<I>PGE is considered directly responsible for >$40B in fire damage in California.</I>
<p>That (officially sanctioned) conclusion was in complete disregard of the state and federal gov’t contribution. But I would agree with you that it’s an example of similar phenomena. Probably not for the same reasons.
IMHO regulation, the phenomena of regulatory capture, and the implementation of regulatory compliance bureaucracy within PG&E resulted in private sector bureaucrats drunk on power imposing government-supported misfeasance with unintended consequence...With a organization like PG&E it’s difficult to discern the boundary between the state and the corporation. Modern government enthusiasts dream of ways to impose more perfect order using the power of government, not realizing the emergent imperfection is a consequence of such aggrandizement.
Regulatory capture blurs the line between government and industry. There’s no fantasy about it. The power is suborned, not eliminated. However I was pointing out the phenomenon as a precursor to enabling petty corporate bureaucracy empowered with government authority.
With respect to your comment, are we supposing regulatory capture is never a responsible corporate behavior? I’m not sure how we must conclude that responsible corporate behavior necessarily follows from and is solely dependent upon the exercise of regulatory power.
It is clearly possible, in principle, for a corporation to behave responsibly if its officers really want to and its board permits it. A corporation whose management wants it to do something responsible doesn't need a regulator to tell it that must. They can just do it.
What else, then, would lead it to choose to capture a regulator? To force its competitors to behave responsibly too? To force its future self to behave responsibly? Can you identify any single instance of either ever occurring?
Whatever may be possible, what we have seen over and over again is, instead, corporations capturing regulators and then hamstringing every effort to enforce any sort of responsible behavior.
Automobile manufacturers fought tooth and nail against requirements that they provide seatbelts, and then airbags, and then pollution controls, and then crash safety. Tobacco companies fought tooth and nail against labeling requirements, and restrictions on sales and advertising to children. Boeing management lately had the FAA approve their deathtrap 737-Max, at ultimately ruinous expense to their own stockholders and to airlines suckered into buying them.
The least harmful examples I know of have been to raise barriers to entry for their industry by imposing expenses that they, but not new entrants or smaller competitors, could afford, in the form of requirements on reporting, or fabrication materials, or quality standards, or occasionally even restrictions on effluents.
We see in many states a Dairy Council that has got itself delegated authority to assess their own taxes, spent then on billboards promoting dairy products, or buying up and destroying "excess" production, invariably favoring the biggest dairies and making smaller ones less competitive. Medical, dental, legal, hairdressing, and other "associations" are allowed to maintain licensing regimes to limit competition that, sometimes, act to establish a minimum required level of competency or education, but more reliably guarantee captive income for schools and exam boards.
You certainly have made some good arguments against regulation, suggesting a near certainty of regulatory capture screwing up whatever good intentions the original premise of regulation promised.
Was that your intention? I can’t dismiss your arguments out of hand as purely fantastic.
OnTheOtherHand, viewing all regulation and regulatory process as necessarily corrupt from birth doesn’t prevent some good coming of some regulation. I don’t think you’ll find corporations participating for the sake of highlighting their own immoral or irresponsible practices targeted by said regulation…maybe something along the lines of “thank god we helped develop this regulation that will allow us to stop doing these negative things forced on us by evil competitors/fraudulent bad actors/whatever scapegoat”. In spin world, everyone’s heroic in deed and motive…
Given your arguments, you might support this thesis: the more regulation and regulatory proceedings, the more likely some corruption may be concealed within it.
Thus a corporation seeking limits to regulation is acting responsibly to limit potential corruption, regardless of motive. It also follows that anyone seeking expansion of regulation is inviting corruption, regardless of motive (aka “the road to hell is paved with good intentions”, HaHaOnlySerious).
Obviously overtly corrupt and succinct regulatory proceedings are outside the scope of this thesis. Not that I’m aware of any succinct regulatory proceedings, heheh.
InMyHumbleOpinion the libertarian perspective would view using the power of government with good intentions as fraught with unintended negative consequences. Therefore we should use a minimum of government power exercised with maximal certainty of appropriateness. If we are not unanimously and honestly certain then government should refrain from the exercise of power.
I feel I might have left out something about how being cynical about regulation doesn’t make one an irresponsible actor but then this isn’t a retelling of “Anarchy, State, and Utopia”, “The Wealth of Nations”, “Atlas Shrugged”, or maybe “The Mystery of Capital”…
We went decades without PGE systems routinely causing fires. Conditions now are somewhat different, but not that different. The important difference is PGE's maintenance policies. They abandoned that responsibility in order to deliver a dividend. They were ordered to resume, but there is a huge backlog of work.
PGE is considered directly responsible for >$40B in fire damage in California.