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Free-Market Environmentalism? It'll Never Fly, Orville!
Free-Market Environmentalism? It'll Never Fly, Orville!
April 09, 2012
Originally published in Forbes
The week before Easter I gave a brief speech at the Association for Private Enterprise Education, a foundation dedicated to assembling scholars, professors and students devoted to defending and extending the bounds of free enterprise. On the way back to D.C. I picked up the Hemispheres magazine in the seat pocket of United Airlines flight 360.
With APEE on my mind, the feature article “Plan G” (as in “Green”), on how technologies might contribute to a cleaner environment, caught my attention.
Much has been written over the role of increased wealth in advancing environmental health: think sanitation, reduced waste, streamlined manure-free transportation; even the green-ness of cities compared to their reputation.
Still, the presumption remains that free market capitalism pollutes and destroys; that “sustainable development” is something other than what markets can do of their own accord.
A problem with this impression is that most areas where environmental destruction is rampant are those where property rights are absent or confused, and a “tragedy of the commons” prevails: Airsheds, watersheds, public lands, endangered species come to mind.
I’m among those who contend that markets are inherently pro-environment, that any framework rejecting them is not something that can call itself environmentalism.
The problem, if you will, isn’t capitalism, but its absence. You can’t pollute what’s owned without having to compensate in rights-based free markets, one of many notions in references like Ecology, Liberty and Property (which was compiled by my former colleague and now Case Western law professor Jonathan H. Adler).
Fred L. Smith Jr., the president of the Competitive Enterprise Institute, writing about “The Progressive Era’s Derailment of Classical Liberal Evolution,” noted that a consequence of the Progressive Era’s exaltation of “planned order” was the removal of vast areas of endeavor, like the environment, from true discipline — from the wealth enhancing “fencing” capability of emergent voluntary enterprise. The process of civilization itself is partly defined by the unleashing of and cultivation of such protective institutions. They’re not automatic or knowable in advance.
I can’t say it better than Fred:
Classical liberals do not see the market as failing; rather, they see inadequate resources making it difficult for individuals to express their preferences. That tension creates the opportunity for institutional entrepreneurs to advance reforms that might better allow those preferences to be expressed. In the classical-liberal view, we are not charged with protecting the environment or anything else. There is no social utility function. Rather, individuals gain the right to own newly valued resources and to determine individually what sacrifices—what tradeoffs—they find worthwhile to protect those resources.
A healthy environment is itself a form of wealth–that which capitalism likes to maximize. In “mundane” industrial production processes themselves, markets direct human intelligence into reducing waste streams to generate profit; if A doesn’t, competitor B will.
But more broadly, our ongoing–truly neverending–challenge is to bring environmental amenities into that wealth-enhancing ambit rather than cave in to the default approach: locking them up into constraining, depleting commons, or relegating them to the status of hyper-regulated “public goods.” A wonderful book partly featuring some of the clash between the private conservation vs. commons/planned approach is John McPhee’s Encounters with the Archdruid.
Certain east coast natural wonders are often highlighted by a leading founder of “Free Market Environmentalism,” my colleague Robert J. Smith who headed the Center for Private Conservation. Natural Bridge in Virginia? It’s not managed by the Interior Department, it’s owned privately. Thomas Jefferson once owned it. The Shanandoah Valley’s Luray Caverns have remained privately owned since discovery. North Carolina’s Grandfather Mountain is held by a private stewardship foundation, while the state owns surrounding acreage. That state’s beautiful Chimney Rock was privately owned for 100 years before the state took over in 2007.
R.J. was CEI‘s 2011 Julian Simon Award winner, and he happens to turn 75 this week. Happy birthday R.J.!.
Too often, projects become grandiose, taking on too much of the character of national public works, rather than being guided by market imperatives to cut waste from input-output processes, to do more with less energy to make more profit. The natural energy efficiency of fossil fuel gets no respect at all; I needn’t mention Solyndra and compulsory green energy projects that do get that respect instead.
Starting on a normal human scale is sometimes helpful. As for electric vehicles, electric motorcycles are kind of exciting but still have problems, as this new Wired article indicates; no major manufacturers have entered the industry.
Yet these same absent manufacturers arguably put the cart before the horse with electric automobiles, fueled more by subsidy than by markets. I say this without chauvanism as the driver of a Honda Civic hybrid, a first-year 2003 early adopter, no less. Pure plug-in electric vehicles are and will be powered by coal, but rarely does anyone say so.
Other items in the Hemispheres article were interesting, although their true merits as genuine breakthroughs are yet to be seen (for example, converting the kinetic energy of footfalls on sidewalks into energy for lighting may be a bit too try-hard).
While we’re a long way from establishing needed oceanic property rights, Hemispheres pointed to the simplicity of weaker hooks to save giant bluefin tuna now snagged on hooks meant for lighter fare; As for fragile coral, the artificial seeding of more durable corals complementary to natural ones may work. Artificial reefs have important roles to play.
The Endangered Species Act is destructive, denying landowner rights and gutting incentives to protect. While the importance of harnessing property rights to protect our few remaining giants like elephants cannot be ignored, Hemispheres ponders enlisting social networks to track animals.
Not every idea will fly like Hemispheres, but one takeaway is we don’t always have to resort to Interior Department or Environmental Protection Agency edicts. In certain key respects, true environmental protection will always fundamentally elude planners, and will require free market environmentalism and private conservation approaches.