A colleague at Center for a Stateless Society recently brought to my attention a story from late last year about unusually high concentrations of severe illness in the area surrounding a Crossett, Ark. paper mill. Members of eleven out of fifteen homes on Penn Road have died of cancer, and respiratory distress is common.
The local cluster of illness is controversial because the mill was owned by Georgia-Pacific, a subsidiary of Koch Industries. As a result of waste dumped in a local channel (near Penn Road) by the Georgia-Pacific mill, Crossett has one of the highest concentrations of carcinogens of any community in the United States. “Crossett crud” is the local name for the black scum on the surface of the channel, and the vapors which rise from it and drift across people’s yards.
Koch Industries’ “Koch Facts” website, in attempting to rebut the claims, repeatedly asserts that the Georgia-Pacific mill’s treatment of effluent “[meet] all limits required by our regulatory permits,” that “our emissions are permitted and monitored based on state and federal regulatory permits.” The plant is “in full compliance with the terms of the permit,” which the website describes as “protective of the river.”
This line of defense should come as no surprise. Richard Telofski, a leading consultant on combating what his corporate clientele calls “cybersmear,” advises corporations to “debunk” accusations of pollution and other malfeasance by stating that they are in full compliance with all federal and state regulatory standards.
Of course anyone familiar with the history of the regulatory state, as recounted by radical historians like the New Leftist Gabriel Kolko, will know that’s exactly what the regulations are there for. First of all, they provide an official seal of approval, much like the quality and safety codes of trade associations. But since, unlike with trade associations, individual firms are not allowed to defect from compliance with the regulatory regime, the regulations do not become an issue of cost competition between firms. The cost of compliance is borne across the entire industry, and passed on to consumers as a simple cost-plus markup.
Second, compliance with the regulatory standard — which is typically a dumbed-down least common denominator far, far below the standards of common law tort liability — serves as a safe harbor against civil litigation. The regulatory standard — which is, after all, based on (ahem) “sound science” — trumps any more stringent legal standard of liability. So long as a company’s emissions comply with the EPA’s limit on parts per billion of this or that toxic chemical, it doesn’t matter if the entire town has asthma and breaks out in painful lumps.
Finally, compliance with the regulatory standard can sometimes protect a company from even voluntary competition by other firms in an industry that choose to adhere to a more stringent standard of safety or quality. For example, Monsanto has successfully pursued court remedies in some jurisdictions against dairies and other food producers that advertise their products as free from Genetically Modified Organisms or recombinant Bovine Growth Hormone. And the big meat packers have won USDA sanctions against smaller packers that advertise their voluntary adherence to a more stringent inspection regime against “mad cow disease” than is required by law.
In all these cases, simply advertising one’s voluntary adherence to a more stringent standard than is required by government regulations is treated as “food libel” or “product disparagement.” That is, it implies that a competitor’s products that just meet the ordinary standard are inferior to one’s own, despite the competitor being in full compliance with legal reguirements (which — again — are based on “sound science”).
Despite the official mythology in the public school American history books — TR the Great Trustbuster, the Muckrakers, Upton Sinclair, and all the rest of it — the main function of the regulatory state is to protect the regulated industries.
Citations to this article:
- Kevin Carson, The Regulatory State: Behind the Myth, Deming, New Mexico Headlight, 09/30/12
Indeed. But there are two further ways in which the regulatory state serves the interest of capital. By proceeding from the assumption that a given process will employ a certain kind of technology, that being the technology, of those available, that gives the greatest advantage to scale, regulation very often effectively requires that that kind of technology be used. The result of this is that the process in question may, by law, happen at the prevalent scale or not at all. That very effectively privileges those organizations that are capable of achieving the required scale. (Furthermore, the processes in question are often such that they are problematic enough to warrant regulation derives from the scale on which they occur. For instance, the only regulated automotive tailpipe emissions, CO, HC, and NOx, are all so unstable that they would readily break down to harmless compounds in the atmosphere if their concentrations were even moderate. But the regulations effectively require the scale of operations that renders the concentrations of these pollutants severe.)
Then, the effect of all this as regards the necessity to demonstrate compliance is often more onerous than compliance itself. Again, this favours an organizational scale sufficient to justify proof-of-compliance certification to occur on an on-going basis and level of uniformity of output sufficient to render that task manageable, i.e. mass-production by a large organization. Alternative techniques might be intrinsically benign, but compliance with regulation often required putting so much effort into authoritatively stating the obvious as to make the process unviable.
My recent post The Future Machine
In a non-regulated environment, such as the taxicab industry in Phoenix AZ, (where I own a cab company, http://www.paulstaxi.com), the business owner has an enhanced incentive to perform to high levels of safety. There is no legal protection from just following the regulations, because there are none. Here, if your cab is involved in an accident, and the vehicle was unsafe to drive at the time of the wreck, you can get put out of business by a lawsuit. That is a HUGE incentive to keep the taxis in excellent running order.