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Free markets when supported by strong property rights can have strong protections to prevent harm or pollution. Non free markets, although regulated, don't nec

by 13years 11y ago

Free markets when supported by strong property rights can have strong protections to prevent harm or pollution. Non free markets, although regulated, don't necessarily perform better and can even perform worse in this regard. The FDA is a great example of an agency which often can be seen to work harder to protect the industry than the individual. For example, look up the story of Vioxx. A drug which killed 50k people, passed all FDA processes and when the manufacturer was caught hiding data showing this would happen the product was not even removed from the market as that would have opened the door for lawsuits against the manufacturer.

rayiner 11y ago
Proving causation in toxic torts make it pretty much impossible to hold companies accountable. Moreover, both judges and juries strongly side with companies, who create jobs. At best these cases settle for 5-10% of the damage caused, which make them a small tax on this destructive conduct.
makomk 11y ago
I think this article demonstrates why that doesn't actually work in practice. DuPont contaminated several counties with a toxic chemical over the course of a decade, affecting many people's property, yet because the owners didn't even know to test for it and weren't in a position to prove that it was dangerous, let alone prove that it had harmed them specifically, DuPont got away with this.
- 13years 11y ago
  Possibly, but it would seem to nonetheless also demonstrate why regulation also doesn't work in practice. From the article. "...THE FEDERAL TOXIC SUBSTANCES Control Act requires companies that work with chemicals to report to the Environmental Protection Agency any evidence they find that shows or even suggests that they are harmful..." What many people don't realize, is that EPA and FDA rely on the trust of the private industry to submit accurate test data. This was the same issue with Vioxx. People don't know to test also because they assume these agencies are protecting them. If property rights had more of a role, then there would be a greater call for testing and likely there would be more testing services available due to demand. From article. "... If these polluters were ever forced to clean up the chemical, which has been detected by the EPA 716 times across water systems in 29 states, and in some areas may be present at dangerous levels, the costs could be astronomical..." I doubt this will happen, since the regulatory agencies attempt to prevent harm to the industry. A proponent of property rights would have no issue with the companies paying for every bit of damages and cleanup no matter how much damage is done to the business even if it must be shutdown. Another example of EPA being aware of a problem and siding with industry against the individual http://www.ewg.org/research/free-pass-oil-and-gas/oil-and-gas-industry-exemptions http://www.ewg.org/research/free-pass-oil-and-gas/oil-and-ga... An example case in Canada where property rights did work http://environment.probeinternational.org/1993/07/17/how-they-killed-our-rights-clean-water/ http://environment.probeinternational.org/1993/07/17/how-the... This is a good reference on the history of environmental policy. In an interesting section here, the book states how property rights in the US were purposely weakened to allow for pollution. https://books.google.com/books?id=ZqRjI6JcgrMC&lpg=PA127&pg=PA126&hl=en#v=onepage&q&f=false https://books.google.com/books?id=ZqRjI6JcgrMC&lpg=PA127&pg=... What I would like to see is a return to stronger enforcement of property rights by default and supplemented as necessary by agency regulation.
  - specialist 11y ago
    So the fix for regulatory capture is to abolish regulations? https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
ethbro 11y ago
I think some of this is related to a certain FDA schizophrenia. My take it that at some point it was decided that it was more efficient / cheaper / better for the FDA to act as a gatekeeper for the public. I.e A very effectiveness initial scrutiny process for the FDA to say "This is safe, you can sell it to the public" (for drugs at least, and food-related chemicals; I'm admittedly unfamiliar with the tox standards applied to commercial or industrial chemicals) but little done for subsequent discoveries. Maybe part of that is confirmation bias. "But we ran this chemical through our initial process and it tested as safe. How could it not be safe?"
tzs 11y ago
> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution Only in limited circumstances. The problem with the property rights approach is that for much pollution there is no way to figure out who was responsible for releasing it.
knowaveragejoe 11y ago
> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution. Can someone explain how this is supposed to work? I don't mean to sound rude/biased but this sounds like one of those cases where the theory is sound but when it meets with reality we get unpredictable(and sometimes disastrous) results.
- rayiner 11y ago
  People who have no money are supposed to sue DuPont and pony up the money to pay lawyers and experts to prove that DuPont's emissions were harmful and caused their injuries. Then if they lose, because that's hard to prove, they're supposed to pay DuPont's legal fees and costs.
  - dreamdu5t 11y ago
    Lawyers put the money up for a cut of profits. If legal claims could be sold then someone else could buy the claim itself and class action wouldn't be the only recourse for the poor.
    - rayiner 11y ago
      Lawyers who work on pure contingency settle cases for pennies on the dollar because they can't afford the risk of going to trial. Especially in toxic tort cases, where the experts are expensive and the burden of proof is much higher than what science can easily satisfy (more likely than not, the injury would not have happened but for the defendant's conduct). Legal claims can be and are sold to entities that aggregate them and bring the lawsuits themselves. That's probably better than the class action system but still leaves victims getting a fraction of their damages and perpetrators paying for only a fraction of the costs. Another libertarian-ish solution to toxic torts, which I've never seen espoused, is to simply recognize that pollution is a form of violence and make it illegal. Then, people who want to pollute could transact with the potentially affected parties to pay them to shift onto them to bear the risk of harm from pollution.
  - tzs 11y ago
wylee 11y ago
> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution. This seems to imply that such markets aren't actually "free" since they're regulated via the enforcement of property rights.
phkahler 11y ago
>> A drug which killed 50k people The one I saw said it raised the death rate in the US by 100k per year for 5 years, after which there was an equal drop in the death rate. The rise was also in the age range of people most likely to take it.
mikeash 11y ago
The problem with pollution is that both emissions and harm can be extremely diffuse. If ten million vehicles are polluting the air breathed by twenty million peoples, who is supposed to sue whom? I can't very well sue every car driver in my area for one penny each.
specialist 11y ago
I'm fascinated by this idea of "free markets". Please, can you provide a real world example?

by 13years 11y ago

rayiner 11y ago

Proving causation in toxic torts make it pretty much impossible to hold companies accountable. Moreover, both judges and juries strongly side with companies, who create jobs. At best these cases settle for 5-10% of the damage caused, which make them a small tax on this destructive conduct.

makomk 11y ago

I think this article demonstrates why that doesn't actually work in practice. DuPont contaminated several counties with a toxic chemical over the course of a decade, affecting many people's property, yet because the owners didn't even know to test for it and weren't in a position to prove that it was dangerous, let alone prove that it had harmed them specifically, DuPont got away with this.

13years 11y ago
Possibly, but it would seem to nonetheless also demonstrate why regulation also doesn't work in practice. From the article. "...THE FEDERAL TOXIC SUBSTANCES Control Act requires companies that work with chemicals to report to the Environmental Protection Agency any evidence they find that shows or even suggests that they are harmful..." What many people don't realize, is that EPA and FDA rely on the trust of the private industry to submit accurate test data. This was the same issue with Vioxx. People don't know to test also because they assume these agencies are protecting them. If property rights had more of a role, then there would be a greater call for testing and likely there would be more testing services available due to demand. From article. "... If these polluters were ever forced to clean up the chemical, which has been detected by the EPA 716 times across water systems in 29 states, and in some areas may be present at dangerous levels, the costs could be astronomical..." I doubt this will happen, since the regulatory agencies attempt to prevent harm to the industry. A proponent of property rights would have no issue with the companies paying for every bit of damages and cleanup no matter how much damage is done to the business even if it must be shutdown. Another example of EPA being aware of a problem and siding with industry against the individual http://www.ewg.org/research/free-pass-oil-and-gas/oil-and-gas-industry-exemptions http://www.ewg.org/research/free-pass-oil-and-gas/oil-and-ga... An example case in Canada where property rights did work http://environment.probeinternational.org/1993/07/17/how-they-killed-our-rights-clean-water/ http://environment.probeinternational.org/1993/07/17/how-the... This is a good reference on the history of environmental policy. In an interesting section here, the book states how property rights in the US were purposely weakened to allow for pollution. https://books.google.com/books?id=ZqRjI6JcgrMC&lpg=PA127&pg=PA126&hl=en#v=onepage&q&f=false https://books.google.com/books?id=ZqRjI6JcgrMC&lpg=PA127&pg=... What I would like to see is a return to stronger enforcement of property rights by default and supplemented as necessary by agency regulation.
- specialist 11y ago
  So the fix for regulatory capture is to abolish regulations? https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture

ethbro 11y ago

I think some of this is related to a certain FDA schizophrenia. My take it that at some point it was decided that it was more efficient / cheaper / better for the FDA to act as a gatekeeper for the public. I.e A very effectiveness initial scrutiny process for the FDA to say "This is safe, you can sell it to the public" (for drugs at least, and food-related chemicals; I'm admittedly unfamiliar with the tox standards applied to commercial or industrial chemicals) but little done for subsequent discoveries. Maybe part of that is confirmation bias. "But we ran this chemical through our initial process and it tested as safe. How could it not be safe?"

tzs 11y ago

> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution Only in limited circumstances. The problem with the property rights approach is that for much pollution there is no way to figure out who was responsible for releasing it.

knowaveragejoe 11y ago

> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution. Can someone explain how this is supposed to work? I don't mean to sound rude/biased but this sounds like one of those cases where the theory is sound but when it meets with reality we get unpredictable(and sometimes disastrous) results.

rayiner 11y ago
People who have no money are supposed to sue DuPont and pony up the money to pay lawyers and experts to prove that DuPont's emissions were harmful and caused their injuries. Then if they lose, because that's hard to prove, they're supposed to pay DuPont's legal fees and costs.
- dreamdu5t 11y ago
  Lawyers put the money up for a cut of profits. If legal claims could be sold then someone else could buy the claim itself and class action wouldn't be the only recourse for the poor.
  - rayiner 11y ago
    Lawyers who work on pure contingency settle cases for pennies on the dollar because they can't afford the risk of going to trial. Especially in toxic tort cases, where the experts are expensive and the burden of proof is much higher than what science can easily satisfy (more likely than not, the injury would not have happened but for the defendant's conduct). Legal claims can be and are sold to entities that aggregate them and bring the lawsuits themselves. That's probably better than the class action system but still leaves victims getting a fraction of their damages and perpetrators paying for only a fraction of the costs. Another libertarian-ish solution to toxic torts, which I've never seen espoused, is to simply recognize that pollution is a form of violence and make it illegal. Then, people who want to pollute could transact with the potentially affected parties to pay them to shift onto them to bear the risk of harm from pollution.
- tzs 11y ago

wylee 11y ago

> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution. This seems to imply that such markets aren't actually "free" since they're regulated via the enforcement of property rights.

phkahler 11y ago

>> A drug which killed 50k people The one I saw said it raised the death rate in the US by 100k per year for 5 years, after which there was an equal drop in the death rate. The rise was also in the age range of people most likely to take it.

mikeash 11y ago

The problem with pollution is that both emissions and harm can be extremely diffuse. If ten million vehicles are polluting the air breathed by twenty million peoples, who is supposed to sue whom? I can't very well sue every car driver in my area for one penny each.

specialist 11y ago

I'm fascinated by this idea of "free markets". Please, can you provide a real world example?