No, you can’t simply point that out, because that’s a statement of faith, not of fact. It also ignores that he’s probably dealing with value judgments that your definition of “efficiency” doesn’t take into account.
I’m not sure what the original author intended to say, especially because of the term “transitional costs”. But referring to setting a floor for human suffering makes me wonder if he’s talking about the government preventing market forces from allowing something to fall below a certain standard.
Market forces will cause some things to fall below standards set by government. It’s not because all capitalists are “evil”, although some are. It’s because in some cases, economic incentives will work out so that standards do fall, especially where there is an information imbalance.
One good example is workplace safety. Running a safe operation is almost always more expensive than running an unsafe operation, at least in the short term. If all accidents are fully paid for by the employer, then safe operations tend to work out to be cheaper in the long run. But when employers are focused on the short term, which they often are to satisfy investors, or because they act like something with a small chance of happening isn’t going to happen (praxeologists should study psychology to understand that many humans do act this way), then they have a clear incentive to cut corners on safety. Then they can outcompete safer competitors on price. Consumers, even if we assume that they all do have the best interests of workers at heart, would have a very difficult time influencing workplace safety practices because they would have very little information about the workplace safety practices, not to mention that they probably wouldn’t know what safe practices are in most cases.
The other players in this scenario are the workers. There probably are many workers who have a good idea about safe practices, but there are many who won’t, especially young workers or workers new to the industry. In any event, the unsafe workplace only needs to find enough workers who don’t know or care enough about workplace safety when compared to other matters (like putting food on the table or getting a foothold in the industry) that they will take jobs with the unsafe employers. This creates a downward pressure on other employers, and you get more and more workers who end up taking jobs with unsafe employers.
Another factor that needs to be addressed is whether the costs of accidents really will be internalised. Employers are going to internalise costs like lost production time and property damage. It’s questionable how much worker injuries will be internalised. It’s easy to say that, theoretically, if the employer is responsible then it will have to bear the full costs of the worker’s injury, including medical and lost wages. In practice, it’s way harder. Workers will have to prove that the accident was the employer’s fault and that they weren’t contributorily negligent. This takes time and money, and many of the workers won’t have the resources to fight this sort of battle to begin with.
So as an alternative to this race to the bottom, most people are happy to impose minimum safety standards on workplaces. Government isn’t stopping employers from exceeding these standards, and some do exceed them, though for many, market pressures, laziness, incompetence, and human psychology make them just meet or fall below the standards, at least until regulators fine them.
A similar situation to workplace safety is consumer safety. A good example is the airline industry, where consumers really have very little understanding about the differences between a safe airline and an unsafe one. Again, there are competitive pressures which make many small airlines fall below reasonable safety standards (the large international carriers tend to be pretty good because they are more heavily regulated, they’ve been in business for a lot longer, and they have more financial and human resources to deal with safety), and most consumers really have very little idea about how to judge if an airline is safe or not. I’ve spoken with several pilots who are in the situation of the worker in the first example, and they’ve openly said that they’ve accepted jobs with unsafe employers because there aren’t that many jobs to go around with safe employers, and that this is extremely common in the industry. They’re at least informed and can make a decision balancing the risks against the benefits. The flying public is not.