Some economists seem to believe that all behaviour is controlled by economic priciples. I'm starting this column where last weeks left off. I think this a little too mechanistic.
People often respond to other motivations.
If the cheapest way to get rid of a waste product is to spill it in the river, then that is what they will do with it. If future profits can best be enhanced by peddling cigarettes to kids, then that they will do and increase the addictive content and lie as much as they can get away with. So we find competition to be insufficient to protect the public interest and pass laws and regulations. If you look at the history of pollution control legislation and the ongoing fight with tobacco companies it is evident that regulation is a lengthy, difficult, imperfect process. Regulation of electric utilities is a good example of trying to control an industry where economics result in a business model which cannot be depended on to perform in the public interest.