
Bangladesh is a different story. That tragically poor nation does have many rules and regulations regarding buildings and most other things, but few people follow them. The people there can’t afford to do so. One finds strictly enforced building codes in wealthier nations, but those codes followed the wealth; they aren’t the cause of it. As nations become wealthier they have more money to invest in things such as safety.

When people can barely feed, house, or clothe themselves, they don’t worry as much about things such as, say, second-hand smoke or improper Americans with Disabilities Act regulations. Poorer societies, for instance, are always more polluted than wealthier ones. As they become wealthier, pressure builds for cleaner skies and better water supplies – and for tighter codes for buildings. The answer isn’t to impose tougher rules on poor nations. If Bangladesh adopted Japan’s notoriously tough building requirements, it wouldn’t change anything. People in Bangladesh don’t have the money to rebuild their nation’s stock of buildings.

The best way to improve public health is to reduce poverty. Free markets – not government edicts – are the only way to accomplish the vast improvement in wealth that is a precursor to the better environments we all crave. Note that the current building codes are so inflexible that they stifle innovative building designs that will provide further safety and environmental enhancements.

No one I know is calling for “no” government. We all agree on the need for safety regulations. But the most useful ways to improve health and safety stem from competition and from market-based checks and balances (i.e., insurance requirements, rules imposed by lenders and the like) – not from armies of indifferent regulators or from the creation of paperwork-producing bureaucracies more interested in self-preservation than innovation.

Government offers us safety but spends most of its time complaining that it lacks sufficient resources to provide it, no matter how aggressively its budgets grow. How much safety have we lost because we spend so much money on governments that misspend it?

Let’s hope that point gets heard as people make snap judgments about the tragedies at the West Fertilizer Co. and at the factory in Bangladesh.

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  • CampingInYourPark||

    "Texas Department of Public Safety (DPS) Director Steven McCraw today directed the Texas Rangers to join McLennan County Sheriff Parnell McNamara in launching a criminal investigation into the fertilizer plant explosion that occurred in West, Texas, on April 17."

    http://www.statesman.com/news/.....ion/nXnQ8/

  • OldMexican||

    And they mean no fertilizer in that statement! So there!

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  • Brett L||

    Listen, I know they're having a good season, but I'm not sure baseball players are going to improve the quality of the investigation.

  • Bill||

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  • sarcasmic||

    No one I know is calling for “no” government.

    Nuh uh! If you object to government doing something, then you object to government doing anything! Tony said so so it must be true!

  • BLEEDINELL||

    Who the fuck is Tony?

  • Tony||

    Pretty sure the fact that Republicans have gutted OSHA over the years is a major part of the problem. Not a state-level regulation fail, just another consequence of small government fetishism at the national level. There will be more.

  • $park¥||

    just another consequence of small government fetishism

    These words make me cry, especially when pegged to Republicans.

  • Tony||

    Oh they never make government overall smaller--they tend to increase spending and debts far more than Democrats. But they do often succeed at the real goal small government rhetoric is meant to obscure: making government small for the rich and powerful.

  • $park¥||

    Don't worry, you didn't need to explain that you don't get it.

  • tarran||

    No. No. Don't stop him. Watching Tony 'reason' is like watching a cute little kitten that's trapped itself in a paper-bag and is engaged in a life or death struggle to escape.

  • sarcasmic||

    Only took him two posts to contradict his own story and show him to be the liar that he is.

  • The Original Jason||

    You mean they're just like Democrats? Say it ain't so!

  • Sevo||

    Tony| 5.10.13 @ 12:26PM |#
    ..."making government small for the rich and powerful."

    Poor shithead, trying to ignite the politics of envy and ending up only envying...

  • ||

    Fuck off, sockpuppet.

  • tarran||

    My ex's mother works for OSHA in a pretty high level post.

    In my admittedly limited conversations with her, I have heard no complaints about it being gutted. To the contrary, she has crowed about the increased 'responsibilities' they are exercising.

    Her frequent vacations and the money she gives to my ex implies that they aren't hurting too badly ...

  • UnCivilServant||

    I love your comedy routine.

    Wait, you're serious about believing that?

    Hav you tried complying with the reams of contradictory regulations? I work in a cubicle farm at a government office, and we can't even comply with them all. If OSHA is "gutted" it gutted itself by making it impossible to be in compliance, leading to people simply ignoring them.

  • OldMexican||

    Re: Tony,

    Pretty sure the fact that Republicans have gutted OSHA over the years is a major part of the problem.


    You have NO idea, NO clue, not even a hint thrown to you in a pitiful attempt to help you not look foolish, of what you talk about.

    Nobody has gutted OSHA. It remains the most intrusive and hated regulatory body within industry for a good reason. They have not relented one bit in their efforts to find the most trivial of "safety violations" that have nothing to do with safety. They always leave a trail of citations regardless of how safe is a factory or manufacturing facility. They're still the same bureaucratic assholes that they were 10, 20, 30 years ago.

    Fuck you, Tony.

  • fried wylie||

    the most intrusive and hated regulatory body within industry

    I think this calls for a ReasonRupe Poll. Or two, one for most intrusive, then another for most hated.

  • The Original Jason||

    I've got an idea for a Reason-Rupe Poll myself... where do I submit it?

  • Zeb||

    And it's also possible to be perfectly compliant and still be quite unsafe.

  • sarcasmic||

    If you are in compliance and something happens, are you still held responsible?

  • UnCivilServant||

    Yes, of course you are, it was your worksite, you should have forseen it.

  • EnlightenedOne||

    That's actually not true. If a major enough accident happens and you are unlucky enough to then receive a visit from your local OSHA inspectors then they will do an investigation of the incident, talk to every worker they can find and go thru all of your required paperwork. If they find you not compliant then you can get a violation for any number of reasons. They can also just randomly show up without an accident occuring and give you a violation for any number of reasons. The pointis that the accident does not matter in the eyes of OSHA. What matters is your compliance with documentation, training and whatever else is written in their regulations. The accident is just the catalyst that gets them onsite.

  • BuSab Agent||

    Especially when you have dueling agencies..the NTSB say drunks operating vehicles is a no-no, ADA says alcoholism is a disability that must be accommodated.

  • The Original Jason||

    They always leave a trail of citations regardless of how safe is a factory or manufacturing facility.

    That's called "CYA".

    You see, if there's an accident, there will be an investigation and if OSHA doesn't have a papertrail, then someone at OSHA screwed up and that would endanger the agency.

    And we can't have that, can we?

  • spqr2008||

    Tony, my best friend's dad works for OSHA, and work rules have only been made more strict since the 80s. Now, the fine amounts have changed (mostly gone down), but the number of punishable offenses has gone up drastically.

  • Sevo||

    Tony| 5.10.13 @ 12:20PM |#
    "Pretty sure the fact that Republicans have gutted OSHA over the years"

    Cite missing, shithead.

  • BLEEDINELL||

    Oh,you're the numbnut who thinks the world was made to provide you a living.

  • rudehost||

    From 500 million under the last year of Bush's administration to roughly 570 million today well outpacing the rate of inflation. Someone get the man a dictionary. He seems to be confused about what the word "gutted" actually means.

  • LarryA||

    Governmentspeak: "Gutted" = "We didn't get more than the increase we asked for."

  • LarryA||

    Of course it was an OSHA problem. There isn't any doubt that an OSHA inspector would have prevented the whole disaster by noticing that a handrail was 2" too high, levying a kazillion dollar fine, and requiring it be replaced at the federally-mandated height.

  • Mark22||

    You say Republicans have gutted OSHA? Well, workplace injuries have been going down year by year. So, what is the "problem"?

  • Faithkills||

    Empirically we know OSHA does exactly nothing to increase safety.

    Logically we know it must do the opposite.

    The function of government agencies is to fail. They cannot expand otherwise. They can only profit if they fail in their nominal mandate. Who would increase resources for an agency that's doing it job efficiently?

    No one.

    This is why public education has become so awful. Over time it must fail. FDA must have salmonella outbreaks. MMS must allow oil spills. OSHA must allow occasional plants to blow up. These agencies effectively shield the actual guilty party, like BP, from tort. If BP was not so shielded, and they were exposed to unlimited liability, you can be certain deepwater horizon would never have happened. Of course in our progressive/fascist system, BP merely paid off the government who then dolloped out some scraps to actual victims.

  • fried wylie||

    SlightlyOT/Tangential:

    so, that penny-bid site, "Get an iPad for $30". If you watch TV with commercials, you know what I'm referring to.

    So, near the end of the spot, they flash "Results not typical" in the tiny-text. Except, those atypical Results are the entire basis of their pitch.

    So, I pull up the wikipedia article for the FTC.

    First, “there must be a representation, omission or practice that is likely to mislead the consumer.”

    ...

    the placement of the disclosure in an advertisement and its proximity to the claim it is qualifying

    Ok, so, how does one measure the proximity between a verbal claim and the tiny disclaimer text? Distance from the bottom of your screen to your speakers?

    My conclusion is that the ad is a misrepresentation. Which caused me to ask WHAT EXACTLY ARE WE PAYING THE FTC FOR? I don't think the agency should exist in the 1st place, but if they're gonna take our money they should at least be doing their job.

  • Night Elf Mohawk||

    If they're going to exist in the first place, they should mandate the showing of typical results for this, for weight loss programs, for exercise programs, and all of the rest.

    Showing the typical result of a Nordic Track machine being used as a clothes hanger would probably cut into sales, though.

  • fried wylie||

    Showing the typical result of a Nordic Track machine being used as a clothes hanger would probably cut into sales, though.

    "Nordic Track Luxury Garment Storage."

    lrn2market, noob :P

  • fried wylie||

    It's akin to paying police to catch murderers, rapists, and theives, then they use their budget to arrest drug dealers...oh wait, we do that too.

    Ok, it's like paying the armed forces to defend America, then they use their budget to blow up people who are no threat to America (at least, who weren't a threat until we started blowing them up)....oh wait...

    Ok, it's like paying for roads, and then that money goes to pensions. Or like paying for education, and that money goes to pensions.

    Damn, I'm having a hard time coming up with ANY example where the money actually pays for its purported purpose. Jails?

  • fried wylie||

    OH, I got a decent example: money budgeted for revenue collection actually goes to collecting revenues.

  • UnCivilServant||

    You know, when we paid off the Mafia's protection collectors, they'd actually put the hurt on people trying to muscle in on our business. Fed's got too many customers and has to be broken up as a monopoly.

  • fried wylie||

    I've said it before: at least the Mafia is honest about their operation.

  • Fatty Bolger||

    They're far too busy trying to figure out how to weasel their way into regulating the internet to bother with small-ball bullshit like that.

  • fried wylie||

    You left off "FY,TW"

  • mad libertarian guy||

    Nothing gets a libertarian riled up quite like being felt up by an old man in the TSA.

    Just thought I'd share my morning experience.

  • $park¥||

    Did he wear gloves or did you tell him you like the natural experience better?

  • OldMexican||

    Re: mad libertarian guy,

    Nothing gets a libertarian riled up quite like being felt up by an old man in the TSA.


    But wasn't your abstinence-only sexual education the reason you felt so worthless like a chewed piece of gum afterwards?

    /Elizabeth Smart.

  • Zeb||

    Oh, Give Smart a break. It's the dumb feminist twats that made the story about abstinence only sex ed that you should have a problem with.

    It's not the abstinence only education. It's the religious and cultural idea that an unmarried woman is worthless if she is not a virgin. It seems quite reasonable to me that if you are taught your whole life that getting married and having kids is your main purpose in life and that if you are not a virgin, you are worthless as a potential wife and mother, that you might feel worthless and used up after you have been repeatedly raped.

  • OldMexican||

    The answer isn't to impose tougher rules on poor nations. If Bangladesh adopted Japan's notoriously tough building requirements, it wouldn't change anything.


    Well, it would change ONE thing: NOBODY would build so much as a shack in Bangladesh.

    It is certainly risible to listen to leftists make the case against markets by making a showpiece of the Bangladesh disaster, which is as absurd as relying on the Ariel Castro crimes to show the failure of markets. The owner will not only pay with his freedom (and very likely, his own life) for what he did; he also lost all the capital he inveted on the edifice and machinery, and deservedly so. But, for each businessman that acts with stupidity and callousness, there are millions that will NOT. The fact is that these cases are extremely rare, just like school shootings are extremely rare.

  • sarcasmic||

    Well, it would change ONE thing: NOBODY would build so much as a shack in Bangladesh.

    I think you missed the point which is that rules don't matter if you can't afford to enforce them.

  • Brett L||

    OT: I have a new use for all those orphans besides tying rugs and crawling through my ductwork to clean it. I need GDF-11 factories.

    “In this study, we were able to show that a protein that circulates in the blood is related to this aging process, and if we gave older mice this protein, we could reverse the heart aging in a very short period of time,” Lee said. “We are very excited about it because it opens a new window on the most common form of heart failure.”

  • Anders||

    TonySock says OSHA has been gutted?

    Most small and medium sized businesses are in breach of OSHA regulations they simply don't know about. OSHA exists to create regulations - regulations justify their existence. The fact that a ton of them are corner-cases and make-work for bureaucrats doesn't concern TonySock.

    You need an army of HSE people to keep up to date with the shite they dump out every month.

    Large corps do employ such armies - but leftists say corporations are evil.

    Everything mid-cap and below simply cannot afford the onerous overhead to guarantee 99% compliance.

    Statists will carry on being statists.

  • An0nB0t||

    No one I know is calling for “no” government. We all agree on the need for safety regulations.

    You need to get out more, Steve.

  • UnCivilServant||

    I was starting to wonder if we'd finally killed off the last of the anarchists, because I'm pretty sure they constantly call for 'no government'.

    And who's this "we all", because I don't. The government is fairly useless at arbitrating what is safe or unsafe.

  • Almanian!||

    have yet to determine a cause

    What? IT BLOWED UP REAL GOOD! There's the cause - IT BLOWED UP! DUH!

  • ||

    Three Words: Mandatory Liability Insurance.

    All you have to do is require the plant operator to carry liability insurance capable of covering compensation to the victims in case of an explosion, and let the markets do the rest. Insurance companies will have a direct financial incentive to inspect plants on their own and impose their own safety guidelines (in exchange for lower rates).

    (Oh, and fuck you to all the people who think this isn't libertarian. Go read some books. )

  • LTC(ret) John||

    Yeah, and maybe a nice government list of "approved" insurance companies! They would certainly be only selected for quality And mandatory policies with price controls for fairness! And just a few guidelines on how to implement this, with a mere handful of dedicated civil servants to manage it - for the common good!

    What's not to love, fellow libertarians?!

  • Anders||

    Ah yes, more insurance policies are the answer. That plus so double-extra-strong super regulation. We need at least 50 new agencies to regulate this.

    It may not save the kittens but it will stimulate the economy by providing jobs for life for at least 10,000 newly irreplaceable government workers.

    And growing government does stimulate the private sector. Government workers use can use their EBT cards to shop at Whole Foods, which is a private company btw.

  • The Original Jason||

    The Texas fertilizer plant already had mandatory liability insurance.

    They're called "Texas Taxpayers" and "US Taxpayers".

  • Sevo||

    "(Oh, and fuck you to all the people who think this isn't libertarian. Go read some books. )"

    Fail.
    Too many example to bother with, but I can's see any government requirement of insurance that would do better than the market.

  • Sevo||

    UnCivilServant| 5.10.13 @ 1:20PM |#
    ..."The government is fairly useless at arbitrating what is safe or unsafe."

    It's also totally worthless at drawing the correct compromise between 'safety' and people making enough to eat. IOWs, the government's concept of safety ignores Bastiat's point.

  • Greendogo||

    "No one I know is calling for “no” government. We all agree on bullshit bullshit bullshit bullshit"

    Let me help you out there, Bud! NO F-ING GOVERNMENT!

  • Eric Bana||

    This reminds of me the reason lefties gave for why the earthquake in Haiti was so bad: "There weren't any safety regulations on their buildings!!!!!!".

  • Epeon||

    I have about 40 years of industrial experience in the chemical, oil & gas arena. I have been through dozens of OSHA and EPA inspections. They are, normally, worthless. This plant, for example, was inspected in 2011. The RIG oil rig that blew up in the gulf had inspectors on it routinely.

    So, why is inspection almost futile? Inspectors from the government are usually liberal arts majors who know very little about engineering or the industry they work in. Secondly, these inspectors go from plant to plant and not in the same industry. So, the inspector at West might have been in a plant that made shirts the week before. West was obviously either making or handling ammonia nitrate. This chemical has a long history of industrial accidents. You would have need an inspector who understood that specific industrial chemical, its hazards, and understood how its danger could be mitigated. Very doubtful you would get someone like that. Anybody who was that good would be working for $50,000 more in private industry.

  • LarryA||

    Precious OSHA moment: "The CO2 sensor is too low."
    "Uh, the what?"
    "You know. It keeps people from being poisoned by carbon monoxide."
    "Carbon monoxide is CO, not CO2."
    "Whatever. The sensor should be way up on the wall, not down where you can reach it."
    "What are you talking about? There isn't anything here that burns oxygen."
    "WTF has that got to do with anything?"
    "Uh, it means no CO sensor is needed."
    "Well then what's that?"
    "That--is a thermostat."
    "What's a thermostat?"

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  • Quasimodo||

    Having spent 10 years working for the Washington State equivalent of OSHA, I found your article to be spot on! Government agencies in Democrat-controlled states have a strong anti-business bias and their leaders make decisions based on caricature-like views of business owners. The effect, when it comes to workplace safety, is a focus on compliance with regulations and not -- despite their mission statement -- trying to reduce workplace injuries, illnesses and fatalities. One study of injury statistics concluded that if one business had strictly adhered to all OSHA regulations, they could have reduced their workplace injuries by 20%. In other words, the rules-based approach to workplace safety would not address 80% of the conditions that led to treatable injuries.

  • Faithkills||

    "No one I know is calling for “no” government"

    You don't know me.

    Still the point is very valid. These firms are highly licensed and regulated. Market entry is restricted by the state, so the firms have to compete less for labor. Part of that competition in a free market would be a safe working environment. As it was in more free markets.

    The solution would be to allow any firm to locate there, driving up wages and safety through natural competition.

    Under the guise of 'protecting the worker' firms essentially pay the state in the form of licensing, compliance, and regulatory fees to limit competition. That prevents the labor market from clearing and keeps labor prices low, and thus necessarily safety, low as some workers will always be willing to take risks for higher pay.

    The state's natural market incentive is to provide the best service possible to it's customer, the fascist firms which employ the state to limit competition. Thus the better and more subtly the state can do so, all the while presenting this service to the rubes as protecting them, the more the state profits.

    Barring actual altruists in government, which I will stipulate may have existed in some places and times, the state always must perform it's market function for it's consumers, which is raising barriers to market entry, and protecting capital from competition.

  • Faithkills||

    Unfortunately the state itself being a monopoly, those profits cannot attract competitors. The ultimate monopoly in turn sells monopoly privilege.

    This of course destroys gross capital in the system, and does so progressively over time as the system of preventing competition becomes more perfected.

    The function of the state has been, is, and necessarily MUST always be, the protection of capital from competition.

    Always at the expense of labor, which of course is a cynically humorous irony that labor thinks of government as it's champion.

    Labor doesn't need a champion, the champion has a monopoly, and it always has and always WILL work for capital.

    Labor needs to decapitate the champion so capital has to compete fairly.

    Of course labor will not likely ever do this. Labor has been kept ignorant by compulsory indoctrination and wage labor training camps which labor pays for, that provides occupational training for labor which labor is forced to pay for via taxes.

    This marvelous system makes the wage earner pay via taxes to be only educated enough to work for the system, never enough to understand the system. Capital socializes the cost of training it's own workers ONTO the worker. It's brilliant actually.

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