Jamie Whyte in The Times is a paragon of rational liberalism. Today he neatly skewers the fallacious thinking of those who impose their own heirarchy of values and risk aversion on the rest of us.
Doctors, he points out, will tend to overvalue health relative to other goods, such as pleasure. They “confound what is good for us with what is good for our health.” And this analysis is readily applicable to the army of experts who struggle to control us and get use of our taxes to pursue their own preferences. They all fail to accept that other people have different tastes that in conditions of liberty are traded-off by those people.
Jamie Whyte again:
Politicians always claim that their safety regulations are motivated by concern for people in dangerous jobs. Yet the beneficiaries are always people who do not do dangerous jobs. Workplace health and safety meansures are a zero-sum game in which wealth is transferred from the brave to the timid.
And yet, I think Whyte here simplifies and understates the case. He concentrates on the loss of ‘danger money’ to workers if the market price of the safer jobs falls. That, adding in workplace costs, might look like a zero-sum game, but a business is not a closed isolated system linking effectively infinite reservoirs of labour and capital. The cost of complying with regulations is not transferred between internal costs and neatly compensated by changes in the labour market. The costs must be borne by customers and workers and capital in an uncertain proportion, and may force the business to shrink or restructure. And some of those costs are transfers of wealth to new players: regulators, inspectors, compliance officers, policemen, lawyers, prison officers, and the businesses that spring up to sell advice, form-filling guides and special stationery to all of the other new players and the businesses trying to minimise their attentions.
I think Whyte is mistaken when he asserts later in the same article that “left to his own devices a profit-seeking employer would get workplace safety exactly right”. Employers are often irrationally optimistic—in the modern world they need to be to become employers. But that does not change the fact that the imposition of any new form of compliance on an industry makes all its existing workers, businesses and customers collectively financially worse off, though it may change the balance between them.
The quantity of inspection, regulation and statutory record-keeping is a measure of how much worse off, in financial terms, we are than otherwise we would be. State intervention is never costless, never self-financing, though differing people may end up paying. A would be regulator ought therefore to adduce non-material benefits for what he wants to do sufficient to convince the people affected. Unfortunately it is more likely, as Whyte points out, that his choices will reflect his own preferences. And worse, his preferences when someone else is paying.
Yes; as with so many other things, the empirical reality is almost always different from the rational model. The criticism is well made.
“A would be regulator ought therefore to adduce non-material benefits for what he wants to do sufficient to convince the people affected.”
Did you have something particular in mind?
“A would be regulator ought therefore to adduce non-material benefits for what he wants to do sufficient to convince the people affected.”
Might I suggest the desire of the employee not to be injured might count. Or were you thinking along the line of greater spiritual enlightenment?
Employers may not get safety “exactly right” in the same way that I might not get my own buying preferences exactly right. It’s still a damn sight closer to perfect than the government imposed solution.
The point missed about goverment regulation is that it only benefits two sections of business community
The “evil” corrupt ones that ignore regulations, they get an even greater advantage over firms that enforce regulation
The larger organisations within the industry as they can afford to absorb an extra cost or two where their smaller competitors cannot. Thats why they are broadly in favour of govt intervention, they see only the short term gain, not the loss of international competitiveness
Every govt technocrat should realise before he/she makes up another rule that it is the honest employer being penilised
Might I suggest the desire of the employee not to be injured might count.
Of course it does, the employee is one of those involved. But the desire of unions and bureaucrats to appoint more safety representatives/officers shouldn’t.
I did mention I didn’t think Jamie Whyte is correct when he asserts employers will get things ‘exactly right’ (whatever that means) in a free market. I’ve known quite enough business people to know that’s nonsense.
In practice in Britain it can be hard to get workers to use the safety equipment and procedures provided, since they tend to be less risk averse than safety advisors for employers who might be prosecuted. The other truth about safety compliance is that it creates a specialist craft mystery, by submitting to which one guards not against accident but against the liability of being adjudged wrong by another member of the priesthood. Such approaches become exercises in box-ticking which neither engage employers and workers in considering real risks in their specific situation nor give them the opportunity to make a joint choice: both are compelled to delegate to safety officers at a cost to both.