Capitalism's moral core: The lead paint story

CONTEXT

A second generalization from experience is that the appeal to “social responsibility” has little effect, unless there is an iron fist in the velvet glove of appeals to voluntary restraint. The program either breaks down and is discarded, or it is replaced by a compulsory program—as voluntary price control in the United States in 1941 was replaced by legally imposed maximum price legislation in early 1942. The failure of truly voluntary programs is inevitable and has nothing to do with a lack of “patriotism” or social consciousness. Indeed, the doctrine of “social responsibility,” if taken seriously, is a truly subversive doctrine in a free society. This can be seen in the kind of challenge it offers to a free society. 

Almost without exception, appeals to “social responsibility” arise from an unwillingness to let the price system work. But no one has yet invented or discovered a substitute for the price system in coordinating the activities of millions of people without central control. Because the price system works impersonally, automatically, continuously, and quietly, because it has no press agents, there is a tendency when all goes well to take it for granted and to forget that a function is being performed by it. Almost without exception, however, attempts to replace the price system, or to prevent it from working, have ended in chaos. -- Milton Friedman, Social Responsibility: A Subversive Doctrine, National Review, 24 August 1965, pp. 721–723

In the article cited above, Friedman argues for government to get the hell out of the way of companies, i.e., no regulations, no social conscience. They can be trusted to do the right thing and besides, government itself is incompetent and corrupted by lust for political power. Friedman probably drinks his own Kool-Aid. He actually believes his own nonsense. 

He is wrong to argue that trying to regulate the profit motive nearly always results in chaos. That propaganda leads directly to the false implication that when markets are left alone, chaos does not happen. US history in the days of hard core, unregulated laissez-faire capitalist markets is full of economic chaos and misery for the masses. What causes chaos is not always mostly due to regulations. Unregulated markets can lead to just  as much or more chaos, misery and death.

He is also wrong to argue that a capitalist price system works impersonally. What a staggering load of crap. What the hell did he think that special interests, lobbyists, campaign contributions and wealthy capitalists do with politics -- advocate for the best interest of everyone, with little regard for profit? It is very personal to people with money asking government for favors that are usually pro-wealth accumulating to them personally and often or usually detrimental to the public interest and competition. 

Yes, the price system works as quietly as the people who control it can be. Capitalists want the real workings of the price system out of public view as much as possible, whenever possible. Obviously, capitalists do not want the public to understand or know how they purchase and use government to their benefit and our detriment. Capitalists do not want transparency. Neither does our complicit, corrupt two-party pay-to-play system. Transparency tends to kill rot and most capitalists and most people with political power like lots of rot. For them, opacity is far better than transparency.

The lead paint story

The little guy, JJ, he got lead in him from paint --

a 19-day treatment got some out of him

I frequently refer to moral rot in our two-party political system. Other than lust for profit, assuming that is a moral value, moral rot seems to characterize most big businesses along with the always-present profit lust. The New York Time writes in an article, How 2 Industries Stymied Justice for Young Lead Paint Victims:

The U.S. insurance and real estate industries have waged a decades-long campaign to avoid liability in lead cases, helping to prolong an epidemic. The cost for millions of children has been incalculable.

When Selena Wiley signed the lease for an older rental home in South Bend, Ind., she asked the property manager about lead paint and was assured the house was safe.

But in November 2018 — almost two years after moving in with her partner and three children — Ms. Wiley noticed that their 2-year-old’s appetite had vanished and his constant chattering had stopped.

A doctor soon discovered that the boy, Joevonne, known as J.J., had lead poisoning. The level was so high that he immediately began a 19-day treatment to help rid his body of the toxin, which can cause irreversible damage to a child’s brain and nervous system. A health inspector soon found lead paint and dust throughout the family’s rental home.

Although lead poisoning has decreased substantially since the late 1970s as a result of regulatory actions and public health initiatives, about 500,000 children under 6 have elevated blood lead levels in the United States and are at risk of harm. The issue has only intensified in the era of Covid-19: Rental inspections lagged, exposure increased as people spent more time at home and testing of children fell by 50 percent at times in 2020.

But with little public attention and the approval of state officials, insurance companies across the country excluded lead from their policies, declining to pay out when children were poisoned on properties they covered, according to interviews with health and housing officials, regulators and lawyers who represented children and their families. The move also eased pressure on landlords to fix up their rentals.

Without insurance, there is little chance of recovering money for a child when a landlord has few resources. Property owners who do have substantial holdings have found ways to legally distance themselves from problem rentals, increasingly using L.L.C.s to hide assets and identities. In 2019, for example, a Virginia family that had been awarded a $2 million judgment agreed to accept just $140,000 after the landlord, a major developer, dodged collection efforts.  

As a result, plaintiffs’ lawyers — who often work on contingency, fronting costs and collecting payment only if there is a favorable judgment or settlement — are increasingly declining to file lawsuits.

If not for the obstacles, “I would still be getting up in front of juries,” said Richard Serpe, a lawyer who represented the Virginia family and stopped taking lead cases last year after working on them for three decades. “We have shifted the burden to the people least able to handle it, which is these kids.” (emphasis added)

Once again our rotten two-party political system works quietly with big companies to shield the companies from accountability and social responsibility. Shift the burden of proof to the victims. That is a brilliant profit-boosting strategy.

America has long suffered under a corrupt pay-to-play two-party system. That system now includes a press mostly neutered and corrupted by capitalism (need for profit) and corporate owners. Those owners do not want inconvenient truth about capitalism to be publicly known or understood. 

Protection from taxes, regulations and competitors can all be routinely bought from politicians for special interest cash. For America's brand of laissez-faire capitalism, profit talks and social responsibility walks. That includes human health and life walking whenever big profit is talking.