Tuesday, November 22, 2011

I believe in the separation of corporation and state

A friend of mine just posted the above bumper sticker on Facebook. Being insanely libertarian, you probably know what my reaction to this is: YIPPEE!!! Yes! What a great idea! Which is basically what I posted. Someone replied to my comment with the following:
Nay, I say. Government regulations on working conditions is fair. Allowing so many companies to ship jobs overseas helped to kill jobs. And [not] to mention, those nations are filled with exploited children and adults.
So I guess what the slogan probably means is that government should be allowed to control (regulate) industries, but industries shouldn't have any say in how they are regulated. This is not a goodness thing.

So here is my reply: Government regulations on working conditions is fair.

Really? Did you know that if you compare the pre-OSHA accident rates to accident rates 20+ years later you will find . . . wait for it . . . no change! Sure, there has been a drop in *overall* accident numbers, but that was due to shifting from heavy manufacturing to light industry and tech services. In the meantime these "safety" regulations have cost millions of dollars and countless jobs. Just as a ferinstance: A friend of my father's (call him Bob) worked for many years as a butcher. His skill in the trade grew, he saved money, he took business classes and eventually he remortgaged his house (at 15% interest!) and started his own meat processing business.
The first year was tough, Bob worked 70 - 80 hours a week and his family lived on his wife's salary and their credit cards, but the business survived. Then he landed a decent contract and things started looking up. By the fifth year Bob was still working 6 days a week, but the business was thriving and starting to really grow. Which is when a well-established competitor decided he was becoming a threat, so they filed some complaints with the health inspectors and OSHA. The health inspectors came in and decreed that, in the interests of food safety, all the equipment had to be upgraded (despite the fact that none of his customers had ever had problems with food-borne illness); there could be no slots or crevices to trap meat particles and all work surfaces had to be continuously flushed with fresh water. So he spent about $50,000 (mid-1970's dollars) to do all the upgrades. He lost a couple of contracts while he was upgrading, but figured he would win them back again.
Then OSHA showed up. In spite of his company's superb safety record, OSHA decreed that, in the interest of worker safety, all blades had to have guards (which are, by definition, crevices and slots) and all work surfaces had to be dry to prevent slipping. He explained the health requirements and OSHA said "We don't care. Comply or you will face $10,000 a day in fines." So Bob called the health inspector, explained the OSHA requirements, and the health inspectors said "We don't care. Comply or we'll shut you down."
So Bob lost his business, and went back to being a butcher. The drop in income coupled with the debts incurred the first couple of years meant Bob had to declare bankruptcy, so he lost his house too.
Thus "health and safety" regs destroyed a growing business, took a dozen plus jobs and cost the bank and credit card companies tens of thousands of dollars.

Oh, and another thing about regulating working conditions; getting rid of massive gov't bureaucracies would streamline the litigation process, allowing people injured by bad conditions to sue. And with gov't out of bed with corporations the regulations will no longer be skewed against individual workers holding their employers liable for accidents and injuries.

To say nothing of the fact that with the removal of regulatory barriers entrepreneurs would more easily be able to start new businesses, leading to job creation, economic growth (with consequent reduction of pollution), a burgeoning middle class and a raising of living standards all around.

Allowing so many companies to ship jobs overseas helped to kill jobs. And [not] to mention, those nations are filled with exploited children and adults.

Ah, so it is better for companies to increase their costs by keeping jobs here? Heck, why not have everything gold-plated too, that will increase production costs across the board which, according to your theory will be a good thing, right? And part of the reason it is cheaper to ship jobs overseas despite the capital costs and lower productivity? Because of those very same gov't regulations. Another ferinstance: I was reading in the Economist about a steel company that shut down in the States and essentially shipped the whole factory to China. As the facility was being put together, one of the workers who went along to help reassemble the equipment and train the new employees saw a bunch of 'extra' parts lying in a pile. Like having leftover parts after you finish fixing the sink, he figured this was a bad thing and informed a supervisor. "Don't worry" he was told, "that's just the EPA mandated pollution control equipment. It uses too much energy and slows production so we're scrapping it."

And those nations with "exploited women and children" are using the money earned from those jobs to build infrastructure and improve the overall living conditions. And as economies grow, surplus becomes available to start implementing those pollution controls again. If you look at China you will see a growing middle class starting to benefit their economy and, as standards of living rise, so do wages.

The commenter didn't even bring up what I consider to be the best argument for separation of Corps and Gov't: Think of what prying them apart will do for honesty in politics. If it is no longer possible to use your puppet legislator to pass regulations which quell competition or favor your company then it won't be worth maintaining a puppet legislator (those things can get expensive!).

See, campaign finance reform in one easy step!

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