"> David, the problem with the Pinto is that the government does not
adequately regulate safety -- not even to the extent of making relevant
information available -- so the regulation is left to the lawsuits -- a
very inefficient way of doing things.
Doesn't Richard Epstein (the Chicago L&E extremist who argues that we shoukd destroy the administarive/welfare state with Takings Clause of the Constitution) argue, in Simple Rules For A Complex World, that regulation by lawsuits is the most efficient form of regulation? I can't recall how the argument goes though.
I don't know about auto safety, but the govt definitely goes overboard in safety regulations of other things -- drugs, for example. The FDA won't allwo lots drugs that have been proven OK are are widely available in other industrualized countries. I wonder why that is. Maybe taht raises the cost of drugs, thus providing larger profits for Big Pharma. That's pretty vulgar Maexist of me, of course. I think it depends on the area.
> A few bucks for a protective gasket would not have meant that much. In
hindsight it was stupid, but very costly for a number of innocent
people.Actually the Pinto case raises a very deep and extremely hard issue. What exactly whas it that Ford did that seems to terribly wrong? I don't dispute the idea that Ford did something bad, but what was it? As David says, we know as sure as God made little green apples that every design decision an automaker makes will cost lives. Even if the decision is to build every car to be a tank. Each individual choice may be small in terms of the cost, but of course if cars are made maximally safe they will be tanks, and very expensive. Which no one wants. What we don't know, unless we study it beforehand, is how many lives each decision will cost. Was wrong of Ford to calculate the cost in lives beforehand? Is ignorance better?
Well, Ford also calculated the cost in term of money, gave money values to the wrongful death and negligence lawsuits that might expected to occur as the result of making the decision, decided that it was worth it in terms of profits paying that cost and letting the additional people die. That seems cold-blooded, it was the basis of the criminal prosecution that failed. But we also know that any design decision means deaths, lawsuits, effects on profits. Is it bad or wrong to think about those things in making the design decisions? Or to think about them too clearly on the basis of quantified estimates? It should rather be done vaguely, by guesses?
I am actually rather at a loss how to approach this one. As a socialist I am sort of inclined to say that in capitalism the problem is not that we get accurate information about the costs, including in lives, of our choices, but that the nature of the system is that considerations of profit tend to dominate the process. But even a socialist society would have to accept that its design decisions would lead to deaths. Safety is not free, and we are not willing or able to pay an infinite price for it.
jks
Michael Perelman
Economics Department
California State University
Chico, CA
95929
-----Original Message-----
From: PEN-L list [mailto:[EMAIL PROTECTED] On Behalf Of David B.
Shemano
Sent: Tuesday, August 10, 2004 12:55 PM
To: [EMAIL PROTECTED]
Subject: Re: [PEN-L] Economics and law
Regarding the Pinto, cost/benefit analysis, etc., what exactly is the
issue? I mean, we know with certainty that a certain number of people
are going to die each year from auto accidents. We also know that if we
reduced the speed limit to 5 m.p.h. required all passengers to wear
helmets, required safety designs used for race cars, etc., the deaths
would all be eliminated. But we don't, because the costs of doing so
would be astronomical, and most people seem prepared to assume certain
risks in consideration for conveniences and benefits. So is the problem
the concept of cost/benefit analysis, the improper implementation of
cost/benefit analysis, or disagreement about what are costs and
benefits? If you reject cost/benefit analysis, how could you ever
decide whether any marginal rule should be accepted or rejected? Why
does this issue have anything to do with capitalism/socialism -- would
not these issues have to be addressed no matter how the society is
organized?
David Shemano
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