The following is a guest submission by Joey Simnett, a student of the University of York and member of Circle Bastiat Richmond.
Every day Neo-Malthusians are on the prowl with fellow free market bashers, pumping out book after book on the supposed environmental catastrophe and energy shortage. While some points concerning environmental degradation are true and should not be taken lightly, the proposed solutions often come into conflict with freedom and the elevation of living standards. They are usually calls for increased regulation and taxes on industries, the promotion of “green jobs” and greater state power over the means of production. In short, many environmentalists are “watermelons”: green on the outside, red on the inside.
However, like so many problems in the world today, environmental degradation is a result of governmental failure, not of free market forces. In an almost fully free market society with staunch property rights, environmental problems are much smaller than less free societies. When companies pollute private property, it constitutes an invasive force, much like robbery or arson. Polluters are then liable to criminal law or the prospect of being sued. After all, what better incentive is there for “greedy businessmen” than the prospect of losing money? Privatising rivers would mean that people would think twice about dumping plastic or toxic waste into someone else’s property. It is much the same in shops, where people dump very little in stark contrast to public streets.
The public or communal ownership of land gives rise to this “tragedy of the commons,” where there is little to no incentive to take care of land save for grossly inefficient and corruptible government oversight or an unreliable sense of public duty. It is also a problem for natural resource consumption, as people will strip the land if they know that others will before they do. Simply look at the state of the Amazon rainforest which is not privately owned and is thus ravaged, or the near extinction of the American Bison versus privately owned cows.
It used to be that pollution was dealt with legally in this way, but government power was used to circumvent this, such as the legislation that required smokestacks to be greater than 200m high, making companies less liable to pollution as it spread over vast areas and caused the acid rain episode in the 1980s. It has been the selfish interests of businessmen to socialise risk, not the benevolence of laymen which has caused much “environmental legislation.” Like so many regulations, they are often used to knock out competition from smaller firms who cannot buy expensive lawyers or pay off officials, resulting in increased market share for big business and a distortion of consumer desires. One has to look at the enormous rewards that certain groups receive through political environmentalism rather than legal means to understand that there are many incentives involved which are not all benevolent.
Air pollution presents a different challenge, as it is extremely difficult to privatise areas of atmosphere. However, even if it was not feasible to do so, economic development and the scarcity of pollutants would reduce the amount of damage. The air today is much cleaner than it was a hundred years ago because it has become more profitable to be so because of greater environmental concerns of consumers and the modernisation of industry. Moreover many of the air pollution problems today are the result of the change from legal means to political means, and when aggression is not punished, there is little incentive to stop it.
However, one might ask whether property owners would care for places such as deserts or rivers when there is very little use for them economically or whether they would turn them into ugly parking lots or high-rise housing. This may not necessarily be a problem as they can be vessels for equity, as investors make sure they are clean and attractive to be sold on for higher prices, just like the stock exchange. Moreover, if an owner did transform them into something “ugly,” the fact that it was profitable would indicate that a need was met and people were helped. If this went on for long enough scarcity would increase and so prices would rise, indicating that “going back” to keeping nature intact would be profitable compared to other important social needs such as housing.
The energy crisis has come about largely because the free market has not been allowed to operate efficiently. Resources are ultimately rationed by price, and government interventions in the market have distorted the signalling function of this system. As oil becomes more scarce, the price increases and the profitability of green energy increases relative to it. However the distortions caused by governments mean that people may continue to use oil at a low price until it runs out, with no substitute set up in reaction to naturally higher oil prices, or to suffer because of high prices resulting from cartelisation.
“Green energy” subsidies can only harm the prospect for renewable energy, as if it was profitable and feasible compared to other forms it would already have developed greatly. In fact it cannot be sustained unless done so through the real economy and subsidies must necessarily harm other industries which consumers patronise through taxation. If green energy is to truly be achieved then it must have a low opportunity cost compared to oil and government barriers to this will make it unrealisable. It is also important to note that as technology progresses, new ways of producing energy will become available and we will find new ways to harness materials which we find from digging into the Earth’s core in the near future.
It is also important to see that the problem is not pollution per se but the aggression upon persons and property through the medium or air, land or water. It is therefore right to deal with it in terms of property violation, rather than a one-size-fits-all government program that is like trying to fit a circle in a triangle with a few corporations escaping through the cracks.