> In this case, the executives and shareholders who historically have shown to not be interested in taking a loss for the sake of safety.
If an executive is making a choice between profit and safety, then the regulatory regime has failed.
The only way capitalism can work is if risk and reward go together. If a company can profit from taking a risk, but does not suffer the true cost of a failure, then they will be incentivized to take irresponsible risks. The best example of this is 2008, where financiers gambled themselves into oblivion, but got bailed out when it went bad.
The maximum fine a rail company can face is $225k, even when loss of life occurs. Unfortunately, the regulatory regime you describe has been captured for roughly the past 80 years.
The reality is that the legal system makes it so difficult and expensive for claimants to recoup the harms they suffer. Causality is hard to prove and the claimants are up against corporations which have teams of lawyers and a court system which has made tort cases have a high burden of proof. This can make it difficult for claimants to win, even if they have a strong case. Plus, tort law is a complex area of law, and it can be difficult for claimants to understand their rights and to navigate the legal system.
It is even worse. It has been captured from for the past 120 years or so. The railroad companies tried to manage their own collusion, but repeatedly failed. So they helped farmers to get Congress to regulate the railroads with the ICC. Very shortly, the railroads had their people doing the regulation which very effectively managed the rates to eliminate discounts and other means of competition. With the end of such competition and stabilization provided by the government, it is easy for a big entity to take over and thrive.
They even got it to take control of the trucking industry for decades, mandating such things as being able to only have the truck full in one direction.
A government run legal system is just as ineffective as any of the other government run systems. The hope is nimble, private arbitration. Trust needs to be built up and reputations paid attention to.
> The best example of this is 2008, where financiers gambled themselves into oblivion, but got bailed out when it went bad.
This is an interesting example, but I think you need to go further in saying that the post 2008 financial system was even more irresponsible than it was before
If an executive is making a choice between profit and safety, then the regulatory regime has failed.
The only way capitalism can work is if risk and reward go together. If a company can profit from taking a risk, but does not suffer the true cost of a failure, then they will be incentivized to take irresponsible risks. The best example of this is 2008, where financiers gambled themselves into oblivion, but got bailed out when it went bad.