2nd September 2013
The economic way of thinking tells you that incentives matter and that therefore when something seems odd, you should look at where the incentives lie. Often the incentives for stupid and wasteful behavior are outdated government regulations that no one can be bothered to change. So it is with the seat belt demonstration, at least under American law (other jurisdictions undoubtedly have similar regulations).
Fear of being sued, and the horrible consequences of losing a lawsuit as opposed to the relatively minor inconvenience of pissing off customers or looking ridiculous. Case in point: ‘zero tolerance’ policies in schools and other places.
Want to know why you can’t buy a new 5-gallon flush toilet any more? Because the government requires manufacturers to offer 1.6 gallon tanks for sale, and it’s not worth the money making more than one size of tank. So too bad, disgruntled comsumer, your tax dollars at work are to blame, not the profit-maximizing manufacturer.