Environmentalism and Resource Economics (lecture 19 of 32)
These notes are from the lecture Environmentalism and Resource Economics, given at the Mises University. Any errors are mine, feel free to point them out so that I can correct them. This lecture was given by Prof. Block.
Air Pollution
- Market failure:
- Private entrepreneurs only account for private costs.
- Private enterprises do not account for social costs.
- This results in more steel being produced than is optimal.
- Nonsense: these are really results of State-failures to enforce private property rights.
- Socialists claim that their system is more environmentally friendly than capitalism.
- In reality, socialism is very harmful to the environment, as can be seen from history. See the USSR.
- Democracy isn't the answer either, as The State creates environmental disasters in the US too.
- In the 1830s, there was a spate of "environmental" lawsuites against factories for tort (property destruction) against private property owners.
- For the most aprt, these cases prevailed.
- This forced private companies to consider the costs of pollution, the "social costs".
- In the 1830s, "environmental forensics" began to develop as a science to find the source of various pollutions.
- This created incentives for corporations to use cleaner technology.
- In the 1870s, the courts declared, however, that "there was something mroe important than private property rights, and that is the 'public good'".
- Courts didn't enforce tort in teh US.
- Laws made it so that smoke-stacks had to be 300 feet high, so as to "hide the smoke property-rights violators", which was essentially like a pro-rape law.
- It was then claimed that there was "market failure", and a slew of ill-considered environmental regulations were passed.
Plastic
- Assume that everything ever said about plastic bags by environmentalists wackos is true.
- Lets say that you're asked at a super-market whether or not you want a paper bag or plastic bag.
- Each is $0.01, so the only incentive for paper is whether or not you want a paper or plastic bag.
- Otherwise, you are indifferent.
- What about the costs of disposing of paper/plastic?
Cost of Disposing Paper/Plastic
Bag Product Cost Disposal Cost Total Cost Paper $0.01 $0.01 $0.02 Plastic $0.01 $5.00 $5.01 - Now, which ones are you going to use? Usually, paper would be selected, but not with disposal socialism.
- Now, let's challenge the assumptions by environmentalists that we previously held to be true. Ruthje, a garbologist, has actually found that plastic doesn't harm the environment, as it is chemically innert. What really harms the environment is paper, such as the Yellow Pages ink.
Diaper
- Which diapers are more environmentally sound -- disposable diapers or reuseable diapers?
- We don't know, because we don't know the cost of disposal.
Nuclear Power
- The State actually subsidizes nuclear power.
- What we should do is take away all of the State-created advantages/disadvantages of nuclear power.
- Let free market competition reign, let the free market decide.
Love Canal
- Hooker Chemical Company dumped waste in a very-well contained waste container.
- The State seized their property by emminent domain, and Hooker Chemical Compnay warned them of that.
- But the State started drilling pipes, puncturing the waste container and causing waste to leak into the river.
- Somehow, even though Hooker Chemical Company was very responsible, they were scapegoated.
- In reality, very few people got sick from the waste leakage into the river.
Forests and 300-Year Old Redwood Trees: Tragedy of the Commons
- Tragedy of the commons.
- If someone owns a forest, they will cut down gradually, to preserve its capital value.
- If they don't own the forest, then they will cost it down as fast as they can, because the forest doesn't have any capital value to them.
- There are plenty of cows, but Bufallo nearly went extinct. Cows were privatized, Bufallo were not. So, Bufallo were nearly hunted to extinction, because no-one had the incentive to preserve capital value.
- Alligators nearly went extinct, but now are very common because of Alligator-privitization.
- Other animals to privatize:
- White Sharks.
- Elephants.
- Rhinos.
Oil Spills
- Exon oil-spills, because of drunken pilot. Why was the drunken pilot hired and kept? Because of the Disability Act.
- The problem with ocean and oil-spills is that the ocean is not privately owned.
- If we had privitization of the ocean, then we would have rationality:
- If you know an oil spill in your part of the ocean would drift to someone else's part of the ocena, you'd be sued; thus, you would be more careful.
- Charge higher rates to less safe ships.
Global Warming
- There are two ways in which we can screw up ourselves:
- Choke in our own dust.
- Get hit by a meteor.
- So, let the free market decide how to balance the optimum.
Over-Population
- There is no correlation between wealth and population density.
- Logically, no correlation should exist, either.
- The Netherlands Fallacy -- certain countries depend on other countries for their livelihood; the problem with this is that such is done on a voluntary basis.
- When the sun blows up, if we don't have very high technology, we're done for.
Comments (13)
Can we get references or additional info on the environmental lawsuits of the 1830's?
Published: June 27, 2004 9:33 PM
I don't understand the Plastic section. It seems to be saying that Paper bags are cheaper, but then it says paper causes ink pollution.
What does disposal socialism mean?
P.S. This is a very interesting subject (Economics and the Environment).
Published: June 27, 2004 10:42 PM
Sorry about that, that was unclear. At first, Block was proceeding by assuming that everything the environmentalists have said about plastic disposal is true. Namely, they say it is harmful to the environment. Thus, properly disposing of it -- if they're right -- would be more expensive.
However, then, Block challenged that assumption, stating that the studies of a garbologist actually determined that plastic doesn't harm the environment at all, since it is chemically innert. What actually harms the environment is when we dispose of paper that has ink on it, like the yellow pages.
Published: June 27, 2004 11:04 PM
Please excuse me if I missed the sarcasm or irony in the belowmentioned article posted on the Mises Institute website.
I was reading the critique of recycling ("Don't recycle, throw it away!") posted on your homepage. I am impressed at the ability of Roy E Cordato to phrase an insensible argument with such strong conviction. Given the unsourced quasi-statistic "If all the solid waste for the next thousand years were put into a single space, it would take up 44 miles of landfill, a mere .01% of the U.S. landspace.", I recommend commencing storage of this largely recyclable material at the office of Roy E Cordato at Campbell University, and channelling the leachate into his drinkable water system.
Perhaps this will help him to understand the importance of minimising the impact of waste on the ecosystems that support us. Perhaps then he will be more inclined to look at how we can channel waste into tradable resource, which any informed economist will inform us, makes better economic sense.
By-product is wasted profit. Sustainability makes economic sense - I'm working for a company for whom openly accountable sustainability has secured business advantages that has our competitors clamouring to catch up.
How embarrassing for the Mises Institute for showcasing dangerous misinformation.
Published: June 27, 2004 11:04 PM
Freja,
I'm afraid it is you, not the author you cite, Roy E. Cordato, who is confused. For those interested, the article Freja's referring to is here:
http://tinyurl.com/2tjs9
I'll admit, I'm confused by the author stating that the solid waste for the next 1000 years would take up 44 miles of landfill. The appropriate unit of measurement should be in acres. Miles merely measures distance, not area. Waste cannot be stored in a "distance". It must be stored in an area.
Also, Freja's attempt to turn Cordato's arguments on himself are amusing, but not forceful. The point is precisely that in the free market, waste is not going to be dumped on someone's yard or office, but well contained in an area. The reason for this is that private property rights would be enforced. Pollution is a violation of private property rights.
I propose that maybe a solution for waste we can't efficiently recycle is to send it to the sun, but that's for the free market to decide. The question is, which way is cheaper? Determining which is cheaper allows us to determine which is the most efficient. I doubt it would be cheaper now to send it to the sun, but at some point, the continual cause of maintenance may make it cheaper to send it to the sun.
Freja also fails to comprehend that it costs money and uses resources to dispose of waste and recycle it. The best solution is that which accomplishes the required task (preventing the violation of other's property rights) at the lowest price (thus, using the fewest resources). To recycle, we need to use resources, energy, and so-on and so-forth. As the article points out, the energy we use recycling more than cancels out the benefits, and recycling causes harmful pollution.
So, why is it that recycling is so-much promoted? I don't know. But I would guess it has something to do with the business' that have prospered under State mandates for recycling. Namely, special interest groups.
----
"There is a stupid party and an evil party. Once in a while, they get together and do something that is both stupid and evil. This is called bipartisanship."
Published: June 27, 2004 11:25 PM
Mark,
I'm not sure about the 1830's case (you'd have to e-mail Prof. Block), but regarding the later cases, Rothbard had a reference from For a New Liberty:
E. F. Roberts, Plead the Ninth Amendment! Natural history (August September 1970), pp. 18ff. For a definitive history and analysis of the change in the legal system toward growth and property rights in the first half of the nineteenth century, see Morton J. Horwitz, The Transformation of A merican Law, 1780 1860 (Cambridge: Harvard University Press, 1977).
Published: June 27, 2004 11:31 PM
Upon further research, I have found some refs on the 1830's lawsuits:
http://tinyurl.com/ytls8
http://tinyurl.com/37e5q
Block's paper seems to be a written form of his lecture.
Published: June 27, 2004 11:36 PM
"disposal socialism"
Garbage disposal. Most municipalities garbage collection services, and land-fill services are socialized by the city or the county. Either that, or one company is granted monopoly by the local government.
Tracy
Published: June 28, 2004 12:01 AM
David,
Thanks!
Published: June 28, 2004 11:11 AM
I'm curious, how does recycling plastics and metals use more resources than making or mining new plastics and metals? Does anyone have any references handy?
Perhaps the environmentally conscious should promote the greater use of glass bottles, which can be cleaned and re-used many times over.
Published: June 28, 2004 2:06 PM
Subject: Environmentalism and Resource Economics
While its not in the lecture It might be useful to know that all the surviving USA buffalo are descended from private stocks. Animals in private parks and animal taken into captivity by Hollywood for movie making. The European buffalo survived in private/ royal parks and hunting preserves.
I think the lecturer could have done better on the global warming and Over-population elements of the speech. People are genuinely concerned about these to problems and more must be said to answer their concerns. See below #.
The sun blows up in about a billion years from now only if you believe certain theories. Id want the technology to swat the meteor, that's why I'm in the national space society and the Mars society.
# Green house would go away as a problem if a large percentage of our farms switched to organic agriculture, no chemical fertilizers. The plants have to put more carbon based biomatter into the soil to 'buy' nutrients from the subsoil, if they weren't being bribed by chemical fertilizers not to do so. Why do we farm so that we starve the soil microoganisms? Government agricultureal extention work taught them to do so. Governments favours the regulatible, well semi-regulatible, chemical industry rather that the highly decentralized organic food markets and
there is no market instrumentality developed to get the farmer over the 3 to 6 year financial hump that converting to organic agriculture involves. State run Education systems either don't teach sustainable agriculture or throw in a heap of socialist/ anachist garbage in the course. An organic agriculture multinational would fix the problem in a few short years but that world be capitalism wouldn't it.
I'm kind of new at this business of reviewing lectures but I'm well read in the field of Austrian economics and environmental management. That’s where my degree majored.
Published: July 1, 2004 6:56 PM
I would like to clarify the author's comment about "44 miles of landfill". It is correct that miles is not the proper unit. Nor should it necessarily be acres. I believe the author intended to say "44 square miles". So long as the unit is the square of some distance, it makes sense.
I have heard a similar figure quoted by both the Cato Institute, as well as on Penn and Teller's Showtime series entitled "Bullshit!" They devoted one episode to debunking the idea that recycling is necessary, or even beneficial. Most of the same information in "Don't Recycle: Throw It Away!" can be found in that episode.
In the show, they interviewed a woman who worked for (to the best of my memory) a place called the Center for Economic Inquiry (CEI). I am, unfortunately, unable to find any information about this organization on the web, so perhaps that name is incorrect. At any rate, a woman from this organization stated that at the current rate of production, all the trash produced by the U.S. in 1,000 years could fit in one landfill of 35 square miles. The trash would be piled 200 feet high.
As they mentioned in the show, no one is actually suggesting that we build one large landfill like that. It's just for perspective.
Published: September 10, 2004 4:14 PM
Okay, I found out that the CEI place is actually the Competetive Enterprise Institute; I don't know where I got the Center for Economic Inquiry name from.
Published: October 8, 2004 5:55 PM