Chris Berg writes an interesting perspective on the anniversary of the sinking of the Titanic in The Real Reason for the Tragedy of the Titanic, The Wall Street Journal, 4/12/12.

Excerpt:

In the Board of Trade’s post-accident inquiry, Carlisle was very clear as to why White Star declined to install extra lifeboats: The firm wanted to see whether regulators required it. As Carlisle told the inquiry, “I was authorized then to go ahead and get out full plans and designs, so that if the Board of Trade did call upon us to fit anything more we would have no extra trouble or extra expense.”

So the issue was not cost, per se, or aesthetics, but whether the regulator felt it necessary to increase the lifeboat requirements for White Star’s new, larger, class of ship.

This undercuts the convenient morality tale about safety being sacrificed for commercial success that sneaks into most accounts of the Titanic disaster.

The responsibility for lifeboats came “entirely practically under the Board of Trade,” as Carlisle described the industry’s thinking at the time. Nobody seriously thought to second-guess the board’s judgment.

This is a distressingly common problem. Governments find it easy to implement regulations but tedious to maintain existing ones—politicians gain little political benefit from updating old laws, only from introducing new laws.

And regulated entities tend to comply with the specifics of the regulations, not with the goal of the regulations themselves. All too often, once government takes over, what was private risk management becomes regulatory compliance.

It’s easy to weave the Titanic disaster into a seductive tale of hubris, social stratification and capitalist excess. But the Titanic’s chroniclers tend to put their moral narrative ahead of their historical one.

At the accident’s core is this reality: British regulators assumed responsibility for lifeboat numbers and then botched that responsibility. With a close reading of the evidence, it is hard not to see the Titanic disaster as a tragic example of government failure.

HKO comments:

There was a similar point made year back in a book called The Death of Common Sense. The more we depend on the government to regulate the less we use our own judgment.

This point stands in the shadows of the financial meltdown. There was an alphabet soup of regulatory agencies supervising the financial sector but were unable to keep up with or understand newer financial products. There is much more political glory issuing new regulations than in adapting and updating old regulations.

Compliance becomes the focus rather than the purpose of the regulations. Judgment requires flexibility, regulations discourage flexibility. Often the complexity of regulations adds to the complexity of the systems being regulated. Instead of avoiding problems it often fosters them.

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