Libertarians and Statists on Product Safety
Commenting on the recent problems of toxic pet food and children’s toys from China, Mark Kleiman of the Reality-Based Community snarkily suggests that libertarians ought to see these events as triumphs of the unfettered market. The post basically consists of Kleiman shaking his fist at libertarians and demanding to know why our wonderful free markets haven’t solved this problem already. However, we libertarians can just as easily shake our fists at the statists and ask why their much-beloved governments didn’t prevent this from happening. If Beijing and DC answered “We didn’t want to intervene, out of respect for liberty and limited government.” then it would be (more) legitimate for Kleiman to paint these events as failures of libertarian principles; the truth, of course, is that both governments are quite willing to intervene in these matters.
Statists say that governments ought to be able to prevent this sort of thing from happening, and libertarians say markets should be able to prevent it. The fact is that in this case the toxic products did hurt consumers. Both markets and government regulators might have prevented this, but both of them failed.
The libertarian position on product safety is essentially that product safety inspection should be left to private entities. There are plenty of cases where private bodies do handle product testing, and they do it quite well. Think of Underwriters Laboratories, or the various bodies which certify organic and kosher foods. The essential function of all product-testing organizations is to convey information to the consumer. State-run product-testing bodies frequently go a step further by forcibly banning all non-approved products. Libertarians don’t like this, because it prevents people from using non-approved products, even if they are fully informed of the risks of doing so. A person might rationally do so if they think the product-testing group is inept (or just overly conservative), or in special circumstances. For example, people dying of cancer might rationally want to take experimental drugs which haven’t yet gained FDA approval.
There is one good argument for government involvement in product safety. Even if Underwriters is doing a great job testing the safety of electronics, there might not be a comparable body testing, say, pet food. Sure, the market might eventually provide one after enough toxic pet food scandals. But the statists are often right to claim that by using government we can fix the problem more quickly.
I think there is actually a best-of-both-worlds solution here. If the market hasn’t provided a pet-food-testing group, then use state funding to start one. Do not, however, prevent people from selling or buying unapproved products. The publicity surrounding the initial product safety scandal along with the blessing of the state should give the new product-testing body enough respect to shame non-compliant producers, and to encourage consumers to voluntarily avoid non-approved products. Ideally, once the group is functioning and approved products dominate the market, the product-testing group could be completely divorced from the state, and continue its mission as a private, non-profit entity.
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