by CEI Staff
June 12, 2003

On Friday, May 30, 2003, Bill Moyers, host of NOW with Bill Moyers on PBS, hosted CEI President Fred L. Smith, Jr. for an in-depth interview on how liberty and limited government can protect the environment better than government-directed mandates.

Click here to watch the video of the interview.

Interview Tanscript:

We hear now from a champion of free enterprise and limited government. He doesn't think much of any regulations, especially those that affect the environment. I first met Fred Smith last year in Johannesburg, South Africa at the U.N. World Summit on Sustainable Development.

He's founder and president of the Competitive Enterprise Institute in Washington devoted to market-based alternatives across the board and litigation for property rights and economic liberty. Welcome to NOW. Good to see you again.

SMITH: Good to be here.

MOYERS: You should be feeling very good. Your side has won. I mean, the President… you have the ear of the President and every level of the government. Your arguments are being heard. Corporate executives, lawyers, lobbyists, as we saw in the first piece, are really throughout the government; they're running the show now. But you must be a very happy man.

SMITH: My expectations are much, much higher than that, Bill. I feel a little like the preacher who got people to recognize there is sin. But there's still an awful lot of it in Washington, D.C. We have taken... we've got a long way to go yet on government regulations; government expenditures are still dramatically out of scale. And the ability of the Republican administration and Congress to explain, to give a vision of what they're trying to achieve, still deserves a lot more work than it has today.

MOYERS: But you have the best hearing you've had in Washington.

SMITH: I have the best hearing we've had. And we certainly have more friends. In a way, Reagan was more ideological. But Bush has far more people in the team who listen and are attentive. So it's generally better, yes.

MOYERS: When Steve Forbes was running for President he said that if he was elected he would name you to be the last head of the Environmental Protection Agency (EPA).

SMITH: Thank God he didn't get elected President. I would not want that job, I'll tell you.

MOYERS: So what did he mean when he said the last head?

SMITH: What he meant, I think, is that the Environmental Protection Agency is the last dominant progressive era institution. It's one which has had absolutely no thought of alternative ways of advancing the protection of our planet, something we all agree with.

Unlike other parts of government that actually have some [regard for] private property and so forth, EPA's view is that environmental problems occur because of the market's failure. And therefore politics has to do it all.

MOYERS: Well, you and I have a difference on that because some of what the EPA does is designed to stop people from doing bad things. And people do bad things.

SMITH: They do bad things. But property rights—remember, we don't have to worry very much about our neighbor throwing his trash in our backyard or our neighbor doing bad things to our dogs and our cats and so on. Once people have ownership rights, once we link nature with mankind by the institutions that give us a real reason and an ability to protect things, we find that decentralization works quite well.

The tragedy is that we've left many of what we call environmental resources, wildlife, groundwater, fisheries, out in the cold. They're protected, if protected at all by political institutions, and political institutions are not always the best way to protect things we care about.

MOYERS: But neither are corporations. Corporations are run by people like political institutions are.

SMITH: But corporations are. But individuals own corporations. But individuals also own property. John Kenneth Galbraith once said, "Our homes and our yards are beautiful. Our streets and our parks are a mess." And then he went on to suggest nationalizing our homes and our yards. But the free market side says are there ways of making more of our planet someone's backyard, more of the wildlife someone's garden, someone's pet. So we can begin to link man and nature.

MOYERS: You were once an analyst at the Environmental Protection Agency…

SMITH: I was.

MOYERS: I've been told—I do not know if this is true; it may be apocryphal—that in the last few years there you actually tried to close the agency down?

SMITH: Well, I was too lowly for that. I became quite skeptical of the EPA. The EPA was going from the air and water programs to a solid waste program, to a garbage program. And they were eventually just taking the same legislation and just crossing out air and putting in solid waste. And I said, "This isn't going to work. America's too diverse, too non-homogeneous a place to have a cookie cutter approach to something as complicated as solid waste."

MOYERS: But do you honestly believe that dismantling the help in the environmental protections in this country would make us a better society?

SMITH: I don't want to dismantle them. I want to strengthen them. The argument… we have the better food system in America because we've never had the socialist food production system that the Soviet Union did. In America, we try to provide environmental quality the way the Soviet Union tried to provide food. It fed people but it fed them inadequately with a very disturbing diet.

MOYERS: But I agree with you about the food. But we also wouldn't have… we would have unsafe food if we didn't have government regulations. The meat industry and other sources, right?

SMITH: This is a progressive area of beliefs.

MOYERS: Here's where I come from. I've reported on the chemical industry's coverup of vinyl chloride. Keeping workers from knowing the dangers to which they've been exposed.

I mean, we all knew about the lead industry. Then the lead industry tried to silence the scientists who were warning about what lead was doing to children. Monsanto knew about PCB contamination in human bodies. Corporations will put profits above the community unless someone holds them accountable.

SMITH: And the way we do that is create the institutions, the meaningful liability rules, property right rules, that do not allow companies to dump their waste on the properties of others. That do not allow them to create harm to others.

But again I think there's a lack of faith in the decentralized institutions of our free society. Too often the media, companies, you know, groups, programs like your own, blow the whistle. Then rather than recognizing that the disclosure itself brings about the solution, you often, not always—I don't want to pre-judge—but you often say we need a law.

But often the law wouldn't have questioned the mistakes you did. It wasn't this entrepreneurial. It didn't have investigative journalists. Often, I think we don't understand that the strength of a free society is the blowing of the whistle, alerting people to something that was going on wrong, and then stop. We've solved the problem then.

MOYERS: But see, I think what you need is a watchdog. And I think that…

SMITH: And you are.

MOYERS: ...when there's no watchdog... But, no. I can report about the conflicts of interest in the Interior Eepartment. But I can't do anything about it.

SMITH: You do do something about it. You're pr…

MOYERS: Journalism's not enough.

SMITH: Television may not be enough, but…

MOYERS: I could report a burglar's breaking into your apartment or your house. But I can't go an arrest that…

SMITH: No, you can't.

MOYERS: …person. You need to the police to do that.

SMITH: No, but if you could point out that the police are failing to do that job and they could be… and there will be reform of the police department in that situation. I think you underestimate the value of letting people know.

America's a decent nation. We're very decent and action[-oriented] people. We're not a passive society. We let people know, shareholders know, that their companies are running the risk of downstream liability, that you let customers know that they may be in fact eating dangerous foods.

MOYERS: I think you've been living in Washington too long. You don't see the effects downstream of what happens when a mining company continues to strip the top off the mountains and let the water cascade down into the hollow.

SMITH: But that goes back to the progressive era. The progressive era we're thinking now is very sensitized to environmental values.

MOYERS: Yeah.

SMITH: But the early progressive era, we're talking 1890's, 1940's, was dam every river, channel every stream. Build…

MOYERS: Well, there's a balance. You have to…

SMITH: No, that wasn't a balance. We basically said: "Damn the torpedoes, full speed ahead with economic growth." And we ran over those individuals in the early part of the 20th century who cared about the environment. The market… property rights were protecting property. And those were overridden by progressive era views that economic growth was much more important than protecting Aunt Mary's view of the ecology.

MOYERS: Can we expect corporations to be our moral watchdog?

SMITH: No, I don't think we can. I think individuals are our moral watchdog. But I think corporations [should live] in a rule of law where they're held liable for not dumping their trash in other people's property.

MOYERS: You're from Louisiana?

SMITH: I'm from Louisiana.

MOYERS: Louisiana, right across the border from where I grew up. Louisiana has the worst air quality in America. And that's because, with all due respect, the corporations in Louisiana have bought off the government. And both corporations and political power serve the interest of profits, not the interests of citizens who want to breathe fresh air.

SMITH: But that to me makes my point, not your point. In Louisiana, we relied far too much on politics. Well, you know the line about Louisiana: "Our state does not tolerate corruption. It insists upon it." It's a state that essentially has done far too much to allow special interests to dictate all parts of its policy. Louisiana would be a much stronger state if it had stronger property rights.

MOYERS: You don't have a democracy where citizens are treated equally. You know that.

SMITH: We're both in favor of reform in Louisiana. You're not gonna get a fight with me on that.

MOYERS: You know I enjoy talking to you. But let me ask you this.

SMITH: Okay.

MOYERS: A question. How can we take you seriously when we know that the Competitive Enterprise Institute is funded by these corporations—by ExxonMobil, by chemical companies, by tobacco companies—by corporations that have an interest in getting you to say what you say?

SMITH: Because how do we take seriously National Public Radio or public television or newspapers? All of those are supported by advertisements that have economic interests in seeing that their messages get out.

We basically… corporations are part of our support, foundations and individuals [are] other parts. But we accept support from individuals who are willing to tolerate our independence, just like the National Public Radio is willing to accept support from groups who are willing to tolerate their editorial independence.

We dance with these people. We're not married with these people. And we've taken positions that have lost us corporate support and undoubtedly will in the future.

MOYERS: Why should we trust corporations to do the right thing for us as citizens? Their job is to make profits. Their job is to advance their interest. And the record is, that's what they're about. How can citizens trust corporations to look out for the commonwealth?

SMITH: They have to ensure that the institutions of law and legality discipline… we have competitive marketplaces. So companies that act in an errant way are disciplined by the market. We have to ensure that the rule of law requires them to respect the properties of others.

The way you create a moral world is to create institutions that discipline their moral behavior. You don't do it by assuming we're all going to be Mother Theresas. We're not.

MOYERS: But you don't think political institutions can do that too?

SMITH: I think political institutions, as you indicated earlier in the case of Louisiana, are far too corruptible. We've seen case after case…

MOYERS: Corporations are not, Fred?

SMITH: No, no. But corporations can't be disciplined…

MOYERS: Enron?

SMITH: …by politics.

MOYERS: Mining companies in West Virginia?

SMITH: Corporations can be disciplined by the competitive forces of other corporations and the rule of law. That works.

MOYERS: Didn't happen in West Virginia when the mining companies were… or strip mining was…

SMITH: Well, no competition there. West Virginia is a little like Louisiana.

MOYERS: Well, there's always an exception.

SMITH: Well, no…but...

MOYERS: West Virginia here, Louisiana there.

SMITH: …but in America we have a society where our corporations have acted vastly more responsibly than, for example, the economic institutions that are under total political control in the former Soviet Union. The world is a world of imperfections and frustrations. You ask whether I was happy about the Bush Administration? I won't be happy about a Reagan three Administration.

I want to see a world which is free; where property rights are expanded; and where the rule of law disciplines people, corporations, and individuals to respect other people's property rights.

MOYERS: Fred Smith, President of the Competitive Enterprise Institute, thank you for joining us on NOW.

SMITH: Thank you very much. I enjoyed it very very much.