Wednesday, October 27, 2010

'Helicopter government'?

The term comes from an article in the Sydney Morning Herald criticizing the 'nanny state' mentality. I think it's a wonderful description of that sort of attitude. Here's an excerpt from the article.

Here's a way to make driving safer: make it riskier.

A German safety expert recommends we raise speed limits on our roads, not lower them.

Ulrich Mellinghoff, head of safety at Mercedes-Benz, argues that raising the top speed on long stretches of Australia's roads to 130 or 140km/h could help combat driver fatigue.

Mellinghoff's argument is counter-intuitive. It will definitely make driving feel less safe, but it could result in fewer accidents. And it fits in with an increasing body of knowledge that suggests government attempts to protect us are have the opposite effect - making us less safe and, crucially, less able to manage risk.

We've had widely owned, personal transport for more than a century now. And we've learnt a lot about safety in that time. The University of Chicago economist Sam Peltzman famously studied the results of the American 1966 Motor Safety Act that mandated new car safety standards. Instead of making driving safer, Peltzman found, the new standards prompted drivers to be more reckless on the roads, and endangered the lives of pedestrians. Other risk analysts have found the same occurred when seatbelt laws were introduced around the world.

Economists call that ''moral hazard'' - when people feel they are insulated from the consequences of their actions and behave differently as a result.

. . .

We saw the moral hazard dynamic play out most dramatically in 2008, as the global financial crisis looked set to sweep away the entire world economy. Wall Street made riskier and riskier financial trades and employed ever more complex and precarious financial instruments because of an assumption, cultivated over decades, that if they got in too much trouble the government would bail them out. It would be bad if they lost their financial gambles. But they wouldn't lose the business over it. They were too big to fail.

Calling a company "too big to fail" is a self-fulfilling prophecy. The marketplace starts to imagine the company is unsinkable and relies on it.

Having bailed out other firms, the market really went into free fall when the US government declined to bail out Lehman Brothers in September 2008, dramatically reversing that assumption.

It wasn't the government's failure to bail out Lehman Brothers that caused the panic. It was implying they would do so, and at the last minute whipping the protective blanket away.

The long-term cause of the financial crisis was the suggestion the government would do anything to protect bankers. The short-term cause was that it didn't.

This isn't an argument against seatbelts or bike helmets. Seatbelts combined with drink-driving laws, education and cultural change have reduced Australia's road toll significantly. But it should be a warning: many of the well-meaning attempts to make us safer are counterproductive, making us more likely to take risks, and less likely to think about the consequences.

There are solutions. In a revolution in traffic management across Europe, a number of towns are removing traffic lights, stop signs, and other road markings. Once eliminated, drivers enter intersections more slowly and more attentively. Instead of focusing their attention on signs, they make eye contact with other drivers. They negotiate. Accidents in these towns have dramatically declined.

. . .

A spontaneous order emerges when people feel they are fully responsible for their own driving. And it's a safer one than in a traffic management system that tries to push drivers along pre-determined paths, barking orders along the way.

It's like the spontaneous order that emerges in society and markets when people are responsible for their actions. So let's hope risk and reward can be rejoined in the financial sector too.

We talk a lot about helicopter parents who over-parent and insulate their children from the world. The obvious downside of this kind of parenting is that children learn nothing about managing danger.

Perhaps it's time to talk about helicopter governments as well: always hovering above their citizens, ready to swoop in the moment they stray off the safest path.

There's more at the link. Bold print is my emphasis. Very worthwhile reading.

I love the term 'helicopter government'. It's a perfect conversation-stopper to toss at your statist friends when they start complaining that the government 'isn't doing enough' or 'could do more'. In most cases, why would any sane, normal, rational, self-reliant person want government to do more? Haven't they done enough damage already?



Comrade Misfit said...

In 2008, the fatality rate for motor vevehicles was 1.26 deaths per 100 million vehicle miles.

In 1965, before most of the modern safety improvements were required, the fatality rate was 5.3 deaths per 100 million vehicle miles.

If the reduction was not due to safety improvements as a result of government regulation, then I would be interested in hearing an alternative explanation.

SFlorman said...

Ah, my old buddy Peltzman. So good to see his name in print again, years after using him in many high school debate rounds trying to argue that seat belt laws, airbag laws, and the like would make drivers more reckless!

Gerald said...

But one thing that Australia did to improve seat belt use was not to pass ever more draconian laws for failing to wear seat belts but by passing a "contributory Negligence" law; i.e. you can wear a seat or not as you choose but if you are involved in an accident, your insurance reimbursement will be reduced if it is determined you are not wearing your seat belt because your negligence has contributed to your injuries. As I recall, seat belt use went up far beyond U.S. usage.

Comrade Misfit said...

Gerald, I'd be in favor of that for seat belts. But that does not get into air bags, crumple zones and so forth.

Ever see the crash test of a `59 Chevy Bel Air into a `09 Chevy Malibu? If you were in the older car, you'd be on your way to the morgue. In the newer car, the paramedics would probably have you sitting on a gurney while they looked you over for scratches.

The changes in the safety of cars weren't brought about by the good nature of the car companies. Most of them fought the requirements tooth and nail. But those requirements, along with, yes, the crackdown on drunk driving, have saved hundreds of thousands of lives.

Based on my rough extrapolations, we would have roughly 160,000 dead in car crashes each year, if we were driving those cars from the early 1960s at today's mileages. So over 100,000 people live each year because of those government mandated safety requirements.