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View Full Version : Economics Socialized Pollution vs. the Free Market


Taco John
12-02-2009, 10:07 PM
Some people falsely believe that advocates of the free market must be opponents of the environment. We care only about economic efficiency, the argument goes, and have no regard for the consequences of pollution and other examples of environmental degradation. But a true supporter of private property and personal responsibility cannot be indifferent to environmental damage, and should view it as a form of unjustified aggression that must be punished or enjoined, or dealt with in some other way that is mutually satisfactory to all parties. Private business should not have the right to socialize its costs by burdening other people with the by-products of its operations.

Economist Martin Anderson puts it this way. Dumping garbage on your neighbor's lawn is wrong. But pollution is really just another form of garbage. For that reason, proposals to charge pollution fees, which get higher the greater the pollution, neglect the demands of justice. Anderson compares it to taxing thieves as a way of giving them an economic incentive not to burglarize your home. If the practice is wrong, the law should treat it as such. "if a firm creates pollution without first entering into an agreement, or if the parties cannot come to an agreement fixing the cost and degree of pollution, then the court system could be used to assess damages," say economists Walter Block and Robert W. McGee.

In fact, that's how American law used to treat pollution. But a series of nineteenth-century nuisance cases changed that: the courts suddenly decided that a certain level of pollution could be allowed for the sake of the greater good. The implications was that if, for example, a few farmers had their property destroyed by passing trains, that was just the price of progress. (Easy for them to say!) These cases allowed private industry to invade the property rights of other and deprived those others of legal recourse. I do not see this as a free-market outcome. (I do not claim that pollution consisting of a few undetectable particles must be prohibited, or that no airplanes would have the right to travel high above people's homes. These are legitimate matters for the courts, where such matters have been properly decided in the past.)

Imagine if the previous legal approach to pollution had not been overturned, and polluters continued to be legally liable for any such invasive practices. Block and McGee suggest that we would long ago have "begun enjoying a non-pollution-intensive technology where there were no open-ended smokestacks. Instead, these pipes would have led back to chemical cisterns, the latter to capture otherwise errant soot particles." This approach would also have encouraged the growth of an environmental forensics industry that would allow us to identify those responsible for pollution by determining its exact source, just as DNA evidence now permits us to identify rapists and murderers.

Ron Paul's "The Revolution: A Manifesto"
Pages 105-106

Taco John
12-03-2009, 09:29 AM
bump

Reaper16
12-03-2009, 10:13 AM
Thanks for the legitimately interesting thread. Does Ron Paul not support socialized byways of transportation?

Mr. Kotter
12-03-2009, 11:06 AM
Eminent domain...can be a bitch, to be sure; but it's right there in the 5th amendment.

Taco John
12-03-2009, 12:39 PM
Thanks for the legitimately interesting thread. Does Ron Paul not support socialized byways of transportation?


I haven't actually ever heard Ron Paul speak on transportation, but I find it hard to believe that he believes people in Idaho should be charged for the highway that stretchest between Florida and New York. If such highways are economically viable, the states in which they stretch should be able to support them.

Taco John
12-03-2009, 02:06 PM
Apparently people are only interested in the pollution topic when it directly correlates with demonizing free marketers and empowering big government.

Direckshun
12-03-2009, 03:17 PM
I have two responses to this particular passage:

1. You can't change what's happened in the past, so there's really nothing we can do about the fact that past government policy has allowed a climatic threat to be thrusted upon us.

2. Allowing businesses to be legally liable only goes so far, and I don't know if it would have prevented the threat climate change that we see today. How would you hold a few polluters legally liable for an event that could overtake coasts globally and destroy two ecosystems at the north and south pole?

Taco John
12-03-2009, 03:18 PM
You know what I think it is. I think it's that nobody finds anything to disagree with here.

It turns out that when you stop to really give Ron Paul's views a chance, you find out that they really make a lot of sense - and are clear and coherent and most importantly consistent. So while blaster hits for "being dogmatic" the truth is, we're being consistent, applying the same rules across all spheres - not just the ones who have the most resources to lobby government.

Maybe it's time to take another look at Ron Paul.

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Direckshun
12-03-2009, 03:21 PM
You know what I think it is. I think it's that nobody finds anything to disagree with here.

Is it really that irresistable for you to taunt people into replying to you?

I swear to god, the MO's wearing thin. Grow up.

Taco John
12-03-2009, 03:40 PM
I have two responses to this particular passage:

1. You can't change what's happened in the past, so there's really nothing we can do about the fact that past government policy has allowed a climatic threat to be thrusted upon us.


2. Allowing businesses to be legally liable only goes so far, and I don't know if it would have prevented the threat climate change that we see today. How would you hold a few polluters legally liable for an event that could overtake coasts globally and destroy two ecosystems at the north and south pole?


I take it then that you support cap and trade?

Baby Lee
12-03-2009, 03:43 PM
Ronald Coase explained long ago why, if respective rights are are well defined and the transactions costs of enforcing and transferring them are not too great, it doesn't matter.

It's not about 'allowing pollution for the greater good' it's about transparently bartering between the right to pollute and the right to avoid pollution.

And the 'train case' wasn't about 'pollution' but about the fact that the locomotives gave off embers in their operations that, if they reached a dry field, could burn the crop. And the approach was to get the parties to come to an optimum solution regarding whether railcarriers had to install ember catching devices on their entire fleet to guard against this slim possibility or if the farmers would be expected to bear this possibility, negotiations ranged from who paid for the catchers [or jointly, in what proportions], or if the farmers should insure against this and who would bear THAT cost.

A little light reading

http://www.sfu.ca/~allen/CoaseJLE1960.pdf

http://www.daviddfriedman.com/Academic/Coase_World.html

Direckshun
12-03-2009, 03:45 PM
I take it then that you support cap and trade?

Well like many things, the devil's in the details. I agree with the broad outlines of it, though.

Taco John
12-03-2009, 03:52 PM
Well like many things, the devil's in the details. I agree with the broad outlines of it, though.

Ok. I want to understand the broad outline that you are referencing.

Am I correct that you believe that industry should be allowed to pollute so long as they are playing within the boundaries of the system set up by the government (ie. acceptable levels as dictated by the processes and systems that the government has set).

I think that's broad enough.

Help me out here.

dirk digler
12-03-2009, 03:53 PM
I know I am slow and kind of dumb but isn't this basically letting the court system decide these cases? Don't we do this already?

fan4ever
12-03-2009, 03:55 PM
I take it then that you support cap and trade?

Oh, dude. From what he posted the other day, there isn't much of the liberal wish list he hasn't swallowed whole.

Taco John
12-03-2009, 04:01 PM
Ronald Coase explained long ago why, if respective rights are are well defined and the transactions costs of enforcing and transferring them are not too great, it doesn't matter.

It's not about 'allowing pollution for the greater good' it's about transparently bartering between the right to pollute and the right to avoid pollution.

And the 'train case' wasn't about 'pollution' but about the fact that the locomotives gave off embers in their operations that, if they reached a dry field, could burn the crop. And the approach was to get the parties to come to an optimum solution regarding whether railcarriers had to install ember catching devices on their entire fleet to guard against this slim possibility or if the farmers would be expected to bear this possibility, negotiations ranged from who paid for the catchers [or jointly, in what proportions], or if the farmers should insure against this and who would bear THAT cost.

That's very interesting. Thanks! I haven't had any exposure to Coase, but I'm definitely interested in digging in. Thanks for the lead.

So if I'm not mistaken here, they removed responsibility from the locomotive companies for the property they damaged, and placed it on the farmer, who was expected to join a program in which such costs could be socialized across an entire class. Is this a fair statement?

I'm all for insurance. I think private insurance is a great example of socialism - but only when it's not a racket that is FORCED onto people. And that's the danger of insurance. Eventually, people have expectations that EVERYBODY should be in favor of socializing losses, and before you know it, government and insurance are married at the hip.

Taco John
12-03-2009, 04:04 PM
Baby Lee, from your point of view as a lawyer, how would you state the precedent that was set by that case?

Direckshun
12-03-2009, 04:07 PM
Ok. I want to understand the broad outline that you are referencing.

Am I correct that you believe that industry should be allowed to pollute so long as they are playing within the boundaries of the system set up by the government (ie. acceptable levels as dictated by the processes and systems that the government has set).

I think that's broad enough.

Help me out here.

Sounds almost exactly like what I'm talking about.

Direckshun
12-03-2009, 04:08 PM
Oh, dude. From what he posted the other day, there isn't much of the liberal wish list he hasn't swallowed whole.

TJ actually doesn't think non-classical liberalism exists. He'll tell you I'm a socialist.

fan4ever
12-03-2009, 04:14 PM
TJ actually doesn't think non-classical liberalism exists. He'll tell you I'm a socialist.

OK, hence the question. Cap and trade isn't necessarily socialist; just scary.

Taco John
12-03-2009, 04:25 PM
TJ actually doesn't think non-classical liberalism exists. He'll tell you I'm a socialist.


non-classical liberalism constitutes what exactly?

Direckshun
12-03-2009, 04:25 PM
Cap and trade isn't necessarily socialist

PREPARE FOR AN INTENSE REBUTTAL

Taco John
12-03-2009, 04:26 PM
Sounds almost exactly like what I'm talking about.


So it's a fair statement of your position?

Taco John
12-03-2009, 04:38 PM
OK, hence the question. Cap and trade isn't necessarily socialist; just scary.


Oh, it's definitely socialist. And for that matter fascistic. You've heard of wealth re-distribution. This is essentially pollution re-distribution. It's a zany scheme that essentially enshrines industry with the right to pollute.

Direckshun
12-03-2009, 04:39 PM
So it's a fair statement of your position?

Yes.

Taco John
12-03-2009, 04:40 PM
May the best lobby win!

Direckshun
12-03-2009, 04:51 PM
May the best lobby win!

I, uh... okay?

Taco John
12-03-2009, 04:58 PM
You, uh, okay, uh, don't really follow the cause and effect scenario that you set uh, up.

fan4ever
12-03-2009, 05:10 PM
Oh, it's definitely socialist. And for that matter fascistic. You've heard of wealth re-distribution. This is essentially pollution re-distribution. It's a zany scheme that essentially enshrines industry with the right to pollute.

True; only part of what's scary about it is that it will be a form of international welfare.

Baby Lee
12-03-2009, 05:22 PM
Careful not to conflate "wealth redistribution" with imposing costs for damage done or resources consumed. In essence Coase is making a free market argument (which makes TJ's argument a headscratcher). Read up on Coase versus Pigou (tax undesirable actions).

Taco John
12-03-2009, 05:58 PM
Careful not to conflate "wealth redistribution" with imposing costs for damage done or resources consumed. In essence Coase is making a free market argument (which makes TJ's argument a headscratcher). Read up on Coase versus Pigou (tax undesirable actions).


I think the proposal in itself makes that conflation, not myself. Are they not redistributing the impact of this damage by trading cash or credit with eachother for the right to pollute?

So presumably, I can operate a highly polluting operation in Portland, so long as I have credits that I've traded with Idaho, Nevada, and Colorado to cover my "costs" above the "acceptable" limit.

Seems pretty silly to me.

I can't understand why anyone would be in favor of the right to pollute here, so long as they're not polluting so much over there.