All Commentary
Saturday, September 1, 1990

Book Review: Economics and the Environment: A Reconciliation edited by Walter Block

The Fraser Institute, 626 Bute Street, Vancouver, British Columbia, Canada V6E 3M1 • 1990 • 351 pages • $19.95 paper

Is the face of Marx turning from red to green? Strategically the global movement—one might almost say global steamroller—for environmentalism could be a way for socialism or central planning to preserve and perhaps even to expand the intellectual battle lost in the collapse of Communism in Eastern Europe.

This thought arises in a reading of current events, with America’s $21 billion Clean Air Act of 1990 mirroring the costly White House-Congressional politics of environmentalism; with Cornell astrophysicist Carl Sagan barnstorming the country decrying “global warming”; with frenzied Green Parties springing up from Europe to Asia to Africa to North and South America, as cases in point.

It also arises in a reading of the revealing Fraser Institute production of a valuable work that says to the reader: “Hey! Wait a minute. Slow down. Reflect. Tailpipe emissions, for one thing, are cleaner by 96 percent since 1969. So no need whatsoever to throw out free enterprise with the acid-rain bath water.”

The key, then, to this work lies in its subtitle, A Reconciliation. Fraser senior research fellow and editor Walter Block holds in his tone-setting contribution that ecology is really a branch of economics, even if he is willing to concede that economics just may be a branch of ecology.

The foundation of each is, or ought to be, private property rights. He accordingly says that ecological and economic costs are inseparable—two sides of the same coin. The two are intellectually indistinguishable insofar as our relations with nature are involved—but only if all costs are fully taken into account.

Maintains Block: The free enterprise system is based precisely on this cost-recouping premise, with no trespasses, poaching, or other violations of private property rights taking place. Free markets and not politicized bureaucrats should therefore call the environmental shots. Capitalism itself, in other words, has a cleansing action. He writes: “Which fuels are most ecologically friendly? Without a free market that generates prices reflective of relative scarcities and a private property rights system that forces all costs to be counted, we cannot rationally decide which courses of action are most economically or ecologically sound.”

In a cute aside, Block notes the furor over cloth versus disposable plastic diapers. Yes, he observes, in purely economic terms, when the parent’s time (the largest cost element in the decision) is taken into account, there is no contest. Disposables win hands down. But some environmentalists object vociferously. They contend: Plastic diapers are neither biodegradable nor recyclable, as are cloth diapers.

Block concedes that cloth diapers are recy-clable, but rebuts that washing them implies soap for cleaning and bleach for disinfecting, which pose environmental threats of their own. Too, electricity is necessary for washing, drying, and ironing, which in turn requires oil, gas, hydro, coal, or nuclear power—or more ecological problems. In addition, there is the problem of disposing of the resultant dirty water with its human wastes. So, he argues, the price system with its business of trade-offs comes up with viable answers.

Naturally enough, Block finds strong support among his contributors. Montana State University economist Richard Stroup, for example, holds that risks from hazardous wastes are minimized through what he calls “3-D” property rights.

These are rights that are defined clearly, so as to reside with a particular person or private entity; defended readily against non-owners who might wish to use a property without permission or not pay a rent to the owner, or who might otherwise appropriate the rights of private property; and divestible, or transferable, by the owner to others on whatever terms are mutually satisfactory to buyer and seller or donor and donee.

But three-dimensional property rights in no way diminish the stewardship and conservation called for by sound ecology. Quite the contrary, the “tragedy of the commons” is precisely avoided through private ownership. Incentive-moti-vated Weyerhaeuser and International Paper, to cite two examples, are not going to “rape” their own private forests but rather conserve them in perpetuity for future generations, à la Adam Smith’s Invisible Hand, through scientific tree-farming.

Nor is a private property rights system a one-way stream of benefits, Professor Stroup reminds us. Private property owners can miscalculate, they can incur unforeseen exigencies, they can also be sued, i.e., they are vulnerable to liability as when their property such as a truck inflicts injury or damages on others. Or again if, say, a chemical plant discharges toxic wastes into a river or the atmosphere; and thereby infringes on the rights and Safety of others, the courts are duty-bound to grant injunctive relief to the plaintiff or plaintiffs.

This note on courts is vital to the argument of this book. Its contributors say over and over that free enterprise and sound ecology don’t exist in a legal limbo—supply and demand function under the rule of law. They say the environment is better protected by law than legislation—a subtle but important distinction—stressing the ecological role of case and ‘common law and of our third and much overlooked branch of government: the judiciary.

Dr. Peterson, an adjunct scholar at the Heritage Foundation, holds the Lundy Chair of Business Philosophy at Campbell University, Buies Creek, North Carolina.

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.