Profit motive

Reader comment on: Infantino Baby Sling Recall

Submitted by benjamin Geballe (United States), Mar 24, 2010 20:36

You sure are putting a lot of faith in the profit motive to keep companies honest. There are probably more examples of the profit motive leading to dishonest behavior that harms or steals from the consumer (see mortgage backed securities). The regulatory state exists for a reason. Regulations limit the number of lawsuits. If every time a person died after taking a drug, the case would end up in court, for years. This is enormously expensive for both parties, and would limit the ability of anyone who cannot afford representation from being protected or having their problems addressed, not to mention the chilling effect on corporations when making the decision of whether to bring a drug to market. By regulating products, the government sets standards for industry. If the industry lives up to those standards then it is able to avoid litigation. In many cases, regulations actually serve to protect industry, and industries have been known to hide behind regulations. The airline industry is protected from lawsuits in most crashes because of FAA regulation. Conservatives rail against trial lawyers in the healthcare industry. If we had clearly established standards of care, we could eliminate most lawsuits over healthcare, leaving only issues of negligence (similar to the airline industry). I suppose one could argue an even more extreme position, that people should not be able to sue a company that is responsible for harming them. That does not sound like a world in which I, or even a radical like Senator Coburn would want to live.

The most powerful argument against eliminating the regulatory state is to observe in history the times when regulations were most lax and what society was like. What does futureofcapitalism consider to be the golden age of lax regulation? The turn of the century in the US? Medieval Europe?

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