How is punishment of the guilty ‘prevention’? The owner of some small XYZ theatre may take a risk with safety standards, assuming that due to the low probability of a fire hazard, the chances that a mishap ever happens with his theatre are minimal (even though they are much greater than the chances that a fire may be set off at some other theatre that willingly follows saftey norms). If a mishap now happens, what exactly have we prevented? [second paragraph redacted as it is already answered.]
No vaccine prevents all infections. That does not mean stop vaccination from being a preventive measure. Inspection by government officials will not prevent all fires either – indeed, given the quality of our governance, I am sure that if it weren’t for human self-interest, India would be utterly gutted by now.
The predictable response to my point would be “So let’s improve the quality of governance then!” The answer to this is: It is easier said than done. As I have argued in my Dakshina Kannada post, good governance is a luxury that people give themselves when they are aware and educated. Setting up the civic infrastructure required for a responsive government is actually much more difficult than setting up the market infrastructure. So expecting a responsive government to be a solution to the ignorance of citizens is futile.
HiAgain reminds me of the sub-prime mess. Now the problem with arguing for regulation as the answer is, it is a failure-proof answer. No matter how much regulation there is, it is never enough. The answer is always more regulation. Tyler Cowen makes a list of bank regulations already in place in the US – and after he makes the list, he realises that he has missed quite a few. And of those regulations, it turns out that two of them have actually worsened the problem, because they provide an incentive to banks to give out more sub-prime loans than is wise (in the guise of encouraging them to lend to disadvantaged borrowers.)
The problem of increasing regulations reminds me of what Joel Spolsky wrote once about Microsoft’s delivery process. Microsoft reminded Spolsky of his grandparents who took half an hour to go from the door of their house to the car. That is because after every minor or major mishap that had taken place in their lives, they had put in place a check to ensure that it never happenned again. Running through all those checks meant that getting out of the door was an excruciatingly difficult process.
for strict liability to have a useful deterrent effect, court cases would have to be cleared in non-atrocious timeframes. Which is not happening right now.
Given that strict liability is not useful without a speedy judicial system, but neither is rules/checklist-based regulation, is there a reason to prefer one over the other given the current state of the Real World?
This is in fact the right question to ask. Yes, it is true that both Strict Liability and regulation require the government to do something. If the government won’t do either, then of course there is no point talking of it. But assuming that the government can do only one, which is the better option?
The answer is that the government should focus on Strict Liability, because fixing this will involve fixing only the court system, whereas trying to fix the regulatory system will involve fixing fire regulations, earthquake regulations, regulation against volcano eruptions and every single mishap that can conceivably befall our people. From a cost-benefit point of view, there is no doubt as to which is the priority.
Also, one of the ways to speed up the court system would be to reduce the number of court cases. It so happens that the largest litigator is the government – and junking useless laws would be a great way to reduce the burden on the courts.