When did you stop beating your wife?

[The following is in response to a student’s criticism of capitalism because companies have no concern for safety. He cited the seat belt law, which “kooky” libertarians oppose. Where would we be without government regulations? It’s a common baiting tactic used on those skeptical of government’s beneficence. Here is my answer]

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Dear Concerned:

The seat belt question always comes up. It is akin to the “when did you stop beating your wife?” question because it is designed to trap any defender of freedom in a no-win situation (look at those libertarian kooks!).

The question presumes that government “gives” us safety. For two years, I researched voluntary business efforts at enhancing safety and trust. Invariably, these safety measures were driven by self-interest and preceded government action by years, if not decades. In fact, most safety regulation emanates from the private sector and government does not intervene.

Cases:

UL (Underwriter Labs), est. 1894 by fire insurance companies. Now tests more than 100,000 products/year. If an electrical appliance or other good doesn’t get UL certified, no retailer will sell it. When electrical appliances hit the market they had a nasty side effect: they caused fires! Fire insurance companies were losing a lot of money so they created UL, which later expanded to other industries. It’s an amazing, unsung story we live with every day but doesn’t make the history books like the government agencies that (supposedly) came in to save the day in the 1970s (e.g., OSHA). Side note: In the communist Soviet Union, the government regulated electrical safety and people were glued to their TV sets. Why? Because if you weren’t careful the bulbs heated up and caught on fire! I’m not kidding. See http://www.ul.com/about/

National Safety Council: est. 1913. Again, created by for-profit interests for similar purposes. Congress chartered it in 1953: http://www.nsc.org/aboutus.htm

Better Business Bureaus: first grassroots network of bureaus handling customer complaints, innovating with arbitration (all car complaints go to a BBB branch). This started in the 1910s. Why? Because businesses realized that the bad apples gave a trade a bad name, or they realized that for every happy customer speaking of the company, the unhappy customers told 10X as many people!

Dun & Bradstreet: Banks were very insecure in the mid-19th century onward. One reason was that bankers could not judge the credit rating of a firm or individual. Did someone pass a law? What would a politicians come up with? Voila! Lewis Tappan, a laissez-faire businessman and leading abolitionist (Amistad), developed a network of correspondents that became D&B. Banks were still screwed up in many places but that was mostly because of idiotic populist/progressive bans on chain banking, something we will discuss later in the semester. See Scott Sandage, “Central Intelligence Agency,” chap. in Born Losers: A History of Failure.

I could go on and on. Even the seat belt example is on point: Is there a government agency that invents safety devices like seat belts? No. Car companies developed it—and boasted of it. If anything, the tiny, underfunded FDA’s of the world STOP people from saving their own lives. Creating a FDA or OSHA is easy, but funding it is unpopular (passing the law was symbolic, you know). But, then, all too often, private business or nonprofits are left waiting for the government to “approve” some advance in safety or survival rates.

There is a large literature on this topic but it doesn’t fit the neat textbook picture: “Things were bad then (people beat their wives, businesses were satanic), things are better now. It must be because government grew.” The old post hoc ergo propter hoc fallacy (“after this, therefore because of this”).

That’s my short response. Watch your UL-approved TV for the next ad boasting of safety features (Mac does it, car companies do it, even educated bees do it).

dr. b.

Postscript: This web site chronicles, in reverse order, developments with seat belts and air bags—all developed and promoted first by companies and the National Safety Council.

By the time the NHSB required seat belts of a certain standard, they were already in American cars! Note that Ford then developed an experimental air bag, andonly later did the government require its use. Indeed, most of the government mandates are on PEOPLE, not companies. Companies, of course, cannot force their consumers to do things, only government can.

So, my friend, drive safely!