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.
