Laissez-faire SCUBA (Part 1): How an Unregulated Industry Triumphed

 
TrishOkCrop
Mrs. Hanson says “Free Markets are OK!”

We’ve all been told why government safety regulations are necessary. Why, without an active government inspecting and approving products and manufacturing methods, consumers will be helpless against the rapacious greed of capitalists. Without government oversight, capitalism results in a “race to the bottom” with manufacturers cutting corners and skimping on quality to protect their profits.

Perhaps in simpler times people could be allowed to make these choices for themselves, but consumers of modern goods lack the knowledge and ability to evaluate the safety and overall quality of increasingly technical products. Without government to protect them, consumers will be preyed upon by unscrupulous capitalists. All right-thinking people know this.

Believers in the free market have a different story. They believe the market can self-regulate for safety and quality, and do it better than government. If safety is important to people, the market will evolve mechanisms for ensuring it. Insurance companies will mandate safety, consumer organizations will rise up to monitor the industry, and so on.

The frustration for believers in the free market is that it’s impossible to say exactly what those mechanisms will be until they evolve, which means we’re always caught trying to argue a hypothetical against real dangers.

Instead of arguing unprovable hypotheticals, it would be a great help to find an unregulated industry that has enviable records of safety, quality, and consumer protection. What if we could find an industry that through some quirk of fate has been left almost totally untouched by government regulation, and see what happened? Even better, can we find an industry that has highly technical equipment, extreme training requirements, and which operates in an inherently dangerous environment? If we can find such an industry, we have a great counter-example to show how market forces protect consumers.

There are a number of industries like this, but perhaps one of the best examples is the recreational dive industry. For reasons both historical and practical, recreational SCUBA diving has been almost untouched by government regulation. There is no government licensing or training mandate for divers or instructors. There are almost no regulations governing the manufacture or testing of SCUBA equipment, with the sole exception of tanks, which as pressure vessels must be DOT certified under existing regulation having nothing to do with SCUBA. Other than that, there is no government oversight at all.

If you want to build a SCUBA regulator and sell it, you can do so without permission. If you want to buy some equipment and your own compressor and do some recreational diving without any training, licenses or notifications, you can do so. It would be insane and highly risky, but no one can legally stop you. That’s amazing in today’s world, where you need special licenses from the government for many similar activities.

And yet, SCUBA diving has become one of the safest major sports in the world – and certainly the safest sport carried out in an inherently dangerous environment. An active SCUBA diver is far more likely to be killed in a car crash than in a SCUBA accident in any given year. Equipment failures resulting in death are almost unheard of. In fact, most SCUBA fatalities are the result of health issues such as heart attacks from the stress of the dive or from human factors such as getting lost or trapped in caves or caught in strong currents.

This amazing safety record exists despite the fact that on paper SCUBA diving looks like one of the best cases for government regulation. It is a global activity carried out by millions of amateurs of all ages, fitness levels, and education. Many dive operations are run out of beach shacks you’ve never heard of and never will again unless you go back to that specific location. With an itinerant clientele, this is pretty much the worst-case scenario for fly-by-night customer fleecing. Dive equipment is made and sold by many companies around the world, often by mail order.

Theoretically, it should be hard for consumers to know if a dive operation or a piece of dive equipment is safe. If you listen to the arguments of regulators, this industry should be a minefield of shoddy goods, dangerous operators and snake oil salesmen. In reality, Dive equipment is generally of extremely high quality, and dive operators around the world run safe operations and provide excellent customer service.

How did this happen? How did SCUBA diving avoid government interference, and how did it manage to thrive and grow while maintaining enviable safety standards – without the help of government? To find out, I’ll look at the history of the industry over the next two days and compare it to other industries where regulations gutted innovation.

Laissez-faire SCUBA (Part 2): Regulators Without Regulations 

Laissez-faire SCUBA (Part 3): Coming Up for Air 

Members have made 17 comments.

  1. Profile photo of Tom Meyer, Common Citizen Contributor

    Dan Hanson:This amazing safety record exists despite the fact that on paper SCUBA diving looks like one of the best cases for government regulation. It is a global activity carried out by millions of amateurs of all ages, fitness levels, and education. Many dive operations are run out of beach shacks you’ve never heard of and never will again unless you go back to that specific location. With an itinerant clientele, this is pretty much the worst-case scenario for fly-by-night customer fleecing. Dive equipment is made and sold by many companies around the world, often by mail order.

    Theoretically, it should be hard for consumers to know if a dive operation or a piece of dive equipment is safe. If you listen to the arguments of regulators, this industry should be a minefield of shoddy goods, dangerous operators and snake oil salesmen.

    Precisely, and the same should hold for other activities like letting perfect strangers — whom you’ve never heard of ad will likely never see again — stay in your home. And yet, it works wonderfully, not only without but often in spite of legal regulation.

    I’ve had the privilege of reading the rest of the series and I can’t wait for it all to be up here. Our members are amazing.

    • #1
    • October 12, 2015 at 1:32 pm
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  2. Profile photo of OmegaPaladin Coolidge

    I’m curious to hear how this works, though expect some skepticism. I have dealt with people blatantly violating safety rules that can be directly related to accident prevention. I’m one of those evil regulatory people from libertarian nightmares – I even work for the government!

    I know about the Diver’s Alert Network, which is an excellent example of private insurance and emergency response.

    • #2
    • October 12, 2015 at 1:38 pm
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  3. Profile photo of Aaron Miller Member

    I look forward to the rest. Thanks.

    We live in an age of abundant and easily accessible information. There is plenty of misinformation as well, and efforts to obscure reality (see Google Search rankings). But we ultimately have more power than ever before to estimate risks and merits for ourselves.

    The great irony of the nanny state’s expansion is that we have ever less need of formal protections. We should be in a process of repealing agencies and programs which were easier to rationalize decades ago.

    The technologies that could free us instead empower those agencies to monitor us more closely and more constantly.

    • #3
    • October 12, 2015 at 2:16 pm
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  4. Profile photo of Dan Hanson Thatcher
    Dan Hanson Post author

    OmegaPaladin:I’m curious to hear how this works, though expect some skepticism. I have dealt with people blatantly violating safety rules that can be directly related to accident prevention. I’m one of those evil regulatory people from libertarian nightmares – I even work for the government!

    I know about the Diver’s Alert Network, which is an excellent example of private insurance and emergency response.

    Human nature is that you can expect some people to attempt to cheat safety, and some people who would like to cut corners unethically to save time and money. That’s not disputed. Instead, the question is whether the marketplace can regulate itself in a way to minimize or eliminate that kind of behaviour. The other question is whether the government can do the same as effectively and efficiently.

    The choice is not one between government regulation and giving up safety. The question is whether market-based safety regulation can work as effectively or more effectively than government regulation. There is no scenario under which safety is not regulated, assuming safety is a recognized need.

    And yes, Diver’s Alert Network is part of the solution, but that’s just one part.

    • #4
    • October 12, 2015 at 2:44 pm
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  5. Profile photo of Fricosis Guy Listener

    One thing SCUBA has going for it? Its customers are self-selected for risk taking. The fear of drowning is pretty darned hard-wired, so you have to have the right personality for SCUBA. My guess is that’s the kind of personality that wouldn’t be super litigious.

    Skiing and snowboarding had this for a while…until they made it almost too easy to get on a serious slope. My understanding is that liability insurance was a tough nut to come up with for a while.

    • #5
    • October 12, 2015 at 2:47 pm
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  6. Profile photo of Dan Hanson Thatcher
    Dan Hanson Post author

    Tom Meyer, Ed.:

    Dan Hanson:This amazing safety record exists despite the fact that on paper SCUBA diving looks like one of the best cases for government regulation. It is a global activity carried out by millions of amateurs of all ages, fitness levels, and education. Many dive operations are run out of beach shacks you’ve never heard of and never will again unless you go back to that specific location. With an itinerant clientele, this is pretty much the worst-case scenario for fly-by-night customer fleecing. Dive equipment is made and sold by many companies around the world, often by mail order.

    Theoretically, it should be hard for consumers to know if a dive operation or a piece of dive equipment is safe. If you listen to the arguments of regulators, this industry should be a minefield of shoddy goods, dangerous operators and snake oil salesmen.

    Precisely, and the same should hold for other activities like letting perfect strangers — whom you’ve never heard of ad will likely never see again — stay in your home. And yet, it works wonderfully, not only without but often in spite of legal regulation.

    Air BNB appears to be another great example – just not one I’m very familiar with, having never used the service.

    I wrote this article because I believe one of the primary ways the modern GOP is falling down is that it’s no longer promoting a positive case for liberty.

    Conservatives used to make their arguments for conservatism to the ‘other side’. Now most of our pundits preach to the converted, and we allow the left to define the issues and control debate, which we then react to defensively. We really, really, need to start making a positive case for limited government that the other side can understand. This is just my little way of trying to do that – to build some arguments and examples that can be used to refute liberal talking points and to show that there is a better way.

    • #6
    • October 12, 2015 at 2:51 pm
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  7. Profile photo of Dan Hanson Thatcher
    Dan Hanson Post author

    Fricosis Guy:One thing SCUBA has going for it? Its customers are self-selected for risk taking. The fear of drowning is pretty darned hard-wired, so you have to have the right personality for SCUBA. My guess is that’s the kind of personality that wouldn’t be super litigious.

    Skiing and snowboarding had this for a while…until they made it almost too easy to get on a serious slope. My understanding is that liability insurance was a tough nut to come up with for a while.

    Self-selection for risk-taking was probably part of the early industry, but I don’t think it is any longer. My wife is not a risk taker. On our last dive (the one where the photo above was taken), we had families with kids and an old couple about 70 years old diving with us. None of them seemed like the ‘extreme sports’ type. Diving has become very accessible, and is undertaken by people of all types.

    In any event, it’s not the fear of litigation that has driven safety activity in diving. Or rather, it’s not a large factor. But I’ll leave that for Part II…

    • #7
    • October 12, 2015 at 2:55 pm
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  8. Profile photo of skipsul Moderator

    Just as a joke:

    Wouldn’t unregulated SCUBA divers have trouble breathing?

    Great post! Went through the basic classes years ago, but never had the time to actually pursue SCUBA. Would love to have the time to do it again though.

    • #8
    • October 12, 2015 at 3:06 pm
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  9. Profile photo of Pilli Member

    I’ve been diving since the late 1960’s. There were no dive organizations like PADI and others at the time . I took a YMCA dive class and got a paper dive card as proof. Similar to my paper driver’s license at the time.

    The BIG THING they taught was safety, safety, safety. Your life depends on it. We learned dive tables, decompression stop depths and times. We had harassment dives where other divers would pull off your mask, your fins, shut off your air. We had doff and don exercises where we took our gear off at the bottom of the pool, surfaced and returned to put it back on. We used the buddy system. When we went into open water, we about as ready as we could be.

    With the advent of PADI et. al., safety and training are becoming a bit more formalized (but still unregulated.) That’s a good thing. They now have different levels of achievement.

    On a dive trip in St. Thomas, the Dive Master (yes, there is a Dive Master. Safety!) checked everyone’s dive cards to determine who would go on a wreck dive vs. a reef dive. He looked at the age of the card for proof of experience. Darn smart idea. Safety! Experienced divers could choose the wreck dive. Inexperienced got the reef dive. No beginners in deep water (over 60 feet) on a wreck (dangerous).

    • #9
    • October 12, 2015 at 3:06 pm
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  10. Profile photo of Dan Hanson Thatcher
    Dan Hanson Post author

    Pilli:I’ve been diving since the late 1960′s. There were no dive organizations like PADI and others at the time . I took a YMCA dive class and got a paper dive card as proof. Similar to my paper driver’s license at the time.

    The BIG THING they taught was safety, safety, safety.

    Yep. This is absolutely normal. In fact, when my wife and I went diving this year we hadn’t dived in a few years, and therefore were not allowed to dive at all until we had taken a refresher. The dive charter we were with offered that service, so an extra instructor came along and went through equipment drills with us until he was satisfied that we were competent, then we went in the water with him and had to do bouyancy control demonstrations and show that we remembered all the safety rules and signals – then he made the first dive with us anyway because he hadn’t signed off our logbooks yet. There was no way anyone was going to rent equipment to us or take us out to a dive site until we could show that we were current and competent.

    And all this without a single government regulation in the mix. Or rather, all of this because there were no government regulations in the mix.

    Contrast this behavior with private aviation. As a SCUBA diver, I can’t get any services at all without showing a recognized certification card. I can own my own equipment, but then no one will fill my air tank without validating my certification. I can’t get a divemaster to take me to a dive site unless I’ve dived in the last year and there’s an entry to that effect in my logbook. Basically, the industry stops me from diving unless I’m safe to do so.

    I’m also a licensed pilot. But you know what? I can pull my airplane up to a pump and have it filled, and no one will check my logbook for competency and currency first. I can file a flight plan with just my pilot’s license number, and no one cares whether I’ve flown in the last decade. Why? Well, because that’s the government’s job, right? The government does mandate currency requirements – they’re just not capable of enforcing it in all circumstances. When the government takes over the role of safety guarantor, everyone else backs off.

    This happens surprisingly often. Pilots go out and fly their own planes once a year, or don’t fly for a few years, and then they take them out and crash. And so long as that person has a license and a valid medical, there’s nothing anyone would do to stop them. In that sense, SCUBA is much more heavily regulated.

    • #10
    • October 12, 2015 at 3:33 pm
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  11. Profile photo of Z in MT Member

    OmegaPaladin:I’m curious to hear how this works, though expect some skepticism. I have dealt with people blatantly violating safety rules that can be directly related to accident prevention. I’m one of those evil regulatory people from libertarian nightmares – I even work for the government!

    I know about the Diver’s Alert Network, which is an excellent example of private insurance and emergency response.

    Omega,

    I hope you don’t work for OSHA, or there may be heated words.

    • #11
    • October 12, 2015 at 4:34 pm
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  12. Profile photo of iWe Reagan
    iWe

    Dan Hanson: I wrote this article because I believe one of the primary ways the modern GOP is falling down is that it’s no longer promoting a positive case for liberty.

    Absolute agreement. We need to be seen as the party of Freedom. That requires a pro-Freedom agenda.

    • #12
    • October 13, 2015 at 7:00 am
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  13. Profile photo of OmegaPaladin Coolidge

    Dan Hanson:

    Human nature is that you can expect some people to attempt to cheat safety, and some people who would like to cut corners unethically to save time and money. That’s not disputed. Instead, the question is whether the marketplace can regulate itself in a way to minimize or eliminate that kind of behaviour. The other question is whether the government can do the same as effectively and efficiently.

    The choice is not one between government regulation and giving up safety. The question is whether market-based safety regulation can work as effectively or more effectively than government regulation. There is no scenario under which safety is not regulated, assuming safety is a recognized need.

    And yes, Diver’s Alert Network is part of the solution, but that’s just one part.

    My regulatory world is environmental and occupational safety, though I also follow process safety to an extent. I have a family background in nuclear / radiation safety. I help a government agency comply with safety rules.

    The problem that I see is the safety does not directly advance the interests of the company / shareholders / government. Workers are often easily replaceable. Safety does not provide a direct benefit to the bottom line, outside of process safety,& even that is ignored

    Nuclear power is an interesting side case as the industry regulates itself (see INPO), in addition to the government regulation. This is good, because it keeps the regulations relevant to reality, but it also creates barriers to market entry.

    • #13
    • October 13, 2015 at 11:47 am
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  14. Profile photo of OmegaPaladin Coolidge

    Z in MT:

    OmegaPaladin:I’m curious to hear how this works, though expect some skepticism. I have dealt with people blatantly violating safety rules that can be directly related to accident prevention. I’m one of those evil regulatory people from libertarian nightmares – I even work for the government!

    I know about the Diver’s Alert Network, which is an excellent example of private insurance and emergency response.

    Omega,

    I hope you don’t work for OSHA, or there may be heated words.

    No, not OSHA, though one of my classmates ended up as a compliance officer there, and two of my instructors were former OSHA employees.

    • #14
    • October 13, 2015 at 11:49 am
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  15. Profile photo of CuriousKevmo Member

    Interesting take Dan. I’ve had the pleasure of being on about 40 or 50 dives and was all set to do so again last week before a cold took hold.

    There seems to be a sense of personal-responsibility in the dive community (despite it being overrun by “no-collar” types) that isn’t present elsewhere.

    My wife and I caught colds on our way to Hawaii and so didn’t dive. We could have gone ahead with our reservation, descended and maybe popped an ear drum but we chose not to. I’m not sure I see that same level of personal responsibility in other endeavors.

    People have been known to get the bends flying home too soon after diving, I wonder if any have ever attempted to sue the dive operators? Seems like the natural reaction to lots of lawsuits is regulation.

    • #15
    • October 13, 2015 at 1:34 pm
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  16. Profile photo of Dan Hanson Thatcher
    Dan Hanson Post author

    Lawsuits in diving are quite rare, and juries seem to put more onus on the diver for his or her own safety, precisely because it’s a self-regulated industry and therefore there must be an assumption of risk. The fact that all divers have to be certified puts the onus for safety on them. This is a good thing, as it helps to keep down costs and puts responsibility where it belongs.

    From Alert Diver Online, where three legal experts weigh in on SCUBA liability:

    When a diver signs a liability release and assumption-of-risk form, he is acknowledging that he understands the risks inherent to scuba diving and that he releases the operator from responsibility should he be injured or die. Many diving waivers include a statement of safe diving practices and require the diver to review and agree to follow them.

    The duty of the operator is to safely transport the diver to the dive site and ensure the vessel and crew have the necessary safety equipment and procedures on the surface to support a safe experience for the certified diver. The duty of the certified diver is to ensure he personally has the proper gear, training and skills necessary to ensure his own safety underwater. The bottom line: You are responsible for your own safety while diving.

    They mention a case where a diver failed to disclose a heart condition and then died of a heart attack while diving the Andrea Doria. The family tried to sue the dive operator, but the jury held that the diver’s responsibility to declare any health issues was the proximate cause and threw out the case.

    Apparently, it’s less common for equipment manufacturers to be held liable as well. In general, the legal systems seems quite sane around diving matters – unlike general aviation where there have been some crazy liability lawsuits.

    Dive operators have been found guilty of negligence for things like failing to do a count after a dive and leaving a diver in the water at a dive site, or failing to initiate rescue procedures in a reasonable amount of time when a diver went missing. But in general, the onus for safety is put squarely on the individual. As it should be. I am certain that your hypothetical case would not be held against the dive operator, as incorporating air travel into your decompression plan is part of a diver’s training and is the diver’s responsibility.

    • #16
    • October 13, 2015 at 2:23 pm
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  17. Profile photo of CuriousKevmo Member

    Interesting because it doesn’t seem to be the case in some many other areas.

    That said, I do quite a few race track days on my motorcycle and its a similar set up. It’s up to the rider to make sure they have the chops. They do tend to do a pretty exhaustive machine inspection and they enforce varying levels of safety rules around passing and such but it seems to be a growing hobby without much litigation.

    • #17
    • October 13, 2015 at 3:20 pm
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