Letting the Market Cure the Environment:

A Miniature Manifesto of how Economics Works Better than Bureaucracy

By: Lainie Frost, Political Philosophy Section Editor

“An Inconvenient Truth” has been out for a little more than a year now. During this time “going green” and other environmental-friendly slogans have permeated airwaves, pop culture, and even our nation’s political culture. It seems as though a plethora of politicians have jumped on the environmental bandwagon hoping to sway voters by being more hip to the green lifestyle. While I can admire these (mostly) white, middle-aged men’s attempts to sport the green lifestyle like a new pin-striped, sear-sucker suit, I also have to say that their beliefs on solving environmental crises don’t just stop at appearing green. In addition, politicians are trying to remedy such problems (and have in the past) by creating regulatory governmental policies. While some - like our friend Al Gore - argue that this is the only way to end global warming, acid rain, and pollution, I think it is highly irresponsibly and risky to base a remedy on politics and not economics.

New-Market Environmentalism for Dummies

Now I am not an economics major. Nor am I an economics minor. However, despite such a flaw, I do not have to aspire to have such a degree to appreciate and acknowledge a common-sense solution to a problem, which is so widely eager to be solved by many. Personally, I think Al Gore needs to get a memo titled Free-market environmentalism since this is really the most appropriate way to cure the global warming (and other environmental) crisis.

The way our nation currently solves environmental problems is by power hungry politicians who think that their legislation will solve all Al Gore’s worries. Free-market environmentalism conducts itself in just the opposite fashion. Instead of being ruled by government initiatives, free-market environmentalism is based on economic principles.

For some like myself who are not exactly math-friendly—thinking that the free market and the economy could be the earth’s ultimate savior is mind-boggling and almost contradictory. Bart Frazier, Program Director for the Future of Freedom Foundation acknowledged this dichotomy best when he said “Economics is not a field that is normally associated with the environmental movement, but the recognition of the importance of incentives has led to a schism in the movement — between those environmentalists who turn to the state to protect the environment and those who instead rely on private property and the free market to do so”.

Obviously many politicians align themselves with those who “turn to the state to protect the environment” because without additional regulation politicians would have little function. However, in their attempt to further their careers (and perhaps their self-image to a newly concerned, “green” audience) politicians fail to see how their regulation endeavors for ecological dilemmas often impede on personal rights. For example, policies used to govern pollution and similar matters are in actuality also violating the right to private property, which has been something Americans hold dear since our nation’s birth.

Possible Problems

An opposing viewpoint might inquire, “But how can we privatize rain, or air in order for free-market environmentalism to work?” Writer for The Concise Encyclopedia of Economics: Library of Economics and Liberty Richard Stroup admits that there are three characteristics must exist for this theory to work in regards to privatizing natural resources: For markets to work in the environmental field, as in any other, rights to each important resource must be clearly defined, easily defended against invasion, and divestible (transferable) by owners on terms agreeable to buyer and seller. Well-functioning markets, in short, require "3-D" property rights. When the first two are present—clear definition and easy defense of one's rights—no one is forced to accept pollution beyond the standard acceptable to the community. Each individual has a right against invasion of himself and his property, and the courts will defend that right. And when the third characteristic—divestibility—is present, each owner has an incentive to be a good steward: preservation of the owner's wealth (the value of his or her property) depends on good stewardship.

Another opposing perspective might point out that if we just let people do whatever they want with their property, then we would continue to have environmental problems because people may use their property in an earth-damaging way. However Frazier and other theorists argue that this trend would not occur because people understand that in order for their personal property to be sustainable, they must take care of what they have. Property-owners recognize that there is no future income or gain if they were to abuse the land they own. The Thoreau Institute (a free-market environmental group) gives a very applicable example as to why free-market environmentalism works:

Markets sometimes seem shortsighted because many investors focus on how much profit they can make in a short time. But markets also give investors an incentive to look at the long term. If they invest in a factory and then let the factory deteriorate, they won't get much for it if they decide to sell it.

With free-market environmentalism, saving the environment does not involve combating monolithic political powers deciding the fate of our precious earth. It also does not mean that whatever party’s whip is the most affective is the party whose environmental regulation wins. Free-market environmentalism means people, not Uncle Sam’s interminable bureaucratic tendencies, determine the future and dissipation of ecological problems.

In retrospect, perhaps I have been a bit hard on Al Gore. In the end, all Al Gore wanted to do was bring to the nation’s attention the hazardous state which our children are destined to inherit. I cannot help but conclude, though, that Mr. Gore’s documentary meant to play on the heartstrings of politicians so that they would do something to solve such predicaments. But that’s just the thing. Politicians have already attempted to do something for decades, and if they are not the people who know best when it comes to the environment then why are we still looking to more policies for ecological problem-solving?

Instead of being just another politician who wants to create just another regulatory legislation, which infringes upon personal rights, perhaps Gore should just take his own advice when he said “Free market capitalist economics is arguably the most powerful tool ever used by civilization. As the world's leading exemplar of free market economics, the US has a special obligation to discover effective ways of using the power of market forces to help save the environment.”