From: solman@athena.mit.edu (Jason W Solinsky)
Subject: Re: Regulations
Organization: Massachusetts Institute of Technology
Distribution: usa
Date: Sun, 12 Apr 1992 11:52:50 GMT

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.

|> 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.

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.

What should be done is to allow the market to handle things. This would cause
one of two things (that I can see, there may be more) to happen.

1) An agency is set up to provide information to workers on f(c). In exchange for
this information, workers pay a certain fee. It is likely that this service would
eventually be offered for free by companies interested in selling workers
insurance against such disabilities and fatalities.

2) Companies find that they can decrease what workers think f(c) is by offering
them disability insurance in b. This makes them think the workplace is safer.
Aftyer doing this, the company will find that the cost of including diability
insuracne in b will go down if they make the workplace safer adn less of a risk
for the insurance company.

|> 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.

|> >  If we had no health codes in restaurants, I would still be able to do everything
|> >  I can do now. The restaurant owners and would have more freedom.
|> 
|> See above.  You walk into a new restaurant.  You get sick, and die (a
|> bit extreme).  Your dead.  What can you do?  I'm sure not going to
|> experiment with new places.

If there are no health regulations, then agencies will pop up which certify that
restaurants are clean for a fee. Customers should only go to restaurants which
are certified by agencies they trust. Chances are that the most dsuccessful such
agencies will offer insurance against anything unhealthy happening in restaurants
which they certify. We have such an agency today. The problem is that the
government runs it. As a result is highly inefficient, and is racked with a
scandal every couple of years. People who get scared because of these scandals
don't have anywhere else to turn because there are no other agencies. The reason
why is because the government run agency is kept afloat by taxpayer money and
doesn't charge anything, so others can't compete.

|> We're arguing that death may result THROUGH NO FAULT OF YOUR OWN.
|> Is it your fault if a crane topples on your car, while you're
|> sitting in it?  You're dead.  Your relatives can sue.

That's how it is today. Everytimne you go anywhere or do anything, there is a
finite chance that it will kill you. What's your point?

|> How about (on a less lethal note) AT&T, Sprint & MCI getting together
|> and saying, hmm, let's jack up the phone rates.  No one's stopping us.
|> Is it my choice to pay extortion for services?  
|> Is this the type of freedom you keep repeating like a mantra?

The phone companies and the monopolies that the local companies still have were
created by government regulation and are deplurable. Today, however,
long-distance calls have been freed from this and there is considerable
competition. The answer to you question is that if the big three long-distance
phone companies jack up their rates, they will lose their market share and some
of the twnety other long distance phone companies in the USA will increase
theirs.

Jason W. Solinsky
Xref: sparky alt.politics.british:9 soc.culture.british:6214