When an input is banned, firms search for alternative substances.
A day after The Associated Press documented the contamination in an investigative report, the top U.S. consumer safety regulator warned Asian manufacturers not to substitute other toxic metals for lead in children's charm bracelets and pendants.
Regulators and lawmakers reacted swiftly to the AP report, which found that some Chinese manufacturers have been using cadmium, sometimes at extraordinarily high levels. Congress clamped down on lead in those products in 2008, but cadmium is even more harmful.
Of course, Congress won't go so far as allowing even tiny amounts of lead in kids' toys because congress people believe it is not the job of consumers to protect themselves. The problem started with the heavy-handed ban on lead in kids' toys. It should come as no surprise that the manufacturers would adjust and not necessarily in safer ways. Unfortunately, the Chinese manufacturers are rational, self-interested people who have objectives that the US Congress cannot control. It reminds me of the following passage written by Adam Smith and posted recently over at Division of Labour.
"The man of system...is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably and the society must be at all times in the highest degree of disorder."
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