Friday, April 22, 2011

Today Is Earth Day: What About a Capitalism Day?

From an Investor's Business Daily editorial on Earth Day in 2009, featured on Carpe Diem here (the IBD link no longer works):

"Of the estimated 1 billion people who will observe Earth Day worldwide this year, few will know about the progress that has been made. Fewer still will know how it was made. The media, uninterested in looking at the real story, will simply credit the environmental movement for the improvements.

Buried beneath all the badgering and fear-mongering about lavish Western lifestyles is a reality that the stuck-on-green left won't talk about and the average American isn't aware of: The world, especially in developed nations, is a cleaner — and greener — place than it was when the environmental movement began (the chart above shows the positive trends in air quality since 1980, data).

Topping the agenda of today's environmentalist groups is the pulling down of market economies, the raising up of central planning for egalitarian goals, forced lifestyle changes and the vilification — in hopes of the elimination — of signs of wealth.

None of these advance the planet's environmental health. But capitalism has. Through wealth generated by the free market, we have enough resources to move beyond the subsistence economies that damage the environment, enough disposable income to fund clean-up programs, enough wealth to scrub and polish industry.

Only in advanced economies can the technology needed to recycle hazardous waste or to replace dirty coal-fired power plants with cleaner gas or nuclear plants be developed. That technology cannot be produced in centrally planned economies where the profit motive is squelched and lives are marshalled by the state.

There's nothing wrong with setting aside a day to honor the Earth. In fairness, though, it should be complemented by Capitalism Day. It's important that the world be reminded of what has driven the environmental improvements since Earth Day began in 1970."

13 Comments:

At 4/22/2011 3:02 PM, Blogger VangelV said...

You need a better chart. Try one that begins in the 1930s and you will see an even larger decline.

 
At 4/22/2011 3:04 PM, Blogger Mark J. Perry said...

I couldn't find data before 1980, but if you provide the data source, I'll make a better chart.

 
At 4/22/2011 3:12 PM, Blogger Jack said...

So if the Clean Air Act initially passed in 1963, and was subsequently amended in 1970 and 1990, wouldn't this chart just show that the law has worked?

VangelV is right - we need a chart going back before 1963 to really assess the reasons for why air quality is better...

 
At 4/22/2011 3:50 PM, Blogger Evergreen Libertarian said...

Couldn't it be called Free Trade Day instead of Capitalism Day? As I recall there is a difference.

 
At 4/22/2011 4:07 PM, Blogger Benjamin said...

Well, I like the chart, but this is a bit rich.

Even Milton Friedman recognized that the price signal failed when it came to pollution. Friedman advocated pollution taxes, as do I.

The reason: In free markets he who excretes at lowest cost (to himself) wins.

Polluters, left free, seek to be reverse Obamas: They want to spread a cost of production--the pollution-- onto others, without compensation. Stick the pipe into the public's and neighbor's air, and farts away.

All hail free markets--but they do fail at times, for example in matters of national security and pollution.

Add in: I find everyone becomes a greenie-weenie when it comes to their neighborhood or family. Newport Beach is a very GOP-town here in Southern California. Lots of wealthy own homes there. And in NB, if you want to construct anything over 250k sf, you have to take it before the voters and get it approved. They make Santa Monica look like a bunch of entrepreneurs..

Kind of like drilling for oil off the coast of Palm Beach. Drill, baby, drill, but not in front of my manse in Florida.

 
At 4/22/2011 4:11 PM, Blogger VangelV said...

I couldn't find data before 1980, but if you provide the data source, I'll make a better chart.

I believe that I saw a trendline test applied to pollution data somewhere. I will take a look at my notes and will be happy to provide references if I can find them. From what I remember the outcome was quite similar to that of the deaths per million miles graph that Charles Murray provided in his book, What It Means to Be a Libertarian. The trend was in place well before government got into the act.

My problem is with a set of data that is aggregated into a whole where no such aggregation makes sense and where we have large discontinuities, where some of the pollutant comes from natural sources, and when you have no direct regulation of the specific pollutant.

Ross McKitrick had some interesting commentaries on this and had provided a database for students for his U of Guelph course but the link is buried somewhere in my notes and may no longer be active. When I get the time I will check. But I think that some of your brighter and more knowledgeable readers will probably find references that work.

I live in Canada where the Federal Government got into the regulation of pollution late in the game. Our data shows that many of the reductions took place when federal government regulations were quite lax.

http://www.ec.gc.ca/rnspa-naps/default.asp?lang=En&n=5C0D33CF-1

I believe that Lomborg also pointed out that if one looked at the particulate data for London one would find that the air quality has been improving for centuries and that the 1990s were cleaner than any time in the previous 400 years or so. (If memory serves me right, you will find that in the book, The Skeptical Environmentalist.)

The bottom line is that we did not need federal mandates to reduce pollution. Even under the common law system that was still dominant in the 19th century and where there were no laws to govern pollution individuals, companies, and courts worked well together to reduce pollution levels and improve general outcomes. I think that your chart is misleading because it may argue the opposite; that without regulations no gains would be made. That could not be further from the truth.

 
At 4/22/2011 5:06 PM, Blogger morganovich said...

the bottom line is that "environment" behaves like a luxury good.

poor societies pollute heavily. as they get wealthy and further away from subsistence level, they choose to forgo other goods for environment, but this never happens before a certain level of wealth.

 
At 4/22/2011 5:26 PM, Blogger JG said...

It's not just air.

Remember that the richer we get the less of the physical world we consume.

Save the Earth, grow the economy faster!

 
At 4/22/2011 11:27 PM, Blogger MaggotAtBroad&Wall said...

The late George Carlin's views about Earth Day (profanity warning):

http://www.youtube.com/watch?v=eScDfYzMEEw

 
At 4/23/2011 12:49 PM, Blogger Ron H. said...

1. "Even Milton Friedman recognized that the price signal failed when it came to pollution. Friedman advocated pollution taxes, as do I.

2. The reason: In free markets he who excretes at lowest cost (to himself) wins.

3. Polluters, left free, seek to be reverse Obamas: They want to spread a cost of production--the pollution-- onto others, without compensation. Stick the pipe into the public's and neighbor's air, and farts away.

4. All hail free markets--but they do fail at times, for example in matters of national security and pollution.


How is it possible to get so much wrong in such a short space? In this case, you are 4 for 4.

1. You have never advocated pollution taxes, you have only ever said that you agree with MF.

2. While true as written, those who are damaged can make it quite expensive to pollute.

3. But they are not left free. See #2 above.

4. We have already covered pollution: What free market in national security are you familiar with?

 
At 4/23/2011 1:17 PM, Blogger Benjamin said...

Ron H.

I have advocated pollution taxes since the 1970s, when I first began studying economics. You seem to be be saying that free market has costs for polluters--you are confusing a free market with a regulated market, or a market in which the damaged can see legal recourse through state-administered courts.

I don't know how I could seek recourse for the L.A. smog of the 1960s and 70 btw.

The SoCal ocean is so polluted yet we cannot eat some species of fish caught off the shoreline. One company, since defunct and bankrupt, was responsible for much of the pollution that renders the white croaker inedible. How to seek recourse from a corporation out of business? You are aware of corporate shield laws?

As for national security, in a free market, it was possible for Toshiba to sell very sophisticated equipment used on Russian subs (this back in the late 70s or 80s).

Happily, the Russians decided to demobilize, and derived incredible benefits for themselves ever since.

But had the Russians been determined foes, having Toshiba equipment on their subs might have turned the tide in a conflict in their favor.

Ergo, free trade when there are bona fide national security threats (the Russians) does not always make sense.

Today, we have no military threats to our nation. We may wish to regulate trade in nuke bombs, and a few other items.

Really, Ron H., at times I think you are being disagreeable for disagreeable's sake, and do not have a firm grasp of the facts or even your arguments.

 
At 4/24/2011 2:39 AM, Blogger Ron H. said...

"You seem to be be saying that free market has costs for polluters..."

Yes. Well, not exactly the market itself, but the courts can impose costs.

""...you are confusing a free market with a regulated market..."

No.

"...or a market in which the damaged can see legal recourse through state-administered courts."

Yes. That's is one of the few legitimate functions of government.


"I don't know how I could seek recourse for the L.A. smog of the 1960s and 70 btw."

You can't. It's too late. but, had you been able to prove that you were damaged, at the time, you might have had a good case.

"The SoCal ocean is so polluted yet we cannot eat some species of fish caught off the shoreline."

This is a problem with commons. Your precious croakers will eventually be OK to eat, as no PCBs are currently entering the environment, and those already in the ocean are, for the most part lying on the bottom, where they will stay if undisturbed. You should be more concerned with raw sewage from Mexico.

"One company, since defunct and bankrupt, was responsible for much of the pollution that renders the white croaker inedible. How to seek recourse from a corporation out of business?

You can't. But, the source of the pollution is gone, right. This might have been the recourse you would have sought in any case.

"You are aware of corporate shield laws?"

Yes. More government interference with the market and protection from accountability. If you are dumb enough to let polluters off the hook, then you can't complain about them producing pollution.

"As for national security, in a free market, it was possible for Toshiba to sell very sophisticated equipment used on Russian subs (this back in the late 70s or 80s)."

That's not a market failure, but a free market in action. Your disaproval of the customer is not a market issue.

"Happily, the Russians decided to demobilize.."

I'll bet Toshiba, having lost a good customer, doesn't use the word "happily" in their version of the story.

"But had the Russians been determined foes, having Toshiba equipment on their subs might have turned the tide in a conflict in their favor."

Perhaps, didn't US subs use Toshiba equipment, or wasn't there anything comparable available from someone else?

When you complained that markets failed in matters of national security, I assumed you meant that markets could not properly supply national security. You own example shows just the opposite to be the case.

"Really, Ron H., at times I think you are being disagreeable for disagreeable's sake, and do not have a firm grasp of the facts or even your arguments."

I get grumpy when I read your nonsensical comments, of which you appear to have only four, and which you keep repeating over and over, in such large numbers.

 
At 4/24/2011 6:04 PM, Blogger juandos said...

How does the pseudo benny do it?

Time and again its been pointed out to him that his supposed Milton Friedman comments are something he made up or read on some blog of one his fellow travelers...

Reality must truly be a foreign experience for the pseudo benny...

 

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