The tragedy at the West Virginia coal mine, in which 29 people were killed, resurfaced in the news yesterday when Obama seized on the event to bolster his power and ego. When news of the explosion hit the airwaves there were two themes to the stories: (1) Bureaucrats and Massey Energy Co were negligent, especially Massey Energy Co who allegedly put profits ahead of worker safety; (2) Massey was scrambling to explain to shareholders how it would increase production at other mines in order to cover the huge losses incurred by the explosion.
As is obvious to anyone with a basic understanding of reality, themes (1) and (2) are contradictory. Indeed, it is extremely expensive for a company to engage in practices which destroy capital and kill or maim trained employees. If Massey was putting profits first, then, so long as the mine was productive, the management would strive to ensure that accidents would not occur, ceteris paribus. This is illustrated by the fact that Massey incurred losses in the millions of dollars from this accident.
So how did this happen? I am not ready to absolve Massey of all blame — most large corporations in this country are hopelessly entwined in the corrupt dealings of corporatism. But it is absurd to claim that Massey put “capitalist greed” over worker safety. “Corporatist greed” — maybe — but capitalism just doesn’t work this way.
More regulation (or unionization) is not the answer. Indeed, it will only make tragedies such as this one more common as perverse incentives are put into place.
9:06 am on April 17, 2010
