Remember the Bhopal disaster in India? It was the world’s worst industrial disaster, in which more than half-a-million people were exposed to toxic gas released from a Union Carbide plant located in a built-up area. In scale, if not in human toll, it was comparable to BP’s Gulf of Mexico debacle. Stephen Hicks reviews one of the textbook cases of so-called “market failure” that looks more and more like something else.
The 1984 disaster in Bhopal, India, is one of the major business ethics cases of the past generation. [A highly toxic gas escaped from a Union Carbine plant in a built-up area] and many people died. Awful.
But I am weary of reading the standard journalistic accounts that run like this: In the name of profit, a large American multinational corporation neglected safety; as a result, many people, especially poor people, were killed and maimed, and the corporate executives involved have never been criminally prosecuted.
Bhopal is an important case to learn from, but it is absolutely crucial to attend to all of the relevant facts, many of which the standard accounts omit.
Hicks offers five immediately relevant facts omitted in the standard accounts,
the most important [being the fact] that Union Carbide’s (UCC) presence in India was governed heavily by the Indian government and its aggressive, top-down industrial policy…
Hicks has the details, but the standard accounts also omit to mention that the decision to use the hazardous chemical MIC was the Indian government’s, not Union Carbide’s; that government directives also required the building of larger rather smaller facilities; that the Indian government was also pursuing an affirmative action programme, replacing Union Carbide’s foreign experts in engineering and agricultural chemistry with locals; and, finally, that the decision to situate the chemical plant in the middle of a residential community was the Indian government’s, not Union Carbide’s, exacerbated by a re-zoning policy that included giving thousands of construction loans to encourage Indians to build their homes near the chemical plant…
What he doesn’t say, but could have, is that it while it’s assumed in all the standard accounts that it was in the selfish interests of Union Carbide to risk lives, in truth it was no more in the long-term self interest of Union Carbide to kill thousands of people than it was for BP to risk ecological disaster in the Gulf of Mexico.
Hicks observes that even twenty-seven years later there are still many questions to be answered about the disaster, but “before jumping to conclusions about culpability, it’s important that we frame the investigative questions accurately… [and] almost 30 years later, I have yet to come across a professional and objective set of answers to those questions.”
As I said myself a few years back when just seven of those responsible for the industrial disaster were finally taken to trial, convicted and sentenced,
the disasters caused by Union Carbine and BP (and James Hardie) show that the cosy relationship of big government and big business does not lead to big justice, or provide any guarantee against environmental or human disaster. BP is one of the most politically active in its industry. The close links of BP to both government and environmental organisations should lead one to wonder whether “BP [has] been too busy spending money to [buy politicians, and to] impress the government and the public with how ‘green’ it is to look after safety adequately.” And Union Carbide and Dow Chemical, its new owners, seem to think it is easier to buy regulators and politicians—to hold its operations together “by duct tapes and bribes”—than it is to face justice, or to act justly. [Ditto for James Hardie.]
And it’s not like the governments they buy deliver any of that “bought-and-paid for” justice to their constituents either. The Indian Government’s fascistic “Think Big” policy saw them forgo their role as referee and act instead as a player, and a bad one. (“The Indian government had its heavy hand on every aspect of the Bhopal plant, from its design and construction to its eventual operation.”)
So, desperate to protect themselves and under pressure from the US Government not to charge Union Carbide’s executives, Rajiv Gandhi’s government instead accepted millions of dollars in out-of-court settlements from Union Carbide as "compensation for the victims.” But while all that money was received by the politicians, very little of that1989 settlement ever actually reached the survivors. The loop of political corruption closed out those who most needed justice from the disaster, just as that corruption and the politics that caused it helped make the disaster itself happen.
Anti-capitalists will often suggest that we need big government as a “counterweight” to big corporates. But is that really true? The fact is that stiff regulation protects no-one except those it shouldn’t, and simply invites big corporations to buy their even-bigger regulators. There really is no greater force for corruption than an equation that puts together a big corporate desperate to escape justice, and a politician in pursuit of power and campaign funds. As PJ O’Rourke once observed, “when buying and selling are controlled by legislation, the first thing to be bought and sold are legislators”—some of whom, like Al Gore, take that relationship with them even when they retire from the legislature.
Just one reason that a complete separation of state and economics is called for, lest the poisoners and the parasites make common cause.
As they have done all too frequently.