With oil still spilling into the Gulf, the issue of BP’s (and Transocean’s) culpability is being discussed by policymakers in Washington and the states. I wrote about the lessons we should take from the oil spill awhile back over at the Independent Forum. Among other points, I argued that Congress should not retroactively increase BP’s liability for the spill (as the Obama Administration is proposing).
That said, I don’t think BP’s liability should have been curtailed by Congress in the first place. As libertarian writer Sheldon Richman points out, weak and poorly administered government regulations and liability protections are part of the corporatist model that America is increasingly pursuing. This is not free market capitalism!
As Richman points out:
Those who see “tougher” government regulation as the answer are evading some formidable objections. First is the knowledge problem. Empowering regulators to prevent the next disaster tells us nothing about how they would know what to do without imposing costs that would dwarf any benefits.
Second is “regulatory capture.” Regulators and the industries they oversee develop mutually beneficial relationships that would appall those who idealize regulators as watchdogs. The rules that emerge from those relationships tend to foster more monopolistic industries.
Accidents happen, but they’ll happen less often and be less severe if the responsible parties are truly held responsible. Read Richman’s full article on BP and Transocean here.