Markets vs. regulation: Lessons from the tragedies in Texas and Bangladesh

Gee, something exploded in Texas so it must be a lack of government at fault, but when something explodes in California it must be caused by corporate greed, even if the explosion came at a government-sanctioned monopoly business. These simplistic arguments divert our attention from productive ways of making our lives safer and better.
Bangladesh is a different story. That tragically poor nation does have many rules and regulations regarding buildings and most other things, but few people follow them. The people there can’t afford to do so. One finds strictly enforced building codes in wealthier nations, but those codes followed the wealth; they aren’t the cause of it. As nations become wealthier they have more money to invest in things such as safety.

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When people can barely feed, house, or clothe themselves, they don’t worry as much about things such as, say, second-hand smoke or improper Americans with Disabilities Act regulations. Poorer societies, for instance, are always more polluted than wealthier ones. As they become wealthier, pressure builds for cleaner skies and better water supplies – and for tighter codes for buildings. The answer isn’t to impose tougher rules on poor nations. If Bangladesh adopted Japan’s notoriously tough building requirements, it wouldn’t change anything. People in Bangladesh don’t have the money to rebuild their nation’s stock of buildings.

The best way to improve public health is to reduce poverty. Free markets – not government edicts – are the only way to accomplish the vast improvement in wealth that is a precursor to the better environments we all crave. Note that the current building codes are so inflexible that they stifle innovative building designs that will provide further safety and environmental enhancements.

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