A Left Turn Towards Capitalism: Caps on Damages

Thanks to a cap on damages set by Congress, BP is only liable for $75 million in damages. A different Act (Price Anderson, amended) caps nuclear accidents at $11 billion.

Even a right-wing-Capitalist response to these laws should be to throw them out.

What if we changed them from caps to cut-offs? Corporations that do "epic" levels of damage should lose their rights, and executives should face more than a possible pink slip. Part of that high-paid corporate salary should be a personal assumption of risk if you promise the nation you're doing something safe, and manage to destroy an ecosystem.

This isn't just about punishment: basic capitalist theory tells us that if the costs of damage are underrepresented, people are going to take overly large risks. Both the corporations and the people making the decisions need to face consequences proportionate with the damage they might cause in order for them to even consider taking the appropriate levels of precaution.

If BP is a corporate person, it deserves the death penalty.

Another approach would be to break the firewall between corporations and their investors in cases where a corporation takes on huge risks with a promise that the disaster "will never happen" -- oil drilling and nuclear come immediately to mind. Real capitalists want to find out if conservative investors are willing to put their money where their mouths are on huge-risk "it will never happen" industries. And by keeping the investors at risk, we'll have someone besides the gov't engaged at keeping operations safe.

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