"Wherefore We must interrupt a silence which it would be criminal to prolong, that We may point out...as they really are, men who are badly disguised." Pope St. Pius X, September 8, 1907, Pascendi Dominici Gregis

Wednesday, March 30, 2011

Good News on the Corporate Accountability Front

ActualAnarchy has long argued that the costs currently born by taxpayers of particular types of costly, destructive activities by large, well-connected corporations ought to be born by those corporations themselves.

For a recent example, we argued that BP, if it were actually held fully accountable and forced to pay to restore the effected environment substantially in a confirmed way to the quality that existed prior to its recent Gulf of Mexico oil spill, would likely have gone bankrupt and rightly so. But because the Gulf of Mexico is not privately owned, BP's liability was limited to the amount the government was willing to extract. Because, we argue, BP did not fully bear the costs associated with its destructive activity, most corporations have a greater incentive to allow such destructive events to take place than they would in a fully-privatized system.

Good news, then, from Tokyo that Tokyo Electric investors may be wiped out after nuclear crisis. This is the proper market consequence of their behavior and, if it actually occurs, will send a clear message to all other nuclear power providers in Japan that similar accidents mean a total elimination of your company.

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