adam@npois.UUCP (Adam V. Reed) (06/06/85)
Nat Howard says: >As for nuclear power plants, the same government you like for giving us >OSHA also arbitrarily limits the possible damages of a nuclear accident >to some artificially low figure. Why? Because insurance agencies would >hardly insure reactors in cities for the amounts of damage they might >actually cause. As it is, of course, the government has spoken, and it >is the government, not the market, which must be blamed for any >artificially imprudent placement or construction of nuclear power >plants. Peter Beckmann (cited by Bob Stubblefield) says: >"Contrary to widespread misconceptions, liability insurance for nuclear >accidents is fully private with not a cent either contributed or confis- >cated by the government (with the unimportant exception of small reactors >under 100 MW, used mainly at universities and research labs). Liability >up to $160 million is covered by a pool of private insurance companies, and >any excess over that figure--which has never materialized and is unlikely to >occur in the future--would be taken from a fund which utilities would con- >tribute up to $5 million per licensed reactor or, with the present 92 li- >censed units, up to $460 million, bringing the liability coverage to a total >of $620 million." ACCESS TO ENERGY, May 1985 (Vol.12, no.9) Box 2298, Boulder >CO 80306 Bob Stubblefield says: >I share Nat Howard's loathing of government intervention in economic affairs, >but my study of the facts has led me to conclude that nuclear power has been >hamstrung rather than subsidized by the government. The fact that some >libertarians are quick to rally to the popular anti-nuclear cause is one >of the things that makes me uneasy about the movement. It is wrong to assume that just because the government has hamstrung nuclear power development, it follows that the government has been responsive to concern about the safety of nuclear power plants. The usual effect of government intervention in the economy has been to mess things up for everybody, without necessarily benefiting anyone. The reason why private insurers are unwilling to sell more than $160 million worth of insurance to the nuclear industry, is that they are not permitted to carry out their own safety inspections in nuclear power plants, or to adjust the premiums for each plant in accordance with the outcome of their investigations. In industries in which insurance companies are not prevented from carrying out their normal functions, the possibility of adjustment of insurance premiums provides plant operators with a strong incentive to follow the insurance company inspectors' recommendations on plant safety. This results in rapid application of safety innovations disseminated by the insurance industry. The government's policy has effectively prevented innovations in the safety technologies from reaching nuclear power plants. For example, the Three Mile Island accident resulted from human errors that would have been prevented by the kind of routine attention to human factors, common in other industries, that insurance company inspectors would have insisted on. The point is that rational people, cooperating in a free market, have devised very effective mechanisms for achieving industrial safety (e.g. casualty insurance), product and service effectiveness (consumer information services and testing laboratories), and other objectives used by governments to justify their intervention in the economy. The nuclear power industry provides a particularly clear-cut example of how government intervention has caused the very "problem" that government intervention is then invoked to "correct". Why take libertarians to task for pointing it out? Adam Reed ihnp4!npois!adam