On Thu, Jan 28, 2010 at 18:42, David B. Shemano <[email protected]> wrote: > That being said, there are two conceptual points. If you reject cost-benefit > analysis, how do you propose that the NHSTA engage in rule-making? As set > forth in the law review article, the NHSTA is not required to blindly follow > the results of a cost-benefit analysis, but is permitted to incorporate > cost-benefit analysis in the rule-making process. What is your alternative? >
One option would be to make a car that doesn't explode on rear impact. Legally, it may be enough to cover your ass by doing a c/b analysis that says it will cost more to fix the problem you've produced than human life is worth according to some abstract legal standards (even if those standards are the product of a bureaucratic agency operating in a nominal democracy--an agency which, I'd point out, is not entirely separate from the industry that regulates it), but the fact is that without the Pinto on the market at all there would be no deaths from the Pinto. I guess my alternative, among other things, would include a need to give consumers full disclosure of this dramatic safety hazard. You know, some disclosure that says, "this car is particularly prone to blowing up if you get hit from behind." Perhaps something they'd have to say in every commercial for the car, labeling it on visors, printing it on the rear bumper, etc. Because if we're saying that c/b analysis is the cornerstone of decision making, it's curious that Ford and the NHSTA didn't see this information as essential to the c/b analysis of the consumers themselves. If they knew it from the start, I don't see how they are excused from not telling the people who bought their car, "hey, you know how this car is cheap? Guess what, so is your life: if you think you are worth more than $200K, you might want to think twice about buying this jalopy." This is especially the case since I imagine there were several other cars on the market (the VW bug, for instance) that were also relatively cheap but much safer and more road tested. > Second, I don't see how you can criticize Ford unless you engage in your own > cost-benefit analysis - which is exactly what Raghu does. Ford violated no > law -- the car complied with all rules and regulations. First, didn't you say yourself that they did the study to prevent the rules from being changed? Maybe I'm misunderstanding the scenario, but if the rule was up for negotiation and Ford submitted it's c/b analysis to say, "hey this rule change might save some lives but it's gonna cost us money," [not sure what the rule change on the table was] then I don't see that as a useful definition of compliance. Obviously the rule was at least somewhat flawed if it let this rolling fire bomb through (likewise all the SUVs that are let through in the "light truck" loophole, but that's another story.) Shouldn't we be able to alter these rules--and even remove dangerous vehicles from the road, ex post facto? Even if there was nominal compliance, Ford knew it had a product that remained marginally more dangerous than other vehicles on the road. Second, I don't see why it is necessary for me to do a c/b analysis just to make the observation that, if a company knows it is endangering consumers with its product, it should really stop selling said product or fix the flaw ASAP. If the c/b analysis looks only at two options--fixing the flaw or allowing consumers who purchase the product to die or be injured in the ensuing inferno--I don't know why we can't consider a third option: having no Ford Pinto on the market. That seems to be a much higher cost proposition for Ford, but one that in your equation the NHTSA didn't seem to have the authority to contemplate. Or, perhaps, the labeling requirement, passing on this c/b analysis info to consumers in a clear, direct way. If that were a requirement, I imagine that would change the cost equation significantly for Ford and all automakers (though I admit the rollover notice on my CRV visor didn't make me pause all that much before I bought the car, still I'm glad it was there.) If we were really dealing with democratic forms that would frighten pro-capitalist libertarians at doomsday levels, then I'd suggest that, since the production of this car involved much wider social costs, the question should have been whether to produce i at all--perhaps a question best put to a vote after people had relevant information. This still doesn't solve the problem of Ford withholding or simply not knowing information, but I don't buy the argument that the NHTSA is the same thing as democratic decision making. It is a fallible regulatory agency: in China they've taken to killing bureaucrats at similar agencies if their decisions result in widespread deaths. I'm not advocating that, but it is a bit of a stretch to say that the NHTSA rules are somehow sacrosanct when you might otherwise claim that the agency needs to be 86ed in order to make way for a libertarian paradise. I can't figure out if we are talking about whether c/b is 1) good as a moral imperative (i.e. whether it is somehow analogous to every form of decision making and, therefore, right, good, necessary, etc.), 2) a pragmatic way of going about decision making among state agencies (and therefore fallible and changeable depending on circumstances--i.e. failure to include previously unknown externalities, unknown info, etc.) or 3) if it should simply be accepted as an airtight defense in class action or product liability lawsuits. I think they all seem to be bleeding into one another in your defense--at times you say that this is a model for all decision making "How can citizens in your democracy make decisions?" at other times just about making rules--rules which may be flawed and need to be altered along with the products produced under those rules (particularly when the producers KNEW there were big flaws that could be driven through the loopholes in the rules); and at other times about recusing producers from blame simply because they followed the stated rules. The last position acts like 3) is an extension of 2) but it is really appealing to 1). You shuttle between the position that says Ford is not liable--or shouldn't be liable--because it is not at de jure fault (even if it was in some de facto fault as it knew there were severe problems, just that it could get away with not fixing them) and the position that says the only way to speak about being at fault is under these rules and under the c/b analysis. >The only way you can criticize Ford (as did the jury), is to argue that the >costs of the gas tank placement (i.e. several dozen lives > lost) outweighed >the benefits (i.e. cheaper sticker price for 2 million cars). I don't think this is accurate. Aside from Shane's observation that there could have been cost cutting elsewhere, if the goal was a cheaper sticker, I insist that at the very least this sticker should have included the proposition that consumers were more likely to die a fiery death when driving this vehicle. (I'll leave to one side the externality of all the drivers who drove other cars behind Pintos who were therefore put at risk despite never having been party to the decision of whether a Pinto should be made, sold, approved or purchased--perhaps, in this sense, the cost of those deaths should have been added as a premium to the cost of the car--an actual death tax, as it were, that the drivers would have to pay. Likewise, we've left the auto insurance providers out of the equation as well as the states and localities that might have something to say about it). You've made the c/b analysis in this case only between Ford and the regulatory agency, not between the consumers who were ultimately "voting" for the legitimacy of both (in so far as this ideological proposition of market centered democracy counts them as votes) despite not having full disclosure of the risks involved--risks the company fully understood. Moreover, you've ignored the possibility that Ford knew information about the volatility of the car than it disclosed to the NHTSA and/or that it knew the danger of its product was such that it could still be squeezed through the rule making process, hence it could be exception that proved the rule inadequate: in the meantime it could reap some rewards. > If Mr. Mage and the other on this list who complain that c/b analysis cannot >be done even theoretically and/or cannot be done in reality, then I don't see >you can rationally criticize Ford if Ford did not engage in a c/b analysis and >relied upon its compliance with the rules and regulations. > I think it is the fact that you are making the case for 1) above while appealing to a tort judgement at 3) and acting like you are appealing to 2) against the list's idealist impulses; in this tort judgement, the c/b analysis seems to be little more than ideological cover for what was obviously a more complex decision--and a decision that the most important actors (the people who were eventually driving the car and the people around them were not party to and would, perhaps have had a different understanding). I think the fact that you see all safety testing as inherently analogous to a c/b analysis is indicative of the blinders you have on the subject. Safety testing should be about the safety of the product first and foremost. Thinking of this only in terms of a c/b analysis is a Coasian fantasy about how the world works. People don't regularly have the cold calculating ability to lay themselves on an actuarial table and the system of production in place increasingly encourages and relies upon them to make irrational decisions based on emotions, insecurities, and making the best of desperate circumstances (i.e. this crap is cheap!) And even in this case, they weren't given that information before the fact. In any case, the ideal we are pressed towards in accepting c/b as valid both de facto and de jure, is that people should be forced to accept the consequences of every decision AS IF they had this cold calculating logic, full information, full rational capacities to make decisions according to it, and complete social and material freedom to make every decision. If we are really only talking about c/b analysis at 2)--as a pragmatic kind of rule making--then I'd submit that this is always already a fallible process, often failing to take into account previously misunderstood externalities (and usually taking place under situations of information asymmetry). But I don't think it really is about 2), which is what I sense Jim and Michael presume as well: it is about 1) in the service of excusing profit-seeking negligence and making privatized understandings of valorization sacrosanct. By extension this makes 3) true while placing all the blame on institutions at 2). By placing the blame at 2) it is meant to focus the scorn we might feel at private actors solely at the feet of public agencies that failed to comprehend what those private actors were doing--or failed to properly police them in the eyes of the public. In other words, it is a perfect libertarian parlor game meant to show us that regulation is hopeless unless we make all regulation ultimately based on the valorization of the market (something Coase was excellent at), disposing with regulation agencies completely and instead relying solely on c/b analysis up and down the decision chain. The only problem with the absolute removal of 2), in the eyes of the industries regulated is that this would remove the ideological cover of 3) which I would argue is currently essential to the popular acceptance of 1). All this purportedly realistic analysis is meant to do is to increase the popular animosity, cynicism, and apathy towards regulatory agencies in general, making it more certain that the main actors involved in pubic policy making the regulators and the industry, i.e. everyone but the public. s _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
