Tuesday, August 16, 2011

"Small Government" Made the Tragedy at the Indiana State Fair More Likely

An article in today's Indianapolis Star (here) observes that, in contrast to many other states and cities, neither the State of Indiana nor the City of Indianapolis regulates or inspects concert stages in any way because they are not considered "structures," no matter how large and heavy they are.

In other cities like Chicago, whoever constructs a concert stage must provide the city with detailed calculations, including calculations relating to potential stresses from wind gusts of up to 90 mph, before the stage is constructed. In more libertarian Indiana, we have been (at least to now) willing to put up with an admittedly small risk of numerous deaths and injuries, rather than raise the costs of entertainment on the supposition (similar to former Fed chairman Alan Greenspan's supposition that the financial markets would regulate themselves) that providers of concert facilities would take adequate precautions against what in fact happened in Indianapolis this past week. Of course, concert stage providers are subject to post hoc lawsuits; if a court determines that they failed to take "reasonable" precautions, they may be financially liable to those who were killed or injured - small comfort for those who lost loved ones in the tragedy, but a potentially valuable corrective for future concert-goers.

Indiana Governor Mitch Daniels, who responded emotionally to the tragedy, is a libertarian, who tends to think that more government inevitably is worse government. I wonder how he'll respond to legislative efforts that will surely be forthcoming to create a regulatory and inspection regime for concert venues in Indiana. Such regimes inevitably restrict market freedom, raise costs of doing business, and don't always lead to better outcomes. On the other hand, had such a regime been in place, it is significantly less likely (although the probability always remains above zero) that five people would have been killed and dozens more injured. What's the aggregate value of those lost lives and injuries, compared to the "regulatory burden" imposed on industry? That's not a question a dedicated libertarian would even ask. However, I'm a social-welfare consequentialist (which is hardly inconsistent with a large amount of liberty), rather than a strict libertarian.

What about Mitch Daniels? Well, he's certainly more of a libertarian than am I, but there seem to be limits to his libertarianism. Witness another headline in today's Indianapolis Star (here), with the title, "Governor sees hope for state smoking ban."

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