Taiwan in the wake of the South China Sea Crisis and the election of a US-leaning government could soon play a pivotal role on the international stage. Should some catastrophic event or natural disaster like the Tainan earthquake force the Republic of China to ask for US aid, the People's Republic of China would assuredly find US forces in what the Communists of the PRC consider their stolen territory to be unacceptable. For the time being, however, the focus on the collapse of the Weiguan Jinlong high-rise building offers an opportunity to discuss regulatory issues that face all of Asia and much of the underdeveloped world, especially with the recent signing of TPP.
Having buckled in a 6.4-magnitude earthquake, the Weiguan Jinlong building was clearly not up to the task, especially when compared to major earthquake disasters. Looking at the Great Japanese Earthquake of 2011, for example, the 9.0-magnitude tremor lasted almost five minutes with nearly 10,000 aftershocks, including some that were more powerful than the Tainan earthquake. The Earthquake was so powerful it literally pushed the main Japanese island Honshu eight feet away from Asia. Like the Great Japanese Earthquake, the damage done by the Tainan earthquake could have been far worse had the Weiguan Jinlong building been the standard across Taiwan.
When Chile experienced an earthquake 500 times more powerful than the devastating 2010 tremor that leveled Port-Au-Prince weeks earlier, the world was forced to recognize the poor are more likely to die in a natural disaster than the rich without regard to the magnitude of the crisis. Unlike Haiti, Chile had grown accustom to major tremors, thus its building codes were as strict as the US and Japan, yet many newer buildings collapsed during this powerful quake. In the 2009 Padang Earthquake and the 2008 Sichuan Earthquake, the most modern buildings collapsed, leaving only older structures standing. Anti-regulation political movements and weak enforcement were responsible in these cases.
Buildings are technologies composed of several little technologies. Like all technologies, their quality depends largely upon the business models behind their design, marketing, and distribution. Unfortunately, the trend in all industries has been to focus on short-term profits without regard to the long-term needs of people. This short-sighted view has lead to faulted, lower-quality technology that is designed to last a very short period of time, at best. This both undermines living standards and endangers the lives of people.
From Chile to China, economic forces and political movements have encouraged deregulation and weak regulatory oversight. Technology, including buildings, must take into consideration environmental conditions, such as the possibility of a strong earthquake, and available resources, yet current business models push one-size-fits-all blueprints. Just as horrifying events like the 2013 Garment Factory fires in Bangladesh demonstrate the human costs of weak regulation, the Weiguan Jinlong building collapse highlights the need for proper regulations and proper, consistent enforcement of those regulations.
Where pessimists see regulation as nothing more than an unnecessary cost to industry, businesses and industries actually need proper regulation to reduce unforeseen and deferrable costs that will not be realized for years to come, if they are ever realized. Because the forces of competition continually pressure businesses to cut costs, proper regulation and enforcement are needed to prevent businesses from undercutting safety. The Weiguan Jinlong building collapse is the long-term cost of a business choosing increased profit over sound engineering. Without regulation, these kind of short-term decisions undercut the competitiveness of businesses that do embrace necessary standards.
Capitalism relies on mechanisms like competition to foster efficiency and innovation. Unfortunately, the shortcomings of capitalism tend to neglect social needs. Lawsuits and business failures would be the approach to regulation for the purist capitalist, but these mechanisms often work over periods of decades and they do not target the decision-makers who are responsible for endangering people while profitability determines the behavior of businesses. Where the short-term nature of economic forces fail to serve the public interests, government must properly balance the interests of businesses and public safety concerns or businesses and entrepreneurs are sure to face backlash.
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