That little libertarian questionnaire made me think again about the oh so interesting question of safety regulation. The first inclination of a good small government economist is to say “thats ridiculous of course they should have no regulations on safety”. This is an area though where I think we may need some regulation (though it could be state, local, or even company regulation if the company is brave enough).
We’ll use the safety helmet requirement for example. If there is no requirement then there will likely be a machismo factor, or a coordination failure. “I don’t need a helmet” in other words it maximizes individual utility to not be the only one wearing a helmet, though they’d like to. There is a factor of worrying about being made fun of for wearing it. “hey helmet boy, afraid a wrench is going to fall on your head”, the risk of this is high enough to outweigh the benefit of wearing the helmet. Every worker you can think of having this internal struggle, thus we have an equilibrium where few to none wear helmets. Regulation can serve to correct the coordination problem with very little inaction costs. Few refuse to wear it cause they won’t be made fun of for wearing it, and their utility is better for they have no fear of being mocked and they get the utility of better expected safety. An improvement I’d say. “They could just self regulate right, agree all together to wear helmets” no that is the reason it is a coordination failure problem. chances are no one has the incentive to initiate the self-regulation. Imagine the taunting “little poor jimmy wants us all to wear a helmet, throw your wrench at him”. Poor Jimmy. I think the role of govt is to do for society what society would like to be done, but can’t do on its own. This is one of the few times I’m for regulation. There are actually papers written on this exact subject. If any is HIGHLY interested (your utility of knowing the paper is greater than the hassle for me to dig through my old labor papers) Ill look it up for you.