Capitalism didn't save the miners

The WSJ published a ridiculous article yesterday that claims Capitalism saved the Chilean miners, and opens with a boldface lie when writer Daniel Henninger proclaims, "It needs to be said." Does it, Daniel? Does it really?

Henninger believes the rescue of the miners is a smashing success for free market Capitalism because without that nifty drill bit, which was the only tool capable of freeing the workers, those blue-collar suckers would still be trapped in the belly of the earth with Satan and his fiery army. You see, the drill bit was developed by a company for a profit, which obviously means regulation and anything else that stands in the way of the righteous free market, is killing Chilean miners. Or something.

In reality, Capitalism helped contribute to the mine disaster. That is, hyper-Capitalism, the most warped version of Capitalism, which sacrifices regulation in the name of profit, led to mine disasters that culminated with 33 men being trapped deep below ground in darkness for 69 days.

Dick Blin, a spokesman for the International Federation of Chemical, Energy, Mine and General Workers' Unions in Geneva, says the Chile accident is a sign that the workplace safety culture needs to change in Chile. As proof, Blin cites the fact that the San Jose Mine was closed down for safety violations in 2006 and 2007.

Chilean safety officials pointed out at the time that the mine needed a second entrance, so that miners would have another way out in case of disaster.

The mining company resumed operations without making necessary changes. The mayor of the nearby town of Caldera, Brunilda Gonzalez, has alleged that regulators were bribed to allow the mine to re-open.

The BBC reported earlier this month that the San Jose mine has been sued by members of the miners' families. The familes are also suing Sernageomin, the state regulator of mines, for allowing the company to reopen in 2008 following its closure a year earlier over a death. But this kind of safety lapse is par for the course in Chile.

In 2007 and 2008, at the height of the boom in copper prices, there were more deaths in Chilean mines than in any other years during the decade. In 2007, when the copper price averaged a record $3.24 per lb, 40 miners died in accidents. In 2008, when copper was at $2.88 per lb, the death toll hit 43. The average for the decade was 34.

In contrast, the safest year in the history of Chilean mining was 1999, when the average copper price fell to just 72 cents, its lowest level in over 10 years, a consequence of the Asian crisis.

Even when the free market was flush with cash because of the copper boom, Chilean miners continued to die. In fact, as the value of copper spiked, more workers started dying during the rush. There appears to be an almost direct correlation between the pace of production and worker safety. (Overall, there have been less deaths in the copper mining industry since the 1980s, but again that is because of internal safety standards, and not because of the glories of the free market).

The reasons behind the correlation seem fairly obvious. Yet, for whatever reason, some people are mystified.

"It shouldn't be the case that when the price rises, the number of accidents rises too," said Andy King, national co-ordinator for health and safety at the massive North American trade union, United Steelworkers.

"In fact, the opposite should be the case," said Mr King, who visited the San Jose mine last month and has been deeply critical of safety standards at Chilean mines. "The higher the price of the metal, the safer the mine should be, because the company has more funds to improve safety."

Oh, Andy. You sweet thing. Why would they spend more money on safety regulations when they can shove the extra cash in their own coffers? Mining companies don't like closing down operations to tend to meddlesome safety standards because they lose money. Frankly, it's less expensive to cross the occasional worker off the company picnic list than totally revamp a dilapidated mine.

That was Massey Energy CEO Don Blankenship's reasoning while overseeing a corporation built on criminal neglect. Blankenship thumbed his nose at regulators - not out of some weird disdain for proper ventilation - but because he resents big government ordering him to spend money to improve safety standards so his employees won't die. Blankenship, a die-hard fan of free market Capitalism, scoffed at efforts to regulate the mining industry, calling such attempts "as silly as global warming."

In 2009, the federal Mine Safety and Health Administration cited Massey Energy's Upper Big Branch coal mine for 495 violations and proposed $911,802 in fines. Since 1984, the mine had been cited for 600 violations in less than a year and a half, some of them for not properly ventilating methane, the same combustible gas suspected in the explosion, according to the AP. The disaster at Upper Big Branch was the worst of its kind in 40 years.

When Shift Foreman Luis Urzua, the last worker out of the San Jose mine, embraced Chile's President Sebastian Pinera, he didn't rejoice about the glories of the free market. Instead, he said, "I hope this will never happen again." Pinera now says he's going to review safety conditions so that "never again in Chile would people be allowed to work in such inhumane conditions," and confesses the San Jose mine has a "long history" of accidents.

Now, four more miners are trapped underground in a mine in southern Ecuador after a cave-in early this morning. Maybe the WSJ can publish another article about why Wall Street should hand out more bonuses since the free market saved the day again.