Miron on nuclear power and liability limits

Jeffrey Miron writes:

The recents events in Japan have, predictably, unleashed a new debate over the risks of nuclear power, with strong opinions on both sides.

I am not remotely qualified to judge whether the damaged Japanese reactors pose significant risks, but one point about nuclear power is beyond dispute: it always receives substantial subsidy from government. This consists of both direct payments toward the costs of building plants, along with insurance against full liability for accidents.

So a simple way to evaluate competing claims over safety is to eliminate both kinds of subsidy and find out whether the private sector really think nuclear power is profitable, if investors bear all construction and insurance costs.

It sounds reasonable enough, but I'm not sure how much I trust US courts to give reasonable damages. By most accounts, they are ridiculously over-generous.

For instance,

IN 2001, New York City was hit with a $14,000,000 judgment because a subway train didn't stop in time to avoid hitting someone who was lying on the tracks, apparently trying to commit suicide.

Ultimately, the courts are a branch of government, and the legislature and executive have a responsibility to ensure they behave responsibly. This shouldn't involve favouritism for "key industries" like oil and nuclear, but it does seem that some across-the-board limits on compensation are required.