Mr. Bowen at No Watermelons Allowed has a nifty post up about private-sector standards, specifically mentioning one company he used to work for.

I've written before that some non-zero level of regulation is beneficial to society -- and I think that's true -- but much of the regulatory burden imposed by the government could be privatized and handled by companies such as ASTM International.

What's with ASTM, anyway? It is the acronym for the organization's original name, the American Society for Testing and Materials. Libertarians should love these guys, because they implement voluntary standards for materials that can be adopted in contracts and laws. The standards themselves are created primarily by subject matter exports who are familiar with the state of the art, not a pack of bureaucrats whose major consideration is self-perpetuation.

So what do they provide standards for? Just about anything. Soils for instance - wouldn't you like to know if your house is likely to go sliding off a cliff? ASTM has a test for the so-called "liquid limit" of soils, which can be used by civil engineers to measure soil stability.

And so forth. Companies could offer standards and testing at competitive prices, and then customers could listen to their recommendations and make their own decisions. Insurance companies could underwrite projects based on the evaluations of the standards companies, and everyone involved would have an economic interest in developing adequate standards. Unlike government standards, it would be easy to pin the blame when things don't turn out well. People could be fired, heads could roll, and reimbursements could be made from private funds. If criminal negligence was involved, people could be jailed; try sending a failed civil servant to jail when they screw up!

Standards companies would build reputations, giving weight to their seals of approval. Their business would be directly tied to the success of their standards, and their insurance company clients would have a great incentive to minimize costly disasters. The only required government involvement would be ensuring that the companies provide truthful and accurate information to their customers.

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