The Japanese Parliament released its 640 page report on the Fukushima disaster on July 5th. It is a scathing and bitter indictment that ranges far beyond just the immediate problems that led up to and followed the massive release of radioactivity from the Fukushima nuclear power plant following an earthquake and tsunami on March 11, 2011. Chairman Dr. Kiyoshi Kurokawa states in his forward:
For all the extensive detail it provides, what this report cannot fully convey – especially to a global audience – is the mindset that supported the negligence behind this disaster. What must be admitted – very painfully – is that this was a disaster “Made in Japan.”
Its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devotion to ‘sticking with the program’; our groupism; and our insularity.
But one cannot complacently say, “Oh, it’s the fault of Japanese culture, so we’re OK.” There is nothing uniquely Japanese about these characteristics. Indeed, as John Taylor Gatto has observed, it is the business of the American government school system to encourage exactly those characteristics in your children.
One of the key failures was the cozy relationship between the Tokyo Electric Power Company (TEPCO) and its regulator, the Nuclear and Industrial Safety Agency (NISA):
The regulators did not monitor or supervise nuclear safety… They avoided their direct responsibilities by letting operators apply regulations on a voluntary basis. Their independence from the political arena, the ministries promoting nuclear energy, and the operators was a mockery. They were incapable, and lacked the expertise and the commitment to assure the safety of nuclear power.
Tepco did not fulfil its responsibilities as a private corporation, instead obeying and relying upon the government bureaucracy of Meti, the government agency driving nuclear policy. At the same time… it manipulated the cosy relationship with the regulators to take the teeth out of regulations. [Emphasis added]
In short, regulatory capture. This is where the governmental regulatory agency is take over by the people it is supposed to regulate. They then use it, not for the public benefit, but for their own. Instead of encouraging competition, the regulatory agency restricts competition and makes the industry the preserve of the incumbents. Free market capitalism becomes political capitalism. As George Stigler put it,
Regulation and competition are rhetorical friends and deadly enemies: over the doorway of every regulatory agency save two should be carved: ‘Competition Not Admitted.’ The Federal Trade Commission’s doorway should announce , “Competition Admitted in Rear,” and that of the Antitrust Division, “Monopoly Only by Appointment.”
Indeed, sometimes the very regulated industries call for the regulation. And they do so for exactly such reasons. This is the thesis of Kabriel Kolko’s seminal 1977 study of the Progressive Era, The Triumph of Conservativism. Kolko is a socialist; his solution to the problem is to nationalize all industry. In spite of that, the book is essential reading for advocates of the free market because it shows why regulation does not solve problems.
With a lack of competition comes complacency, sloth, and sloppiness, both physical and intellectual. None of these are characteristics useful for dealing with disasters, either prevention or postvention.
Given the extensive regulation of the American economy, not least nuclear energy, one wonders what other disasters lurk out there, masked by regulatory smiley faces.