How Deregulation Foretold Nuclear Disaster In Japan

There will be a postmortem to determine the cause of the nuclear accident in Japan at Fukushima, and all the usual suspects will be rounded up for interrogation. One, however, will get a nod and a wink without any serious investigation: deregulation. It’s the linchpin of the problem, but it will get nary more than a cursory examination.

In the neoliberal world economy, deregulation and free markets are the Holy Grail on the altar at which we’re all forced to worship. Speaking badly about deregulation is like talking about someone’s mother; it’s simply not done. However, to exclude it from the discussion condemns us to another such tragedy. It’s time this thorny issue be addressed and resolved, once and for all, for the good of every living creature on the planet.

Deregulation is defined as, “the removal of government controls from an industry or sector, to allow for a free and efficient marketplace.” It sounds like a good thing to do. After all, don’t we in the West worship freedom, and shouldn’t everything be free, including markets? Certainly we want to be efficient, but what constitutes efficiency?

Having watched deregulation in action for 30 years, I will propose my own definition. Deregulation is about removing all controls, no matter how essential, in the name of generating the highest profits possible. Deregulation is the sanctification of greed.

Deregulation of Japan’s energy sector began in earnest in 2000, allowing commercial and industrial consumers using over 20kilovolts/2000kilowatts to contract with the providers of their choice. By 2005, 63% of Japan’s energy industry was privatized, creating a frenetic race to reduce costs. In an industry fraught with inherent hazards, it incentivized those least likely to act responsibly to be themselves.

Anyone who’s ever worked in a corporate environment knows the drill: when revenues are flat, managers are pressured to create profits through other efficiencies, i.e. reducing costs through labor, material, capital or advertising expenditures.

In the United States, the BP oil-spill disaster was precipitated by deregulation of offshore drilling in the Gulf of Mexico. When the Deepwater Horizon drilling rig exploded and BP was unable to cut off the flow of oil, it brought to light the fact that there was no acoustic switch installed. Required by most other countries, it would have given BP the ability to shut down the well the day of the accident. Unfortunately for the residents of the Gulf Coast, the Bush administration had gutted these types of safety requirements, and the oil flowed for months.

Deregulation was sold to us with the common sense argument that corporations will act responsibly without oversight, just as we do when making our personal purchasing decisions. My Dad always warned me never to buy the cheapest of anything, and invariably I’ve regretted it when I’ve not heeded that advice. That’s because I stood responsible for the cost to correct that prior bad decision, but corporate executives don’t have that pressure. Whatever method creates the biggest profit — even if it threatens lives and jobs — is the modus operandi.

Ideally, corporations would self-regulate by adherence to a best practices manifesto which always had safety as its primary concern. Unfortunately, we live in a world inextricably tied to quarterly profit reports and stock prices. By filling today’s need as cheaply as possible, with little regard for events more than three months down the road, profits, and therefore management bonuses, are maximized. Most corporate executives know that when the day of reckoning for their decisions arrive, likely someone else will be sitting in that chair.

In a previous life, writer Greg Palast served as a lead investigator in several government nuclear plant fraud and racketeering investigations. These are his words regarding what he found at a nuclear power plant investigation in New York:

Back in the day, when we checked the emergency backup diesels in America, a mind-blowing number flunked. At the New York nuclear plant, for example, the builders swore under oath that their three diesel engines were ready for an emergency. They’d been tested. The tests were faked; the diesels run for just a short time at low speed. When the diesels were put through a real test under emergency-like conditions, the crankshaft on the first one snapped in about an hour, then the second and third. We nicknamed the diesels, “Snap, Crackle and Pop.”

The investigation at Fukushima will likely center around the location of the backup generators that failed, placed where the tsunami could damage them, but there’s no guarantee they would have worked anyhow. Safety regulations required a backup system, so in New York they got the cheapest generators they could find to comply with the letter of the law, disregarding its spirit. Had there been a SCRAM at the New York facility prior to Palast’s investigation, it’s likely those generators would have failed and those plants would’ve melted down too, all in the name of profit.

If this is what they do when regulations are in place, what would it be like if we relied in good faith on their promises that they would behave responsibly?

Military personnel have a propensity for dark humor. A standing joke was that our government and our people thought so highly of us that they were willing to send us to war using materials and munitions provided by the lowest bidder. You’ll never get more than you pay for in this world.

There are 23 boiling water reactors designed by General Electric in the US similar to those that are melting down in Fukushima. Fortunately, none are on the West Coast along the San Andreas fault, though some are in the Midwest around the New Madrid fault. Regardless, should some emergency or natural disaster cause a SCRAM at those reactors, will the backup diesel generators function properly, or will their driveshafts snap like twigs?

Things cost what they cost, yet men who wouldn’t dream of putting cheap brake pads in their car will buy generators that they know are insufficient to serve as backups at nuclear power plants. It’s the Achilles’ heel of capitalism — how to protect the collective good from corporate greed — but unfortunately the price is paid by all and not just those who circumvent regulations.

Larry Wohlgemuth was raised during the tumultuous 60s in the midst of sometimes violent civil rights and antiwar protests. After a stint in the Air Force during the Vietnam War, he earned a BBA degree from Washburn University. Wohlgemuth leans so far to the left he prefers to be called “Comrade”, and his book, “Capitalism’s Final Solution” is planned to be released in the spring, 2011. Larry is a contributor to Prose Before Hos and runs his own blog, It Begs the Question.