Response: Uphaar and Strict Liability

Gaurav asks

O Chief Heretic,

If I were to substitute “road safety” in place of “fire safety” in post of yores, would I be making a mistake ? If yes, then what is the mistake ? If no, does it mean that there is no requirement of road safety regulations[?].

Why, yes. The logic will apply there too. The owner of the road will be criminally liable for badly maintained roads and unclear signs. If an accident occurs, the victim can sue the owner and the court will impose strict liability on the owner.

Of course, accidents can occur because of bad drivers as well as due to bad roads. The owner of the road can, and should, minimize his liability by enforcing rules of the road on drivers. By driving on roads, you are entering into an implicit (or maybe explicit) contract with the owner of the road that you will follow the rules. Violation of those rules will also expose you to civil and criminal liabilities.

Needless to say, all this was in the libertarian dream world. In the real world, government is both the rule-maker and the player-by-the-rules, an unfortunate situation.  I am not free-market fundamentalist enough to believe that Government-controlled roads can only lead to serfdom, but nonetheless, it is useful to separate the two conceptually to understand the distinction better.  It was implicit in the previous post that the theatre-owner can and should impose fire-safety norms on patrons and employees to minimize his own liability – if he weren’t allowed to, the preventive value of Strict Liability would be lost.   When the government is in the same position as theatre-owners, it should have the same powers and the same obligation.

Having said that, there remains the open question of what traffic rules we should impose. Should we impose preventive rules or should we punish people after harm is done? Should we punish rash driving or punish people only when said rash driving causes accidents? Should we do random checks for drunken drivers or punish them only if they drive rashly?

Here we get into the realm of cost-benefit analysis. Rash drivers cause annoyance to other drivers even if they do not actually cause accidents, so we should punish them. Punishing drunk drivers seems like a good idea to prevent future accidents, but the cost of setting up a barricade to stop and check alcohol levels of drivers is the cost that could have been spent on catching drivers speeding through a red light. Which prevents accidents better and which makes driving a better experience? In the absence of a market telling us the “truth”*  we have no good way to know. But we should make every attempt to try, preferably by setting up quasi-market situations. If we don’t, we will have the kind of situation we have in Hyderabad, where the police never catch you for jumping a red light, but waylay you if you don’t wear a helmet while riding.

*As Tim Harford explains very well in The Undercover Economist.

One thought on “Response: Uphaar and Strict Liability

Comments are closed.