Wednesday, December 1, 2010

Capitalism: The Actual Pollution Solution

The Center for Public Integrity reports that "the Obama administration has doled out billions of dollars in stimulus money to some of the nation’s biggest polluters and granted them sweeping exemptions from the most basic form of environmental oversight."  Their website reports:
The administration has awarded more than 179,000 “categorical exclusions” to stimulus projects funded by federal agencies, freeing those projects from review under the National Environmental Policy Act, or NEPA. Coal-burning utilities like Westar Energy and Duke Energy, chemical manufacturer DuPont, and ethanol maker Didion Milling are among the firms with histories of serious environmental violations that have won blanket NEPA exemptions.
The typical modern intellectual reaction to a report of this kind is that it represents a prime example of how capitalism results in environmental disaster as greedy businessmen callously pollute the atmosphere in search of profit.  Furthermore, the common wisdom goes, the solution to such wanton disregard for man's environment is to reign in these evil polluters by force, i.e., subject these businesses to a litany of preventative government regulations in addition to publicly admonishing Americans to turn away from industrial technology and return to a more natural, organic lifestyle, i.e., make do with less.

But, is this the right way to interpret such a report?

First, let's assume that we are dealing with actual environmental problems, i.e., environmental conditions or factors which actually pose a potential threat to human beings. In other words, the more philosophical question related to nature's so-called "intrinsic value" - a concept which I have previously analyzed and rejected - will not be considered here.  Second, to rationally consider this report, it is critical to define what exactly is meant by capitalism. Ayn Rand properly defined capitalism by means of essentials: "Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned." 

Why is this important? 

If all property is privately owned, it would mean that land, rivers, and even the air would be privately owned and violators of property owner's rights would be subject to tort or liability law, or even criminal law depending on the circumstances. For example, your neighbor cannot legally dump garbage on your lawn. Or, for example, say your neighbor was experimenting with dangerous chemicals in his garage, and the fumes injured you. Under a system of private property, you would certainly have legal grounds to prevent him from injuring you either through the threat of lawsuit or criminal prosecution if his actions were deliberate.  Such a system is predicated on the recognition of individual rights, particularly property rights.  Morally, such a system recognizes that each individual has a right to exist for his own sake, pursuing his own values free from coercion by the state or other individuals.

In other words, a true capitalist system, a system in which all property is privately owned is the most just and the most efficient way to prevent and control actual environmental disasters, since claims related to violations of property owners' rights can be adjudicated in courts of law under objective standards of evidence.

On the other hand, socialism is a system in which individual rights and private property are not respected.  Consequently, the government retains a monopoly on the disposal and use of property of all kinds.  Under such a system, if the rulers decide that environmental concerns, such as breathable air, are not important to the rulers' goals, then individuals have no recourse under such a regime.  Clearly, the horrendous pollution evident in communist China and in Eastern Europe under the old Soviet regime were primary examples of this principle. 

Now, I do not know anything about the particular regulations referenced in the report in question.  In fact, I assume that many of these regulations are an unnecessary and non-objective approach to dealing with actual environmental problems. Consequently, I do not know if the regulations for which exemptions were granted would result in unnecessary costs to the businesses in question, nor do I know if the exemptions will result in the release of intolerable amounts of dangerous pollutants.  But, that is exactly the point!  To the extent that property rights are not defined, and to the extent that the state determines the scientific parameters related to environmental factors, individuals are at the mercy of government bureaucrats who may or may not be motivated by short term political concerns, bribes, or some other whim.

If one is truly concerned about protecting his own property and person from violations in this regard, there is no worse possible course of action than ceding property rights to the state or relying on government agencies to regulate these matters.  Only a capitalist system where all property is privately owned can result in actual objective solutions to problems of this kind.

Additionally, this case is a prime example of the importance of definitions by essentials - an idea I posted about in detail previously.  In that post, To Know Capitalism is to Love Capitalism, I wrote that "the meaning of capitalism has become completely blurred by modern academics who do not think in principles or essentials." For example, the most routine non-essential definition of capitalism is that capitalism is "anything America does or has done" followed by "capitalism is anything in which it seems like businessmen are granted some government benefit at the expense of someone else."  I wrote:

In all of these instances, the concept of capitalism is implicitly being defined in terms of non-essentials. Such definitions blur the essential distinguishing characteristics of capitalism and have the effect of packaging the concept of capitalism together with concepts that represent its antithesis. In these cases, because capitalism is defined improperly, it is literally regarded as its opposite and held accountable for the deleterious effects of its opposite. Therefore, before arguing over capitalism versus socialism one should understand and clarify what exactly capitalism is.
Rand's definition of capitalism recognizes the fundamental distinguishing characteristic of capitalism, namely, the recognition of individual rights and private ownership of all property. Any system in which vast swaths of land and property are owned and maintained by the government, either de facto or de jure, or where one party is granted special government favors at the expense of another, cannot be regarded as a fully capitalist system and therefore, the disasters that logically follow should not be laid at capitalism's doorstep. The first step in advancing the cause of individual rights and human happiness, i.e., the promotion of capitalism, is to understand exactly what it is - and is not.   


Michael said...

perhaps its the reason why people are against capitalism. they don't know what it is and confuse it with other things.

garret seinen said...

The current system decrees that all citizen own the country communally and any profitable development must be 'shared'. The result is that a great number of people think there is no need to lead a productive life, just tax the hell out of those who are productive.

We can clearly see how well that's been working out.

cheers, gs

Morgan Polotan said...

Great article about how pollution would be dealt with in a true capitalist system. Property rights are the most effective and only moral way to deal with pollution.

Doug Reich said...

Thanks Morgan, I'm glad you found it useful.