Liberty and Environmentalism: A Reconciliation

There are generally two sides to the issues of climate change and environmentalism. Typically, the ‘left’ is associated with concern (and sometimes alarmism) about global warming, and wants more government regulation to address environmental problems. The ‘right’, on the other hand, is associated with ‘denialism’, and downplaying both environmental issues and any need for significant action to ‘save the planet’. We can’t agree on the science, or how to respond to it.

Fortunately, we aren’t forever doomed to this quandary. Liberty and environmentalism are not opposed, they go hand in hand. The motivations for ‘alarmism’ and ‘denialism’ can be largely eliminated; and the two sides can come together to solve environmental issues. Enter Free Market Environmentalism, which is “a position that argues that the free market, property rights, and tort law provide the best tools to preserve the health and sustainability of the environment.”

Honest environmentalists, those whose goal is reasonable preservation of the environment- rather than promoting a political agenda- will find the free market approach an excellent solution and a way to connect with many who are currently resistant to their efforts.

The other side will also find the free market approach to achieve environmental preservation while resolving their healthy and justifiable concerns about other environmental ‘solutions’ that require impossible ideological compromises, such as radical proposals for extensive government regulations or even global government and global taxation.

Unfortunately, there will be those on both sides who have other agendas, including the ‘watermelons’ and others who use environmentalism as a Trojan horse to accomplish some ideological goal, such as increasing government power; as well as those who don’t care about the environment, those who want to keep excessively polluting, etc. We can only hope these types will be a diminishing minority.

We Can’t Agree on the Science, But the Scientists Beg to Differ

Polls show Americans are deeply divided over global warming; last year, Pew Research reported that 34% of Americans thought there was no solid evidence for global warming, while 36% thought there was global warming, caused by human activity. In a 2010 Rasmussen poll, following ‘Climategate‘, the number of Americans who believed there is a significant disagreement within the scientific community over global warming was 59%. And finally, in another poll taken last year, 69% of Americans thought scientists had falsified research on global warming.

Meanwhile, the scientists and scientific organizations have reached a near consensus that global warming is occurring and human activity is a significant contributor. Some challenge this by pointing to the Oregon Petition, where over 31,000 signatories with at least an academic degree reject the scientific consensus. The flaws with this petition are two: the list’s reliability is questionable in some cases; and most importantly, almost all of the signers don’t actually study climate science at all. Seriously, how could medical doctors and mathematicians be more authoritative on climate science than climatologists?

Of course, any consensus can be wrong. But it’s there nevertheless, and there’s no reason for anyone to have an ideological interest in it being proven right or wrong.

Denialism and Alarmism

As with other disciplines in science, you might think the public would overwhelmingly accept the conclusions of the experts. But the climate science community stands out as untrusted. It can’t only be blamed on the industry and the public resistance to dealing with the costs of reducing pollution, though that is a significant factor.

There’s an ideological motivation to denialism and alarmism. The green movement- needless to say- is closely associated with some sort of ‘leftist’, statist, anti-liberty, collectivist ideology themselves. For example, climatologist James Hansen has called for a global carbon tax scheme. There is Al Gore- um, nuff’ said. Environmentalists constantly call for a myriad of additional government spending and regulations- again needless to say- such as here, where they want to mandate “minimum efficiency standards worldwide for all products that consume energy, including buildings” and “substantial investment in public transportation.”

Because the green movement is nearly equivalent with ‘left-wing’ politics, it becomes a natural ally to other ‘left-statists’ who can use environmentalism to further their ideological cause. Hence, alarmism- hyping and exaggerating the situation- is in their interest, since it would further their cause even more.

Not surprisingly- most others are left to assume the only way to deal with any man-made climate change requires actions that are ideologically distasteful if not completely unacceptable, so they resort to disputing or denying the science. Often, this results in pretty unscientific, sometimes unethical actions on their part. It’s a losing strategy, to be sure.

The mere fact that environmental science and projects are widely funded by governments also fuels skepticism if not denialism for some. In my view, genuine skepticism, but not reflexive denialism, is quite justified in the face of government funded science coupled with the very political environmental movement that- with few exceptions- always calls for expanding the state’s power.

The fact that there is a free market solution completely undermines the ideological justification for denialism. Conservatives, Republicans, libertarians, and the like- all groups that have been quite denialist- need to educate themselves and take away the moral high ground the statist-greens have set up for themselves.

Free Market Environmentalism

Solving environmental problems is not a matter of environmental science but rather economics. Environmental science can only tell us about the environment, not how the production, distribution, and consumption of goods and services function.

An externality occurs when the cost or benefit of an exchange is not transmitted through the price. Some pollution costs are internalized today- i.e., the cost is included in the price. For example, a business is not allowed to dispose of old furniture by dumping it on someone else’s property. Rather, it must pay for garbage removal, or keep it and suffer the costs incurred from storing the trash. Either way it becomes another business expense that is ultimately transferred to the consumer, i.e. internalized.

However, excepting large, visible pollution as in the example above, it is widely agreed that the costs of pollution have been largely externalized. It was not always this way, writes economist Walter Block:

Up to the 1820s and 1830s, the legal jurisprudence in Great Britain and the U.S. was more or less predicated upon the libertarian vision of non invasiveness. Typically, a farmer would complain that a railroad engine had emitted sparks which set ablaze his haystacks or other crops. Or a woman would accuse a factory of sending airborne pollutants to her property, which would dirty her clean laundry hanging on a clothesline. Or someone would object to the foreign matter imposed in one’s lungs without permission. Almost invariably, the courts would take cognizance of this violation of plaintiff ’s rights. The usual result during this epoch was injunctive relief, plus an award of damages.[1]

In other words, the courts generally upheld private property rights, including cases where others trespassed by polluting the air, land, or water. A polluter was sued in a nuisance suit, required to compensate for his damage, and was ordered to cease their property rights violations.

What were the results of this free market approach?

First of all, there was an incentive to use clean burning, but slightly more expensive anthracite coal rather than the cheaper but dirtier high sulfur content variety; less risk of lawsuits. Second, it paid to install scrubbers, and other techniques for reducing pollution output. Third, there was an impetus to engage in research and development of new and better methods for the internalization of externalities: keeping one’s pollutants to oneself. Fourth, there was a movement toward the use better chimneys and other smoke prevention devices. Fifth, an incipient forensic pollution industry was in the process of being developed. Sixth, the locational decisions of manufacturing firms was intimately effected. The law implied that it would be more profitable to establish a plant in an area with very few people, or none at all; setting up shop in a residential area, for example, would subject the firm to debilitating lawsuits.[1]

When property rights- the essence of free markets- are fully enforced, there is no pollution externality. Thus, the environment is protected not only by altruism, but also the self interest of every individual and business.

Unfortunately, this system was abandoned for another goal: “economic progress”. Block continues:

But then in the 1840s and 1850s a new legal philosophy took hold. No longer were private property rights upheld. Now, there was an even more important consideration: the public good. And of what did the public good consist in this new dispensation? The growth and progress of the U.S. economy. Toward this end it was decided that the jurisprudence of the 1820s and 1830s was a needless indulgence. Accordingly, when an environmental plaintiff came to court under this new system, he was given short shrift. He was told, in effect, that of course his private property rights were being violated; but that this was entirely proper, since there is something even more important than selfish, individualistic property rights. And this was the “public good” of encouraging manufacturing.[1]

Not surprisingly, this stripped away the incentives that prevented pollution from becoming a serious problem. Anyone that took extra steps to be “green” incurred a cost that set him behind those who did not. The development of anti-pollution technology and forensic pollution industry were left behind. The costs of pollution were therefore externalized, not borne by the polluter or passed through the price system. But the cost to pollution remained and began to catch up with us. By the 1970’s, the government began to realize the consequences and started to take action.

Did the government reverse course and re-establish the free market approach? Sadly, no. What’s fun about simply enforcing property rights? The new way of doing things- consistent with the interventionist philosophy of the 20th century- was to pass a myriad of sophisticated government regulations further restricting property rights. Pollution was still allowed if you followed government rules. Of course, this suited both power hungry politicians and big business (which benefits from pollution costs being externalized as much as possible, and from the government regulations which disproportionately restrict smaller competitors due to economies of scale).

That same system remains in place today, more or less. More, actually- the number of regulations and the growth of the bureaucracy needed to enforce it have only increased. But that is not enough for today’s environmentalists. If they had their way, they would multiply it many times more: the constant calls for new regulations, taxes, and subsidies are almost deafening. And they have a point: pollution continues to be a problem. But instead of continuing with this messy system- which is neither moral or ideal from utilitarian grounds- we need to restore the free market environmentalism of the past. Yes, the past: we took two steps backward, so the past is ahead of us on this matter- it is progress.

How might the transition occur? If once again we could suddenly begin suing someone else for violating our property rights with their pollution, would it not cripple the economy? Absolutely. Would we not be sued for breathing- technically, that’s pollution too? Block has a ready answer for these objections:

First of all, although industry up to the 1830s was no great shakes compared to the modern era, it was not as non existent as implied by this objection either. Secondly, there is a reason for this: the burden of proof is on the plaintiff, so only the more egregious cases of pollution were in effect actionable, and de minimis was in operation, so that frivolous law suits, or ones alleging only tiny amounts of pollution were disregarded.

Another objection, a more reasonable one, is that if allowing pollution lawsuits again will not bring industry to a screeching halt, it will at least greatly disorganize it. Perhaps it might be better to allow for a 10 year waiting or warning period, so that industry could adjust, before imposing so draconian a set of measures

This option does indeed sound more pragmatic, but there are problems with it. We have said that pollution amounts to an invasion. Suppose that someone had the authority to immediately end an invasion, say, for example, slavery, and refused to do so for 10 years on the grounds that this would be too “disruptive” or “impractical.” Say what you will about such a decision on pragmatic grounds, it cannot be maintained that it enhances freedom.

Fortunately, we can have our cake and eat it too in the present context. That is, we can allow environmental lawsuits immediately, but also have a “waiting period” of perhaps 10 years or so in any case. This can be accomplished because of the 150 year gap, from approximately 1845 to 1995, when environmental forensics could have developed, but did not, thanks to a legal regime which was not conducive to it. The point is, had environmental forensics been developing over these last 150 years, but for some reason not implemented, and we were to suddenly allow environmental lawsuits for the first time at present, this would indeed drive industry to an abrupt halt. For the plaintiff ’s burden of proof would be easy to satisfy, under these assumptions. Moreover, there would be plenty of invasive pollution around to find people guilty of perpetrating.

…[F]or the plaintiff to be successful in his lawsuit he must prove beyond a reasonable doubt that a specific particular polluter is responsible for invading his person or property. But to do so, given the sad sorry state of environmental forensics at least at the time of this writing, will take time, plausibly, as much time as it will take for industry to end the error of its ways without any great disruption.[1]

Even more time for the transition will come from the interval prior to the adoption of free market environmentalism. It would take a while, of course, to persuade a critical mass of people to embrace this (or any other) environmental solution. The biggest barrier now is not that it is rejected- it is unknown. Unfortunately, few of those that claim to support free markets have ever been exposed to these ideas, let alone those who are not free market advocates. That may change soon.

To sum it up, pollution is garbage. You should not be allowed to trespass the property of others and dump your garbage there without their consent, period.

Tragedy of the Commons

It has been shown how private property is preserved from environmental destruction. The property owner may not harm the property of others, only his own (provided that such also doesn’t harm the property of others). Therefore, the incentive is to not harm at all, even if one does not care a wit about environmentalism, because they would be harming themselves by reducing their wealth. Rather, the incentive is to maintain or improve property, and thus the environment as a whole.

But what about non-private property, namely, the commons, and/or government property? With such resources (land, water, air, etc), the incentives are much different. Ludwig von Mises explained:

Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them, erosion of the soil, depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down trees without any regard for fresh shoots or reforestation. In hunting and fishing, they do not shrink from methods preventing the repopulation of the hunting and fishing grounds.

Once again, costs need to be internalized, through genuine privatization. The common objection, of course, is that some commons are difficult to privatize. Land may seem easy, but water and air? Modern technology is already advanced enough to overcome those issues, and that’s without much effort towards further innovation, because such development hasn’t been demanded yet. Besides, we have dealt with this before; after all, at one time it was thought that private ownership of the vast range in the western U.S. was impractical.

It may not be hard to admit that having property in the commons is problematic for the environment, compared to private ownership. But what about government ownership, on behalf of the commons? Rather than relying on the benevolence of all individuals to act in the interest of the commons, it relies on the benevolence of a smaller group of people, politicians and bureaucrats, to oversee and regulate for the benefit of all.

Unfortunately, the incentives for responsible environmental preservation by government is also much weaker than that of private property. They are disconnected from the signals of the price system, which means they can never match the efficiency and “customer satisfaction” achievable by the market. And their incentives as temporary stewards of public lands is to exploit them as much as possible in whichever way may help prolong their political career; long term environmental concerns often end up in the back seat.

To top it off, the environmental record of the state isn’t very green, either. For example, Russia and China- long associated with communism and certainly no free market environment over the last 100 years- dominate the listings of the most polluted places in the world, as compiled by the Blacksmith Institute. And in the US, the biggest polluter

isn’t a corporation. It’s the Pentagon. Every year the Department of Defense churns out more than 750,000 tons of hazardous waste — more than the top three chemical companies combined.

Yet the military remains largely exempt from compliance with most federal and state environmental laws, and the Environmental Protection Agency (EPA), the Pentagon’s partner in crime, is working hard to keep it that way.”

Further empirical evidence could be reviewed, to be sure; but economic laws remain the same regardless. Neither the commons or government owned land is ideal for the environment- usually it is quite harmful. Our goal should be to have the maximum amount of private property possible.

Animal Extinction

A fascinating report on 60 Minutes amply demonstrates how private property preserves – and rescues- animals from extinction. In particular, note the opponent- in this case Priscilla Feral of “Friends of Animals”, would rather the species go extinct, than to be preserved through private property in Texas. It’s important to remember, for some, environmental preservation is not actually their primary goal.

Animals going extinct, such as the Buffalo nearly did, are simple an example of the tragedy of the commons at work. Any useful or potentially useful animal is best preserved when they are privately owned. The cow, economically speaking, is quite similar to the Buffalo. Cows have long been private property, and have never come close to extinction. The owner of the animal suffers a direct loss if their beast is hunted to extinction; so they act to preserve it.

Waste Disposal: Throw Away, Reuse, or Recycle?

What should be done with waste? Shouldn’t we recycle and reuse more? Maybe, maybe not. To find out, the price system needs to function, which means the waste disposal industry should be fully privatized, so that- as with any other service- consumers get more and better choices.

In the free market, different kinds of waste will command different prices. Homeowners and businesses would be charged or paid for waste, depending on its usefulness and ‘recyclability’. The incentive under this system is to use more recyclable, environmentally friendly products and less un-recyclable, toxic products.

Overpopulation

There have long been worries about overpopulation. World population is now over 7 billion. However, humans continue to fare quite well. Economically speaking, we have never been better off, despite the fact that we’ve been adding billions to the population in our lifetimes alone.

Most resources on earth are underutilized at best, if utilized at all. The vast frontier of outer space hasn’t even been touched. The fact is, those predicting overpopulation through the years have failed to realize that the earth’s carrying capacity grows alongside the population: we don’t just consume more; we produce more, too. The rate of that growth is affected by the ability to make technological advances. Socialism- government intervention- is the factor that disrupts and slows this down. The serious problems of hunger and other shortages of goods and services can be resolved by expanding the use of private property/free markets and reducing government interventions.

How does the market prevent overpopulation? Theoretically, because things are scarce, earth’s carrying capacity is not infinite, regardless of technological advances. Yes, it is far more than we can imagine today, but at some point you would reach a limit, if growth continued indefinitely. This is another matter of supply and demand. Assuming we are still confined to this planet, should all resources become scarce (excepting human labor, of course), prices will rise, which will lead people to have less children. But before that could ever become a problem, cheap and reliable transportation to space is more likely to bail us out.

Energy: Dirty and Clean

Should coal and oil be banned? Will the free market limit us to solar panels and wind mills? No, and likely no (okay, theoretically it is possible that solar and wind become so cheap as to drive everything else out of the market). Previously de minimis, a Latin expression meaning about minimal things, was mentioned; in a free market, this principle would limit pollution to a trivial amount. There will never be zero pollution; the earth can handle a safe level. All sources of energy involve creating some pollution. Today’s ‘dirty energy’ sources, such as oil and coal, will still be useable, provided that they are used in a manner that doesn’t violate property rights. The internalization of pollution costs incentivizes the necessary investment and innovation in developing whatever methods needed to use all energy in a “clean and green” manner.

However this plays out- whether than means some form of energy ends up being used a lot, a little, or not at all- will be sorted out by the market via the price system. As long as the free market is allowed to function, there is no reason for environmentalists to be concerned about energy sources, as they are today. Being pro-solar or anti-coal will be as meaningless as being pro-lemonade and anti-milk.

Energy Independence

It is beyond the scope of this article to make the case for free trade.[2] Most people recognize that free trade is generally a good thing, though many unfortunate trade barriers remain today.

What does this have to do with energy independence? Kel Kelly puts it succinctly[3]:

“America is obsessed with the idea that we should be energy independent, yet no one worries that we are not “shoe independent” or “television independent” (since most shoes and all televisions are made outside America). Living by being independent means a life of poverty. Living by engaging in trade means a life of prosperity.”

The common objection is that we might be held hostage by producers such as OPEC. Unlikely as this is, the market deals with the problem quite well. Kelly recounts the 70’s crisis and how the free market handles the situation:

“A gasoline shortage occurred in the U.S. in the early 1970s due to price controls. When an Arab-led OPEC embargo raised the price of oil in the west, the U.S. government imposed price controls in the North Eastern United States. Whereas OPEC could not have otherwise harmed us, our politicians allowed them to do so. Had our government allowed prices to rise, oil would have flowed from other parts of the U.S. (and the world), to the North East. But since it was unprofitable to do so, this did not happen. The result was cars lined up for hours waiting to obtain some of the little gasoline that very few gas stations had.

We should not be bothered about a possible refusal by Arab or all OPEC countries to sell to the United States harming us—a concern often voiced by those who cry that we should not be oil-dependent. As prices rose in the United States, non-OPEC oil-producing countries, along with other countries that also purchase oil from OPEC and non-OPEC countries, would export oil to the U.S. because they could profit by doing so. Besides, even if there were no indirect means of obtaining OPEC oil, OPEC would not refuse to sell to us for long. For doing so would cut off much of their revenues and profits. They would be engaging in economic suicide.

In fact, an OPEC boycott would help us, and it would have done so in the 1970s had we not had price controls, and had the American oil industry been otherwise unregulated (i.e., free). As world oil prices shot up, American oil companies would have made tremendous profits, and would have therefore been in a position to locate, develop and produce much more oil, as well as other forms of energy, such as shale. Additionally, oil-dependent Western Europe would have needed to turn to the U.S. for their oil. The U.S. would have established itself as a much larger oil producing country and exporter. The OPEC countries, on the other hand, would have been deprived of oil revenues, and the smarter countries of the group would have broken from the OPEC alliance so as to resume bringing income into their country. All of these actions would have served to bring oil prices back down, and probably to a point lower than where they previously were.”[4]

So we reach another unconventional conclusion: energy independence is nothing to worry about!

Separation of Science and State

Wouldn’t we all be ignoramuses without state sponsored science, at least? History contradicts this view. Even though the British government did not fund science in the 18th and 19th centuries, the agricultural and industrial revolutions occurred and it became the world’s richest and most industrialized country. Meanwhile, Germany and France lagged behind, despite having more government science funding.[5] And just a short while later, the United States proceeded to overtake Britain economically, also without government science funding. Terence Kealey records a remarkable case of resistance to government funding of science:

“So strenuously did Congress disapprove of federal involvement in research that it refused James Smithson’s bequest in 1829 and only grudgingly accepted it in 1846. (His gift helped establish the Smithsonian Institution.)”

Separation of science and state is not only supported by history. Government funding crowds out private funding, and the former is disconnected from the price system, which makes it less efficient than the market. Unsurprisingly, the research agrees:

“When Edwin Mansfield surveyed 76 major American technology firms, he found that only around 3 percent of sales could not have been achieved “without substantial delay, in the absence of recent academic research.” Thus some 97 percent of commercially useful industrial technological development is, in practice, generated by in-house R&D.”

But science is a “public good”, critics claim. Individuals will not invest sufficiently because everyone else benefits for free, right? Wrong. First off, as we have noted, history seems to disagree. Secondly, the costs to understanding the science are quite high. Relatively few can actually comprehend the latest scientific research papers. Copying the science isn’t free for others, and by time they can put it to use, those who originally invested in the research have already benefited from it.

The benefits don’t end there, however. Anita Acavalos explains as the scientist

“incurs the risk of having his research scooped by someone else, he is more likely to in turn scoop someone else’s research as this free distribution system of science gives the scientist access to a greater pool of knowledge resources. This means that the speed by which scientists are able to adopt methods or ideas produced by other scientists and improve them in order to make greater profits in the area of applied research or improve their academic record in the area of theoretical research will be increased. After all, “technological progress is a gradual process, a chain of successive steps performed by long lines of men each of whom adds something to the accomplishments of his predecessors.””

Separation of science and state also isolates science from corruption or distortion by politics. Free market science would therefore eliminate the grounds for heightened skepticism of today’s scientific establishment, which is closely tied with government funding.

Further Reading

Perhaps the best, short piece on the subject is Environmentalism and Economic Freedom: The Case for Private Property Rights (pdf) by Walter Block- which I quoted heavily above.

Also useful is the book Economics and the Environment: A Reconciliation, published by the Fraser Institute. It can be ordered on Amazon or downloaded as a PDF.

On science funding the work of Terence Kealey is recommended, such as his book The Economic Laws of Scientific Research, and a lecture on You Tube here. Also see his article End Government Science Funding. The Myth of Under-provision of Science by the Free Market by Anita Acavalos is an excellent article, as is this post by Timothy Sandefur.

Why Other Environmental Solutions Are Unacceptable

As I have written in past Striking at the Root articles, economics teaches us that the free market is objectively superior to socialism of any form or degree– be it government regulations or government run industry. This is true from either a moral or utilitarian view. Let’s briefly recap:

Moral: The non-aggression principle (“don’t initiate aggression against others”) is well accepted by most people, with one exception. They don’t apply this moral standard to the state. The state, of course, is funded by taxation, which is based in initiatory aggression. Say what you will on how much of a state there should be, it’s not moral to initiate aggression, no matter who does it. Hence, the voluntary market is morally superior to the state. Also see my article “Our Natural Rights” for more.

Utilitarian: The state’s unique ability to “legitimately” initiate aggression changes incentives significantly, for the worse. The price system gives constant feedback to businesses on the success and failure of their actions. Scarce resources are allocated where and how consumers want them since that is where the maximum profits are. But the government cannot replicate this because they are not subjected to the profit-loss regulation, resulting in the calculation problem. It continues to receive money regardless of whether it’s actions best serve the needs of the “customer”. Thus, the government is inherently more wasteful than the market.

Now that we have made a general case for the superiority of free markets, let us consider a few specific alternative approaches.

Emissions Trading

According to Wikipedia, “[e]missions trading or cap-and-trade is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.”

While emissions trading schemes do attempt to use markets and prices, it’s actually a government-based approach troubled with the economic calculation problem. Martin Anderson’s reply to this solution is excellent:

“Now some even seriously propose that we should have economic incentives, to charge polluters a fee for polluting–and the more they pollute the more they pay. But that is just like taxing burglars as an economic incentive to deter people from stealing your property, and just as unconscionable.

The only effective way to eliminate serious pollution is to treat it exactly for what it is–garbage. Just as one does not have the right to drop a bag of garbage on his neighbor’s lawn, so does one not have the right to place any garbage in the air or the water or the earth, if it in any way violates the property rights of others.

What we need are tougher clearer environmental laws that are enforced–not with economic incentives but with jail terms. What the strict application of the idea of private property rights will do is to increase the cost of garbage disposal. That increased cost will be reflected in a higher cost for the products and services that resulted from the process that produced the garbage. And that is how it should be. Much of the cost of disposing of waste material is already incorporated in the price of the goods and services produced. All of it should be. Then only those who benefit from the garbage made will pay for its disposal.”[6]

Feebates

Feebate is a word made from two other words, fee and rebate. The plan involves taxing “polluting products” and using said funds to subsidize “clean products”. It can be implemented locally or otherwise and is supposed to be budget neutral for the government. If the polluting products leave the market, in theory, feebates can phase itself out.

Compared with some other solutions, the feebates plan sounds reasonable. Still, the free market is a much better approach for the environment. Feebates relies on taxation and still allows pollution (property rights violations) to continue indefinitely (in theory). Additionally, as a government program, it too has the calculation problem; the disconnect from the price system prevents it from attaining the efficiency of the market. Promoters of feebates should find the free market solution, which accomplishes the same cost internalization goals they seek, as an even better system.

Conclusion

The conventional wisdom is that pollution is an externality and therefore a market failure, and the state must step in to solve the problem. However, this is backwards: there has been a government failure to enforce property rights, which are the essence of the free market. The solution for environmental woes is the maximum possible use of the institution of private property. It is superior to the various government solutions offered today, and gives us the best of both worlds: maximum prosperity and ideal environmental preservation.

A reconciliation of environmentalism and advocates of liberty is not only possible but necessary. What are we waiting for?

Notes:

  1. Walter Block, Environmentalism and Economic Freedom: The Case for Private Property Rights (pdf)
  2. Case for free trade: here is a short video series to check out.
  3. Kel Kelly, The Case for Legalizing Capitalism (pdf), pg. 85.
  4. Ibid, pg. 188-189.
  5. Thomas Woods, Rollback, pg. 159
  6. Martin Anderson, “Pollution,” The Christian Science Monitor, January 4, 1989, p. 19.
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