From: egl1@cunixf.cc.columbia.edu (Elizabeth G. Levy)
Newsgroups: alt.politics.elections
Subject: Re: Regulations
Date: 12 Apr 92 18:38:14 GMT
Reply-To: egl1@cunixf.cc.columbia.edu (Elizabeth G. Levy)
Distribution: usa
Organization: Columbia University

Mr. Solinsky writes:
>In article <1992Apr12.051518.7182@cunixf.cc.columbia.edu>, egl1@cunixf.cc.columbia.edu (Elizabeth G. Levy) writes:
>
>|> >To site the three examples given in the last two posts:
>|> >
>|> >  If we had no anti-trust laws, I could do everything I can do now. Companies
>|> >  would have more freedom.
>|> 
>|> But, if companies have more freedom, can't they, say, form a cartel
>|> and deny you your freedom to choose goods and services?  Tell me if
>|> this isn't obvious.
>
>If people are not satisfied with the goods and services provided by a
>cartel, there is the opportunity for profit. People like profit.
>

What about industries with extremely high start-up costs?
Consumer satisfaction is not necessarily the easiest thing
to determine (look at New Coke).  Market forces won't necessarily
break up cartels if 1) the initial costs are high; 2) you may
not see a profit for a long time; 3) this profit is not guaranteed
because of questionable consumer support.

Further, what about industries based on access a limited resource?
Should a single company have control of all, say, yew trees (from which
we have a new fangled anti-cancer drug)?  Does this benefit the
consumer?

Though I agree that antitrust laws should not be applied willy-nilly
(it's sometimes hard to define a market; consolidation may be benificial
in the face of foreign competition, etc.), I feel that throwing out
any and all such legislation is sacrificing the consumer on the altar
of laissez-faire capitalism.

>|> Now, one thing that may be overlooked in all this is that workers
>|> tend to have only a single shot at their accident, so to speak.
>|> If they get injured on the job (through no fault of their own),
>|> that's it.  Monetary claims on a lost limb will not re-attach it
>|> to your body.  A lawsuit will not bring back a dead relative.
>
>_Everybody_ has only a single shot at their accident. If somebody wants
>to avoid all accidents, he/she can live in a home, far away from any
>potential natural disasters with absolutely no appliances or anything
>else. People choose to work in potentially dangerous situations.
>

I don't expect the construction yard near my house to be a dangerous
place.  Shouldn't I have the confidence to walk by?  Should I instead
go around in fear of some catastrophe striking, one that could have
been prevented by some safety regulation?

>In any employment situation, there is a certain probability of suffering
>an injury per day f(c), where c is the cost per worker of measures the
>company takes to make employment safer. The gain per day to each worker
>is their wages plus benefits minus, the product of the pain (including
>loss, suffering, death and what have you) of being injured and the
>fractional probability of being injured minus the discomfort of working
>(many people don't like working. this discomfort for working is greater
>for some jobs that others. For example, garbage men get higher pay than
>teachers because the discomfort is much greater. g = (w+b-(l*f(c))-d).
>Workers will take the job which they are capable of doing which gives
>them the greatest gain. The end result of all this is that the company
>will increase c (and therfore make the workplace safer, until they
>minimize c+b+w. This ios fair and is in the best interests of both
>parties.
>
>What has historically happened (and why we have regulations in this area)
>is that workers have done are poor job of determining f. The atitude that
>government takes if that f must reach a certain minimum. Due to politics,
>the minimum thus chosen is not allowed to vary with market conditions and
>never decreases. The result is that c is higher than it should be and
>four things happen: A) wages and benefits are decreased, B) the number of
>people employed is decreased thus causing C) production to be decreased
>as well as D) the employer's freedom getting decreased.

Out of curiousity, if voters want more health and safety regulations,
would you give it to them?

What market conditions are you talking about, to start with?  The
influx of workers willing to take more dangerous jobs, I suppose.
OK, if you find some poor ignorant sap more willing to kill himself,
so be it.  But you have to consider, uh, collateral damage.  Chemical
plant spews out lots of poisonous gas.  Nearby town almost gets wiped
out because the company hired workers ignorant of the safety precautions.
(I'm referring to this month's Harper's article on how Reagan era
deregulation and union-busting has been responsible for the rash of
oil refinery explosions in the past 6 years.)  This is cost effective
for the company.  Not only do they pay these workers a third less in wages,
they don't have to pay the usual benefits (insurance and pension).
Again, I don't want for so venal a reason as company cost-cutting.
I guess you'd argue that I can move.  What if I have no place to go?
You're going to help me find a job up in Boston?  You're going to
retrain me?

Further, having these safety regulations does not necessarily reduce
productivity.  Yes, it might reduce the number of people hired, but
those hired will have faith in their fellow workers and the machinery.
One thing that article pointed out was that the union workers do not
trust the contract workers the company hires.  Doesn't this looking
over the shoulder reduce productivity?  Do you work as well if the
guy next to you might, out of ignorance or stupidy, blow the plant up?

Don't forget the equations you pick up in an econ class DO have
political assumptions behind them.  What's the cost of a human life?
For my life, it'd be somewhat less than costing a company a little
inconvenience.

>|> You can still sue for damages, of course.  But then, the company
>|> can fight you tooth and nail.  You may not see any compensation
>|> until well after you've ceased to be able to enjoy it.  This is
>|> the case with a lung cancer victim suing one of the tobacco companies.
>|> She's dead.  The company may even declare bankruptcy under the weight
>|> of the lawsuits.  This is the case with asbestos manufacturers.
>
>This is because of bankruptcy regulations which should not exist, and
>many judicial regulations which should not exist. Red tape is a function
>of regulations, not freedom.

I'm not sure how to argue this.  I know some of the bankruptcy
laws are out of date, or at least don't allow creditors to remove
bad management.  There should be reform.  However, bankruptcy laws
exist to protect people who lose their shirts because of events
outside their control.  They shouldn't be tossed out.

However, I'm not an expert on this.  I'm not sure if you are, either,
from the pure antagonism to any sort of regulation you display here.
Try to convince me, at least, instead of just waving your hand and
Newsgroups: alt.politics.elections