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Horrible. This is what's so scary about the free market and our current chemical regulations of innocent until proved guilty.

People cover up, even the biggest most "professional" here (DuPont), and the public gets decades of abuse.

Why is it that medication requires FDA approval with lots of animal/human tests before you can sell it, but chemicals do not? Here the tests internally done showed prove of issue year after year, and would have been a big red flag.




Free markets when supported by strong property rights can have strong protections to prevent harm or pollution.

Non free markets, although regulated, don't necessarily perform better and can even perform worse in this regard. The FDA is a great example of an agency which often can be seen to work harder to protect the industry than the individual. For example, look up the story of Vioxx. A drug which killed 50k people, passed all FDA processes and when the manufacturer was caught hiding data showing this would happen the product was not even removed from the market as that would have opened the door for lawsuits against the manufacturer.


I think this article demonstrates why that doesn't actually work in practice. DuPont contaminated several counties with a toxic chemical over the course of a decade, affecting many people's property, yet because the owners didn't even know to test for it and weren't in a position to prove that it was dangerous, let alone prove that it had harmed them specifically, DuPont got away with this.


Possibly, but it would seem to nonetheless also demonstrate why regulation also doesn't work in practice.

From the article. "...THE FEDERAL TOXIC SUBSTANCES Control Act requires companies that work with chemicals to report to the Environmental Protection Agency any evidence they find that shows or even suggests that they are harmful..."

What many people don't realize, is that EPA and FDA rely on the trust of the private industry to submit accurate test data. This was the same issue with Vioxx.

People don't know to test also because they assume these agencies are protecting them. If property rights had more of a role, then there would be a greater call for testing and likely there would be more testing services available due to demand.

From article. "... If these polluters were ever forced to clean up the chemical, which has been detected by the EPA 716 times across water systems in 29 states, and in some areas may be present at dangerous levels, the costs could be astronomical..."

I doubt this will happen, since the regulatory agencies attempt to prevent harm to the industry. A proponent of property rights would have no issue with the companies paying for every bit of damages and cleanup no matter how much damage is done to the business even if it must be shutdown.

Another example of EPA being aware of a problem and siding with industry against the individual http://www.ewg.org/research/free-pass-oil-and-gas/oil-and-ga...

An example case in Canada where property rights did work http://environment.probeinternational.org/1993/07/17/how-the...

This is a good reference on the history of environmental policy. In an interesting section here, the book states how property rights in the US were purposely weakened to allow for pollution. https://books.google.com/books?id=ZqRjI6JcgrMC&lpg=PA127&pg=...

What I would like to see is a return to stronger enforcement of property rights by default and supplemented as necessary by agency regulation.


So the fix for regulatory capture is to abolish regulations?

https://en.wikipedia.org/wiki/Regulatory_capture


Proving causation in toxic torts make it pretty much impossible to hold companies accountable. Moreover, both judges and juries strongly side with companies, who create jobs. At best these cases settle for 5-10% of the damage caused, which make them a small tax on this destructive conduct.


> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution.

Can someone explain how this is supposed to work? I don't mean to sound rude/biased but this sounds like one of those cases where the theory is sound but when it meets with reality we get unpredictable(and sometimes disastrous) results.


People who have no money are supposed to sue DuPont and pony up the money to pay lawyers and experts to prove that DuPont's emissions were harmful and caused their injuries. Then if they lose, because that's hard to prove, they're supposed to pay DuPont's legal fees and costs.


And if you do win, all the Court can do is make DuPont write you a check.

That check will almost always be for far less than the answer you would have given before the injury to the question: "How much money would I have to give you to allow me to cause this specific injury to you?".


Lawyers put the money up for a cut of profits. If legal claims could be sold then someone else could buy the claim itself and class action wouldn't be the only recourse for the poor.


Lawyers who work on pure contingency settle cases for pennies on the dollar because they can't afford the risk of going to trial. Especially in toxic tort cases, where the experts are expensive and the burden of proof is much higher than what science can easily satisfy (more likely than not, the injury would not have happened but for the defendant's conduct).

Legal claims can be and are sold to entities that aggregate them and bring the lawsuits themselves. That's probably better than the class action system but still leaves victims getting a fraction of their damages and perpetrators paying for only a fraction of the costs.

Another libertarian-ish solution to toxic torts, which I've never seen espoused, is to simply recognize that pollution is a form of violence and make it illegal. Then, people who want to pollute could transact with the potentially affected parties to pay them to shift onto them to bear the risk of harm from pollution.


In Economics, the Coase Theorem[1] predicts close to this outcome, although it speaks to efficient outcomes and not necessarily harm reducing outcomes. When strong property rights exist (and it is feasible for all parties to negotiate), then parties may reach an efficient allocation of resources regardless of how the resources were initially allocated.

To use a typical example, imagine a train track runs through a farmer's land and sparks from the train sets the farmer's wheat on fire, causing monetary harm. If the train company owns the tracks, then the farmer should be willing to pay to put spark guards along the tracks to protect his crop. Alternatively, if the farmer owns the tracks, the train company should be willing to pay for the damage to the crop to ensure that it can continue to operate.

In practice, there may be costs associated with negotiations (e.g. lawyers), it may be infeasible to negotiate between all parties (e.g. if there are many farmers affected), or property rights are not sufficiently strong for one party to bar another from producing negative externalities, all of which can lead to failures of the theorem.

[1] https://en.wikipedia.org/wiki/Coase_theorem


The sparking train analogy fails because it supposes a single obvious entity causing a large amount of damage to a single person.

To modify the analogy to fit the real-world situation, it would be more like if there were a million train tracks going all over the place, and the sparks from each train falls on millions of wheat fields, such that everyone lives in a diffuse cloud of sparks, and no single fire can be blamed on any individual train, and the harm from any single train is relatively small, even though the collective effect is extremely damaging.

The Coase Theorem assumes that transaction costs are negligible. In a many-to-many situation like real-world pollution, transaction costs necessarily become prohibitively large, because you basically have a quadratic explosion of connections between polluters and victims (many of whom are also polluters!).


Just wanted to point out that you restated what was said in the parent.

>In practice, there may be costs associated with negotiations (e.g. lawyers), it may be infeasible to negotiate between all parties (e.g. if there are many farmers affected), or property rights are not sufficiently strong for one party to bar another from producing negative externalities, all of which can lead to failures of the theorem.


Yes, I was just trying to reinforce and generalize that, not try to argue anything.


Gotcha


And, sorry, I probably could have made that a little more clear! Like it or not, the default on the internet is often to assume argument.


So is your example meant to illustrate the need for us to filter our drinking water and air if we live on the same planet as a DuPont plant?


>>Free markets when supported by strong property rights can have strong protections to prevent harm or pollution.

>Can someone explain how this is supposed to work? I don't mean to sound rude/biased but this sounds like one of those cases where the theory is sound but when it meets with reality we get unpredictable(and sometimes disastrous) results.

The example is meant to illustrate the mechanism being asked about by the parent (quoted). Nothing was said about filtering air and water in the example.


But it's implicit that if the train throws sparks(DuPont plant pollutes the air and water on the entire planet) that the most equitable thing for me to do as the farmer would be to build spark guards(filter my air and water no matter where I live). That way I can prevent my fields from catching fire(increased risk factors from Teflon surfactants).


so... the farmer gets screwed?


The farmer may achieve a more favorable outcome if assigned the property rights, but the Coase Theorem aims to address the notion of efficiency. In an efficient market, no party can be made better off without another being made worse off.


A couple of reference for further reading on the subject.

"...if a product polluted the air, victims could sue the product maker, who in turn would pass the costs of restitution onto the consumer. Higher prices would discourage use and decrease pollution..." http://www.ruwart.com/environ2.lpn.wpd.html

The only reference I know of in modern time where property rights were actually used was in Canada. Look up Terence Corcoran and clean water. He produced a documentary how Canada's waters have become polluted after property rights were abolished in 1955.

This is a good reference on the history of environmental policy. In an interesting section here, the book states how property rights in the US were purposely weakened to allow for pollution. https://books.google.com/books?id=ZqRjI6JcgrMC&lpg=PA127&pg=...


> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution

Only in limited circumstances. The problem with the property rights approach is that for much pollution there is no way to figure out who was responsible for releasing it.


I think some of this is related to a certain FDA schizophrenia. My take it that at some point it was decided that it was more efficient / cheaper / better for the FDA to act as a gatekeeper for the public.

I.e A very effectiveness initial scrutiny process for the FDA to say "This is safe, you can sell it to the public" (for drugs at least, and food-related chemicals; I'm admittedly unfamiliar with the tox standards applied to commercial or industrial chemicals) but little done for subsequent discoveries.

Maybe part of that is confirmation bias. "But we ran this chemical through our initial process and it tested as safe. How could it not be safe?"


>> A drug which killed 50k people

The one I saw said it raised the death rate in the US by 100k per year for 5 years, after which there was an equal drop in the death rate. The rise was also in the age range of people most likely to take it.


The problem with pollution is that both emissions and harm can be extremely diffuse. If ten million vehicles are polluting the air breathed by twenty million peoples, who is supposed to sue whom? I can't very well sue every car driver in my area for one penny each.


> Free markets when supported by strong property rights can have strong protections to prevent harm or pollution.

This seems to imply that such markets aren't actually "free" since they're regulated via the enforcement of property rights.


I'm fascinated by this idea of "free markets". Please, can you provide a real world example?


Chemistry is far from being a free market. There are tons of regulations before you can produce anything in developed countries. The issue is rather that fines are too small and regulators can be easily bribed. You need an independent justice system more than anything else.


> This is what's so scary about the free market and our current chemical regulations of innocent until proved guilty.

I get your point, but the situation is not much better in non-free markets as well. Regulators have a price for which they can be captured.


The solution IMHO to have a climate of non-corruption (US) generally combined with enough pay already for regulators to not be easily swayed, and hopefully hire people who have different motivators than money in life, and actually jail for real people who violate this (too many abuses, particularly on Wall Street, go by without the true punishment it deserves).

Despite existing corruption, I do believe the FDA is less corrupt than it is corrupt, and for the most part they do have the public good as their primary interest.

My free market comment was more about this theory of self-regulation and trust. Clearly that gets violated time and time again, and here is yet another case to the point of knowingly harming their own employees for decades!

The bigger issue is this non-regulatory environment for so many chemicals. Innocent until proven guilty, especially for thousands of drugs already popular when regulations were enacted (in the 60s?), is just irresponsible. The list of drugs in the blood of the entire pollution just keeps growing... How long before we realize the permanent harm potential?


It is worse. Look at the Soviet Union or China.


You are correct, but "regulatory capture" refers to a different form of corruption than what you are talking about.


[deleted]



Sorry, I deleted my post when I re-read the story. Still, it's not clear that the levels in the products were enough to have harmful effects, the problem was really the lack of care handling it in the plant, and the unsafe disposal.




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