Recently, 38 train cars filled with toxic chemicals were derailed in East Palestine, Ohio. This derailment has affected the area negatively and brought to light many concerns and current topics we have been covering in class. It's been stated that this train derailment could have easily been avoidable and was caused due to the constant cost-cutting of the railroad industry. This perfectly relates to perfect markets and market failures. The requirements for perfect market failures are related to lack of competition, lack of information, issues pertaining to the provision of public goods, and externalities. Many issues we see today, including this train derailment, are not considered failures of the market because the market prioritized efficiency. So, this type of incident, although very troublesome to the people in the community, should not be a surprise. The market favors efficiency and the railroad industry has been outdated and in need of innovation for a while now. Rather than pursuing innovation, though, the railroad industry's main concern has been with cutting costs in order to compete with the shipping and trucking industries. Due to these cutting of costs, overtime, the train, and railcars become less equipped with proper safeguards and precautions. This is why our system is not completely laissez-faire. The government is supposed to oversee most industries and ensure people's and workers' safety. However, it is quite evident that the government has not done the proper due diligence regarding the safety and protocols of the railroad industry as pointed out by the Vox article. Since the markets only favor efficiency and not safety that is left up to the government but if the government is lackadaisical and enforcing then what should be done to prevent these types of accidents?
https://www.vox.com/policy-and-politics/23597778/ohio-train-east-palestine-trainwreck-accident-chemical-norfolk
https://www.npr.org/2023/02/16/1157333630/east-palestine-ohio-train-derailment
6 comments:
Loved your connection to the class material with this article. Not sure if you saw, but today another train derailed near Detroit. This is definitely an issue that needs more attention from the government and an industry that desperately needs to be nationalized. The cost-cutting is severely damaging the earth and nature surrounding us and will have further economic and health damages if not fixed quickly.
Great post! Loved the class connections. I really hope that the U.S. government can learn from their mismanagement of big corporations. This whole issue is a prime example of how lobbying has failed the needs of the American people once again. I am a big advocate for free markets, but you need to have government scrutiny to ensure that corporations are operating with better moral intentions. It bothers me that Norfolk Southern were so stingy about their safety budget as they have ruined many towns' water, and have caused animals to die. Some state intervention is needed to protect all Americans, even if that means efficiency lowers.
This happening is an extremely sad tragedy but now there has been three train derailments in the past two weeks. I am hoping the government gives these companies heavy fines along with immediately have a law passed requiring more safety procedures.
This is a really relevant topic and more so it can effect all of us as well. It is crazy that due to cost-cutting such events can occur. The government definitely in this case needs to step-in and create safety protocols and compensation for all those who have been impacted.
The Social cost in this instance is immense, with groundwater resources being heavily affected. This, in my estimation, is a market failure, as this negative externality has a much higher social cost than private cost, as the firms will most likely be charged with a slap on the wrist fine. I do imagine, however, that due to the immense media scrutiny that this occurrence has come under, the government may place additional restrictions on the railway industry, which may lead to market inefficiencies, as it may lead to a situation where the most efficient use of resources does not take place.
Hello Aris,
I really appreciate your ability to link this post with what we are currently learning in class. To your point, the train system runs off of efficiency and is in need of new advancements. Their need for completion is necessary in ensuring that safety measures are taken more seriously, even if that means spending a few more dollars to follow regulations. One of my concerns with this issue is the long-term effects the pollution will cause on the environment. Supposedly the toxins had leaked into a river which is the main water bank for rivers that flow across the states.
Overall, this is very current and frightening to the environment and people of East Palestine. Well done.
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