Chapter 89 Question ○8○

Why do tourist boats have less crashworthy safety equipment than cars? (Peter Gazzo) Most cars sold today are equipped with side air bags, three-point seat belts, and shock absorbers that help smooth out the damaging forces of high-speed impacts, according to federal regulations.Why not provide for the same equipment to be installed on recreational motorboats? Basically, all motorboat users drive.From the standpoint of rational individuals and rational regulators, the ideal standard for investing in safety equipment is that the last dollar spent on safety can correspondingly increase the survival rate of passengers.Assuming that the last dollar spent by a boat owner on car safety equipment increases the chance of survival less than the last dollar spent on motorboat safety equipment, then he will naturally spend one dollar less on car safety equipment than on motorboat safety equipment. Improve your chances of survival by spending an extra dollar on motorboat safety equipment.

For a number of reasons, it is often more profitable to install certain safety equipment in a car than in a boat.Most importantly, ordinary drivers spend hundreds of hours driving each year, while boat owners rarely spend more than forty hours a year on board, especially in the north.No matter how many hours a person spends in a car or boat, the cost of installing a set of safety equipment is always the same.Therefore, installing a set of safety equipment on a car saves many more lives than installing it on a boat. (Please note the similarity between this explanation and the explanation in Chapter 2 Why does the refrigerator light up when the refrigerator is turned on but the freezer does not? A question explanation.)

Since water traffic is generally less congested than land, the average speed of a ship is much slower than that of a car, so the safety equipment on a ship is not as important as that of a car.Piers, canals, and other bodies of water with heavy traffic are mostly restricted to less than five miles per hour, at which speed collisions occur with few injuries to passengers. Of course, saying that doesn't mean boating is a risk-free activity.In the United States, more than 800 people die in boating accidents every year.Also, the law requires boat owners to install certain safety equipment that can significantly improve the chances of survival for boat occupants.For example, most states require that boats carry a personal flotation device for each passenger on board.The bottom line here, however, is that a car ride is far riskier than a boat ride, so spending more on car safety equipment makes good economic sense.

An influential school of economic thought argues that law evolved to drive efficiency.Effective laws are those that maximize the wealth of members of society.This view holds that if there are two different ways of writing the same law, and way A is more effective than way B, then the law should be written in way A, which is more effective, so that everyone can enjoy better benefits than under the invalid law. situation. Suppose, say, that version A of a law increases the total wealth of consumers by $3 billion, but not of producers; while version B of the same law increases the wealth of producers by $1 billion, but does not increase the wealth of producers. Not good for consumers.Version A of the law is more efficient because it creates a greater total increase in wealth.

But if the producers wield greater political power, they can enforce version B of the law.But proponents of the legal efficiency theory believe that producers will use their political power to obtain tax breaks sufficient to compensate themselves for billions of dollars in losses, and agree to pass the more efficient version A of the law. Another rival academy, while acknowledging the appeal of the argument, emphasized that the kind of negotiation necessary to achieve effective outcomes is difficult in real life.So, in their view, laws and regulations are sometimes enacted not because they promote efficiency, but because they serve the special interests of powerful powers.

As the examples above show, the drive for efficiency argument makes sense.But the view of special interests is also reasonable.