Pollution and Property Rights in Hong Kong
The Stalwart is reporting that smog and air pollution in Hong Kong is causing a brain drain and talent diaspora. The root cause seems to be soot created from mainland factories who are not held liable for their negative externalties.
While somewhat tangential, for those unfamiliar with Ronald Coase, he is credited as single-handedly influencing several generations of economists and lawyers - most notably those comprising the Chicago School - with his social costs theory of justice. This was in direct contrast to the rights-based approach that had been effectively used for centuries.
The classical scenario used by Coase et al., is that of a farmer's wheat field which is bordered by a railroad track. At some point while moving along the tracks, a train causes a spark and sets the field on fire. In a propertarian-based legal theory, trespass would be taken into consideration as would the question of who was there first.
Whereas in a Coasian framework, the costs associated with a farmer moving his crops versus the costs of building a spark-prevention on the train are weighed. Whoever has the highest costs, or rather, has the most to gain or lose, is the party the law should side with.
While it is doubtful that politicians in China use a Coasian framework to manage disagreements, unfortunately this 'utilitarian, of the greatest-good' reasoning has become the entrenched legal theory that many Statists of all stripes have used to dodge accountability and justify a slew of socialistic confiscation (from eminent domain to outright nationalization).
See also: Undermining Proprety Rights: Coase and Becker; The Spectrum Should Be Private Property
Comments (4)
TokyoTom
Tim, sorry, but I'm a bit puzzled by your connections between the story of Hong Kong suffering from air pollution coming from mainland China and Coase.
I understand some of the Misean criticisms of Coase, but I imagine that whatever the problems flowing from his errors in thinking, the problems in China and Hong Kong can not be attributed to him.
How about using this example to suggest a Misean anlysis of the problem, to be contrasted against a Coasian view?
Published: May 26, 2006 9:43 AM
Tim Swanson
TT, I edited the post slightly to convey the point better. I believe you are correct, that the politicians in China probably have no clue who Coase is; I thought it was a good illustration of the lack of respect for property rights.
At the same time, I believe the Coaseans would say the same thing about the China issue as they do on others: it is violating Hong Kong's property, but the social benefits of mainland development outweigh the social costs of Hong Kong's pollution.
Published: May 26, 2006 2:23 PM
Paul Genle
Having lived in Hong Kong and spent an hour or so doing the necessary coughing before I can go to sleep, I do not think you can say that the benefit to China outweighs the harm that the Mainland does to the Mainlnad people and to the Hong Kong people.
Also Hong Kong pollutes the air. They cannot blame it all on the Mainland.
Only when the Beijng Olympics was scheduled to come, did they do things to clean that up.YEA IT WAS WORTH IT! You can clean pollution up. China has 7 of the 10 most polluted cities in the World. If you live and the USA and do not live in China as real residence for 9 years like me, it is all nice and theoretical.. Coming here for a couple of weeks is being a tourist. It is not debatable. China needs to clean up its act and it is doing so slowly.. It is not worth it to give peole here shorter life spans, the greater development of asthma, traffic cops an average lifespan of 45 years, because they stand in traffic all day, all kinds of stuff. I challange anyone who thinks pollution is okay, to live here for one solid year in one of the big polluted cities of China. We have the intelligence to make things better through engineering and we should use it. I am glad America has. I am always so glad when I come home to America for a visit and can breath. Yes America made the right decision. Your lungs are happy. The best thing I learned when I got my PhD was to quit worshipping theories. Also you heroes should not be economists. Your heroes should be your family and your close friends.
Take care, Paul
Published: December 8, 2008 9:16 PM
Paul Genle
Of course I mean that the costs should be paid by the polluter. They should pay for the engineering to stop the polution. And they can do it. Many businesses wouldlove to locate in tha part of China, in Guangdong, near Hong Kong. They can do activites that are not so polluting.
I RESPECT EVERYONE WHO HAS WRITTEN ON THIS SUBJECT. As I said, Hong Kong cannot blame it all on Chia. A good aspect of HongKong is its subway system to move people. It is very clean and well thought out. And it has English directions and vocal messages, not just Chinese. I know some Mandarin Chinese. But when some one speaks Cantonese, I cannot understand them.
Since Hong Kong has more of a capitalist economy, there is more hope for cleaner air. We certanly know that because the USA has more of a capitalist economy, it is able to look at important enviromental issues like clean air. I think the reason is because capitlism helps a society get past struggling.
Yesterday it was hard to breath. So take into consideration in reading my notes.
When I lived in Beijing I ran outside the first few days and was told not to anymore. Some American friends got sick and went to the hospital because they kept running outside.
Take care, paul
Published: December 12, 2008 6:58 PM