It is sometimes said that, without government, we’d all quickly die, due to the lack of mandatory safety standards for things like food, drugs, building construction, etc. The assumption is we’re all stupid. We need government to tell us what to do.
The embarrassing question here is to ask how all these irredeemably stupid people could possibly elect a government that was not also irredeemably stupid. One answer might be that we, as voters, seek out expertise to advise us on whom to vote for. But if we can seek out expertise in this sphere, then why not also with respect to other things, like good building practices, good doctors, etc.? The only resolution appears to be that we are wise, community-oriented, and generous when in the voting booth, but are idiots, selfish and greedy when in the market place. We’re all schizophrenics, it seems.
Another embarrassing question to ask is: How safe must we be?
NORAD has a facility in Colorado, built under Cheyenne Mountain, beneath 2,000 feet of granite, behind 25 ton blast doors. The buildings themselves sit on giant shock-absorbing springs. By all accounts it is a very safe building. It was also very expensive to build. The cost, in today’s inflation-adjusted dollars, would be over $1 billion. I mention this to remind us that safety is not the only goal of building. It is one of many. Affordability is another. Remember, we have a housing crisis in parts of the country. Is it possible that homes are too safe, and this is part of why they not affordable to so many?
Government has no magic solution, unknown to the private sector, for avoiding cost/benefit trade-offs. There are no methods, known only to government, for getting safety improvements at zero cost.
Given the inevitability of such trade-offs, the question is then, who decides?
- Government regulators, in bed with lobbyists from industry, mandating an array of safety (and increasing, environmental) “improvements,” which line the pockets of industry, while raising the cost of construction?
- Or, the free market, buyers and sellers, eyes wide open, deciding what meets their needs, and ever-reminded by their insurers of the impact to their insurance premiums of various trade-offs they might make?
Of course, just as government has no magical insight into specific cost/benefit trade-offs, neither do libertarians. This is something for individual buyers and sellers, along with their trusted advisers, to hash out in the free market.
Kevin Duffy says
Great post. I’ll add, even if we were all stupid and the central planner a genius, he still can’t possess the knowledge of the marketplace that is conveyed through the price system. Prices reflect the trade-offs of millions of consumers. Collective knowledge is far greater than that of the planner, an irony lost on collectivists.