Property-Rights Enforcement Is the Solution to Pollution
MARCH 01, 2001 by SHELDON RICHMAN
Filed Under : Property Rights
Politicians use language differently from the rest of us. Take the expression “Big Polluters.” Big Oil produces oil. Big Pharmaceuticals produce medicines. I guess Big Polluters produce air and water pollution.
What’s more, they somehow make big profits doing so. How this works I’m not sure. Who would pay for pollution?
Obviously, there are no businesses that make profits by producing nothing but pollution. But that perverse fantasy serves a purpose. It is much easier for capitalism’s antagonists to denounce Big Polluters if they can make people believe those firms are an unmitigated evil. Allow for a moment that they produce something that people value and the politicians’ case is considerably weakened.
To live, man must produce. Production is the transformation of a combination of things (inputs) into something new (output). In the production process, waste byproducts inevitably result. There is nothing sinful in generating waste. On the contrary, since production makes life—an increasingly better life—possible, the production process is virtuous. (It’s a myth, of course, that waste is unique to industrial societies.)
There’s more to the story. Waste is not a fixed concept. What is a useless byproduct one day is a useful product the next. Entrepreneurs make extraordinary profits by finding value in what everyone else thinks is of little or no value.
As Jane Shaw and Michael Sanera note in their excellent book on the environment, Facts, Not Fear, industrial air pollution is largely unburned fuel. Fuel being costly, you might think that anyone who “puts profits before people” would hate burning money.
There’s an intrinsic problem with the anti-capitalists’ model of the businessman. If he is profit?hungry, he would not behave as he is accused of behaving. He would, for example, have no interest in using any more inputs than necessary to satisfy consumers. His profit is derived from minimizing inputs and maximizing the value of his output. That sounds like conservation, doesn’t it?
Of course, the idea of putting profits before people is absurd. Business people earn profits by thinking up ways to make people’s lives better. In the free market, people generally have a harmony of interests. “People before profits” is a vestige of Marx’s discredited philosophy of class warfare.
The upshot is that no factory is a mere polluter. If it didn’t produce things people valued, it would close. This is not to deny that some factories pollute. At a given time, it may not be possible or economical to use the waste byproducts going up the smokestack. In that case, harmful pollution is a trespass onto the property (including the lungs) of other people.
Thus the right way to address a pollution problem is to identify and enforce property rights. The wrong way is to give bureaucrats carte blanche to regulate business. Since they see only pollution and no value in production, they will surely throw out the baby with the bathwater.
* * *
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