Will Firestone Get Retired?

In Brief

So the speed limits in the US jump up 20 miles per hour in the mid-1990s. Does anybody think about, say, changing tire requirements? Not until a whole bunch of people die and sue Ford. History House is making the prediction that we'll see some new tread regulation in the upcoming months. How do we know? It’s what happened with pork products at the turn of the twentieth century.

Party On

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The News

9/19/2000 Firestone company was stuck in hot water for most of the year 2000 for building tires that split apart while mounted on Ford Explorers, killing hundreds of people in a safety scandal that went covered up for years.

There have been a lot of tires blowing out on US highways recently. Certain ones manufactured under the Firestone brand seem to lose their tread and separate under higher speeds. These blowouts have contributed to a large number of vehicle rollovers, most of them Fords, and a not-insignificant number of deaths. The companies gaily ignored some 2,000 consumer complaints regarding the tires, and are now accusing each other of being at fault. What certainly happened is that someone comparatively high up looked at the numbers over time, did the math, and took the calculated risk that paying a few out-of-court settlements was probably going to be cheaper than recalling millions of tires. Oops!

Mind the Gap

History House is all about the free market, but we note that economically motivated decisions aren't necessarily always the best ones. Fortunately, we have a bountiful government which is supposed to step in and pinch hit in such cases. Interestingly, though, this time it totally blew it. The federal speed limit of 55 was repealed in 1995, yet nobody over at the National Highway Traffic Safety Administration seems to have considered that the increased speed might have an effect on the nation's tires. So now we're looking at a situation where a patently self-interested corporation looks evil. We also think, due to the brouhaha, a certain governmental regulatory agency may well be surreptitiously crafting the new, more stringent tire requirements it should have five years ago. We expect corporations to act in their best economic interest. Sadly, it seems we must also expect the government to fail when trying to fill in the gaps.

Take the meat packing industry at the turn of the twentieth century. In 1880, Europe started banning imports of US meats, claiming trichinosis and spoiling were common in US shipments. Fine, said the meat industry, and they got the Meat Inspection Act of 1891 passed (other, lesser acts were implemented by local authorities in the 1880s), which seemed to satisfy the Europeans. By 1892, Spain, Italy, Austria, Denmark, France, and Germany had begun to import US pork again, and all of the major packers and shippers were being inspected at that point. By having inspections, the meat market legitimized itself: see, we're certified, they'd say. It's all safe!

Unfortunately, despite the best intentions of some of the packers, not everybody in the industry was complying. Why? The agency responsible for inspections, the Bureau of Animal Industry, was woefully under budgeted and nefarious packers slipped through the cracks. While a substantial portion of US meats was inspected (73%, by one measure), there was still ample room for cleanliness infractions and plenty of folks got sick from eating pork. Thanks to some economic prodding by the Europeans, the industry had acknowledged shortcomings and taken steps to prevent them. The meat packers themselves did the math, and noticing that they stood to lose a lot of money without regulation, begged for it. The government responded in a half-assed manner, and in a few years came the predictable results: eventually the filth was publicized, and there was a massive public outcry.

Socialism and Sausages

It started at the hand of Upton Sinclair, who published The Jungle in 1906, because his vivid depictions of meat packing in the novel grossed everyone out. For you dropouts, Sinclair published The Jungle with delusions that his book might foment a Socialist rebellion; instead everyone focused on his ugly descriptions of the meat industry. Sinclair himself noted, "I aimed at the public's heart and by accident I hit it in the stomach." For example, Sinclair describes a room with a drain the middle where pork bits are washed: "there was a trap in the pipe, where all the scraps of meat and odds and ends of refuse were caught, and every few days it was the old man's task to clean these out, and shovel their contents into one of the trucks with the rest of the meat!"

So vigorous was the public's reaction to this prose that the Food and Drug Act was passed less than a year after its publication. Of course, people had been getting sick off shoddily-processed meat for years and, prior to The Jungle's publication, the government couldn't be bothered to beef up its program. Nor was anything done after an entire industrialized continent banned American pork products and all the major players in the industry begged for proper regulation.

You'll shoot your eye out, kid

In both of these cases, the corporations made the rational, if soulless choice. True, the auto and tire guys look pretty bad, but that's sort of what we expect nowadays. Our government is supposed step in where capitalism fails, and it shouldn't be timid about fulfilling its role. As economist George Stigler noted, "as a rule, regulation is acquired by [an] industry and is designed and operated primarily for its benefit." The public will feel better about buying meats and tires it can trust, and that trust is brought about by proper regulation. It's a shame the government can't seem to get its act together any more than it could a hundred years ago.

So as the squeaky wheel of the public gets the oil of Senate hearings on Firestone and its ills, we have to wonder: if industry can't be trusted to regulate itself, who can? Not the government, apparently.

 
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