Here’s the latest reader question, along with my reply!
Jeffrey asks: My libertarian friend was arguing with his daughter. She made the statement that automobile manufacturers would not have made cleaner cars without being forced to do so by government. Neither my friend nor I have a quick response – so I’m writing to you. I’m sure you will point out the obvious that we are overlooking.
My reply: Your friend’s daughter assumes it is not in the interest of a manufacturer (of anything) to respond to market signals. In the case of vehicles, that “polluting” models would continue to be sold when the market wanted non-polluting models.
Consider the related case of “safety.” Many believe that if the government didn’t impose various requirements that car companies would just build “unsafe” cars. In fact, most people value a “safe” car – but vary in how much “safety” they want. Some are perfectly content with a car that is readily controllable, easy to drive and predictable in the way it handles, brakes and so on. For them, that is “safety” enough. Others want a car that is physically more able to protect its occupants in the event of a crash. Volvo made a lot of money selling such cars, which catered to the people who wanted that degree of “safety.”
Of course, pollution is a little different in that it is an issue that affects other people. And some people won’t be willing to pay more – if they don’t have to – for a car that emits less pollution than another car that emits less.
However, if the general consensus of the market is that pollution beyond a certain amount is not acceptable, then it is likely all cars will rise to the standard that is acceptable – for the same reason that a certain minimum acceptable standard of acceptability invariably applies to practically any product you can think of.
So, I think it’s unlikely we’d have had pollution spewing cars regardless of government involvement. But I submit that because government got involved, the standards became increasingly absurd and even counterproductive – i.e., the problem of diminishing returns, which often happens when the market is not allowed to act as a brake on unjustified measures as defined by their cost exceeding their benefit.
Hope this was helpful!
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