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Free Market Environmentalism

In the decade or so preceding her death this past spring, the noted scientist and occasional politician, Dr. Dixy Lee Ray, earned a reputation as the nation's most insightful critic of modern environmentalism. In a letter written three years before her death, she summed up what she had learned, observing that environmentalism, “as we have come to know it in the waning years of the twentieth century,” is “anti-development, anti-progress, anti-technology, anti-business, anti-established institutions, and, above all, anti-capitalism.”

Many in the environmental movement would agree. A published report in the newsletter of the Earth First! environmentalist group, for example, says “industrialism [is] the main force behind the environmental crises.” One noted environmentalist, Stanford biologist Paul Ehrlich, says the world's environmental problems are caused by “too many rich people.”

Given the common currency of these notions regarding “environmentalism,” the title of Free Market Environmentalism will strike many as an oxymoron. But the authors, Terry L. Anderson, a professor of economics at Montana State University, and Donald R. Leal, a research associate at the Political Economy Research Center, intend no irony. Their purpose is to establish a new environmental paradigm, one based on free men making free choices. The authors recognize the difficulty they face. As they note, most environmentalists and government officials believe that “if markets are the problem ... government must be the solution.”

Leal and Anderson disagree, citing case after case in which government control of natural resources--the “environment,” in current usage--has resulted in greater degradation.

Consider, for one, our national farm policy. By subsidizing farmers, we have encouraged the cultivation of land that is unsuitable for farming, but which is perfectly suitable habitat for dozens of native species of game. The result: billions of taxpayer dollars spent subsidizing special interests and concurrent environmental devastation.

This example reveals the one basic flaw in the theory of governmental control of natural resources, to wit: political capital is more important to these agencies than taxpayer money. (An economist with a sense of irony would note that this is a consequence of the law of supply and demand. There is a perennial shortage of the former, and a surfeit of the latter.)

Free Market Environmentalism articulates an alternative “vision” by recognizing that man is essentially “self-interested”; this leads to the desire for greater profits. Inherent in the drive to greater profits is the efficient use of resources. This self-interest also leads to greater development and use of specialized knowledge. Monolithic government agencies can, at best, operate within one or two guidelines. But the creative power of millions is unleashed when markets are free. Finding a niche is the name of the game, and the greatest niche of all is reduced prices. And again it should be noted: reduced prices are largely the result of enhanced efficiency.

Free Market Environmentalism is not a libertarian diatribe, by the way. It posits a positive role for government, specifically by noting that government must be diligent in enforcing property rights. Indeed, to attack many of our environmental problems, property rights should be expanded. For example, automobile emissions could be reduced by privatizing congested highways. Here, simply put, is how free market environmentalism would be put to work on auto emissions:

First, the atmosphere would be regarded as having economic value, and would also be regarded as a publicly held asset. Emissions from automobiles would then reduce the value of this asset. If we privatized our highways, the owners of highways would be liable to the public for damages. In turn, this would force changes to maximize profits--cars with better pollution control equipment would receive lower tolls and those with no equipment might be banned altogether. Moreover, congestion could be reduced at peak pollution hours by having higher rush hour rates.

The primary contribution of Free Market Environmentalism is that it provides any number of these elegant, inexpensive and liberating ideas.

That's the good news. The bad news, of course, is that elegant, inexpensive and liberating ideas are anathema to environmentalists, and to government officials. But if the course of American environmentalism is to be changed--and for the sake of the environment and the economy it must be--then opposing ideas and alternative solutions must be clearly and forcefully articulated. Anderson and Leal have provided the text for this revolution.