Amidst all the craziness that has been the recent healthcare bill, I’ve found some “fun” in taking a closer look at what is called “green libertarianism” or “free market environmentalism.” It’s a really cool idea that basically argues that libertarian principles would work as great fixes for many of our environmental problems.
The concept deals with several aspects of the environmental problems that we see today. I’ll focus on overexploitation, pollution, clean-up, and overconsumption.
Overexploitation of environmental resources is a direct result of government interfering in the realm of property and ownership. When massive amounts of property are made communal or state-owned (i.e. national/state parks, highways, urban areas, transportation hubs, etc.) there is no ownership incentive to keep an area clean or use its resources efficiently. Instead, everyone who uses the area operates under the “someone else will take care of it mindset.” Often times no one takes care of it, and when someone actually does tend to the state-owned property it is, of course, the state — and we know how well the state manages its affairs. For more on overexploitation, see: “Environmentalism, Free Market,” Richard L. Stroup, The Concise Encyclopedia of Economics: Library of Economics and Liberty.
Pollution occurs primarily when a person who has been harmed by an externality of a transaction is not allowed to seek and receive total restitution for the harm done to them. For example, part of the cost of a semi-truck driving down the highway is the pollutants being pumped out into the atmosphere and dirtying the air. However, as there is no mechanism in the governmental model for those who live near highways to seek restitution for such pollution, the cost is paid by those who breathe the air, and not the trucking companies that release the pollutants. In a market system involving property rights, such a mechanism could easily exist.
For example, anyone living near the highway could bring suit against it for air pollution, and the highway would then charge truck drivers extra based on how much pollution a truck emitted, giving the highway company the money to compensate those breathing the polluted air. This is just one way it could possibly happen, the glory of the market is that no one really knows how such a problem would be solved! In other words, if industries had to internalize the costs of negative externalities like pollution, they would have an incentive to reduce them. For more on pollution and property rights, see: “Law, Property Rights, and Air Pollution,” Murray N. Rothbard, Cato Journal, Vol. 2, No. 1 (Spring 1982).
Clean-up would naturally occur in a market, because it entails a net gain on property values. If I clean up my land, it is now worth more — I have an incentive to do so. However, with such a massive amount of communal ownership, no one receives the gains from such cleanup, and thus no one has an incentive to carry out the cleanup in the first place. For more on clean-up, see: “A Hayekian Defense of Free-Market Environmentalism,” Mark Pennington, The Independent Review, Volume X, No. 1, Sumer 2005.
Overconsumption (or more accurately put, malconsumption), would not exist in a free market that was absent the distorting taxes and subsidies of the government. For example, a highway is a subsidy to trucking companies, as it allows them to move large amounts of items without having to bear any of the costs of the distribution infrastructure. In a free market, shipping very well might be more expensive, causing more and more local products to be able to compete with competitors based far away. Also, if people began to consume too much of a resource, it would eventually become to expensive to buy, as both its value and its cost would dramatically increase. As prices go up, consumers redirect their purchases to substitute items that entail the use of different, less costly resources, keeping a single resource from being overused. For an example of how overconsumption results from government policies, see: U.S. Farm Bill Causes Health Problems for Citizens, Elliot Engstrom, Rethinking the State, February 2, 2010.
While this is an oversimplified look at our environmental problems, it’s a basic sketch of how the market could easily correct problems that are a direct result of government intervention. I’ll be looking into this concept more and more as time goes on, keep an eye out for future posts on this.Published in