Earlier this week, I caught an interview on NPR with the mayor of the West Virginia town where the chemical spill contaminated the drinking water. I got the impression that the guy is probably a Republican, because despite a few cautious hints from the interviewer, and despite his own deep anger about the situation, he refused to put the blame on Big Industry in general, nor did he say anything positive about Government Regulation.
Instead he said that the disaster was the fault of "A Few Renegades." He personally knew a couple of the executives involved and talked to them personally; and caught them out in some blatant lies. I suspect this sense of betrayal added quite a bit to the outrage he expressed over the catastrophe his community is enduring.
But that doesn't mean that the whole system needs to be re-thought. No, these are just "A Few Renegades" at fault, one or two Bad Apples.
And that got me thinking about Renegades...
The thing is, one man's Renegade is another man's Maverick: a brilliant Rule-Breaker who thinks outside the box and doesn't limit himself to the way things have always been done. The Free Market rewards guys like that... provided they actually make a profit.
And that's the thing. If a company can earn a profit by "breaking the rules" and going "renegade"; by doing things that are maybe ethically dubious, but not outright illegal; that means that they will have an advantage over their more strait-laced competitors. And that means their competitors will have to go "renegade" too, if they want to stay in business.
I saw this many years ago when I lived in Darkest Iowa. Wal-Mart wanted to open a branch in a small town called Pella, a highly-conservative Dutch community. A lot of the locals were upset about this, because Wal-Mart stays open 24/7, and stores in Pella were generally closed on Sundays. As I said, it was a very conservative Dutch community.
Now, personally I think that Blue Laws are kind of foolish, and I like having the opportunity to buy something on the Sabbath if I happen to need it; but the concern among the locals was that if Wal-Mart was open on Sundays, then other stores would start remaining open on Sundays to remain competitive. And that is pretty much what happened: many business owners who didn't want to stay open on the Day of Rest, (whether for Religious Reasons or for Keeping Payroll Down Reasons) found they had to choose between their Deeply-Held Religious Beliefs and Staying In Business. Of course, Wal-Mart crushed them anyway, but that's what Wal-Mart does.
But my point isn't about Blue Laws; it's that if a business can make money by going "Renegade", then soon their "Renegade" business practices will become Standard Operating Procedure.
The only way to stop these Renegades is through... Yes, you know this is coming... Government Regulations! Outside limits as to what they can and cannot do.
If we rely solely on the Market to act as the Conscience of Industry, we shouldn't be surprised if they place Profit above Ethics.