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Tuesday, September 6, 2016 Leer en Español

The Environment’s True Friends Are Libertarians

Government wastes and destroys its own holdings, because it lacks the incentives of the true owner, insulated as it is from the attendant costs.

The libertarian movement should have been the natural home of environmentalism. Robust, well-defined property rights and mutually-beneficial exchange in a genuine free market create strong incentives for environmental stewardship, thwarting the kinds of environmental degradation that have been all too common under the status quo, defined by pervasive regulation, inept bureaucracy, and thus frequent disasters.

Government wastes and destroys its own holdings, because it lacks the incentives of the true owner, insulated as it is from the attendant costs.

As economist and public policy scholar Robert H. Nelson observed, “environmentalism and libertarianism have important common elements. Both outlooks are fearful of the uses to which human beings will put the enormous new powers made available by the modern products of science and economics.”

The philosophy of liberty furthermore emphasizes the importance of accountability, personal responsibility, and efficiency: values which should be focal points for any worthwhile project of environmental protection. Why, then, does prevailing opinion make private property and free market competition the enemies of nature, cast as the sources of widespread pollution, ecosystem destruction, and thoughtless resource depletion? Clearly something has been lost in translation, confused by the easy and largely incoherent narratives of left versus right.

Recasting the Debate

Libertarians are, no doubt, partially to blame for this. We have emphasized the primacy of economic development and market innovation, the processes that have enriched the world. But the fact that the selfsame processes have at the same time made the world cleaner and more sanitary is less frequently remarked upon, lost in the narrative that freedom means corporate license—which in turn spells doom for the natural world.

First, libertarians must challenge the oft-repeated myth that unhindered competition is a cutthroat game of wild and irresponsible misbehavior, the inevitable result of which is environmental destruction borne by the many, and large profits enjoyed by the few. Nothing could be further from the truth.

Government is itself the worst polluter, responsible for more serious environmental damage than any other single actor.

In fact, libertarians see well-defined private property rights and voluntary exchanges in the marketplace as the best mechanisms through which to protect the natural world and its resources. Seldom do the free market’s detractors—or indeed even its friends—observe its valuable restraining effects: the natural limits that property and exchange place on corporate power and license.

Sincere environmentalists should care about the track record of government intervention and regulation. The worst, most tragic environmental disasters have uniformly been spawned from heavily-regulated and cartelized industries, occurring in spheres of human activity in which property rights are not well defined or are vested in derelict government bureaucracies.

And we should be especially indisposed to give credence to government’s lofty environmental protection rhetoric given that government is itself the worst polluter, responsible for more serious environmental damage than any other single actor. That this fact will surprise so many demonstrates the success with which the federal leviathan has deceived and cheated the American people.

Property Means Preservation

The pollution problem is fundamentally a property rights problem. Consider it: history’s greatest environmental disasters are defined by the fact that their perpetrators violated others’ property rights without full and proper recompense. The offenders unfairly and coercively impose their costs, those associated with the operations of their businesses.

As a property owner itself, government has been notoriously irresponsible.

There is, then, an important, if underappreciated, sense in which definite private property rights beneficially constrain participants in a free market economy; such rights compel consumers, producers, entrepreneurs, and investors to internalize their own costs, to forgo a subtle form of theft—causing damage without indemnifying the injured party.

We face the problem of how best to prevent this. The solutions of free-market environmentalism address the associated incentive problems realistically and straightforwardly, rather than naively believing government to be a deus ex machina.

Consider the incentive paradigm under which government operates. As a regulator, government most often hears from and interacts with the powerful global companies that are subject to agencies’ rules. Mobilized and well-positioned to impact policy making, industry pressure groups are able to influence the rule-making process much more directly than the dispersed general public, which lacks both the necessary knowledge and resources.

Moreover, as a property owner itself, government has been notoriously irresponsible: derelict in its duties as the country’s largest environmental steward and principal landowner. Federally-owned land dominates particularly in the American West, where, through agencies like the Bureau of Land Management and the Forest Service, among several others, DC owns almost half of all land.

Deadbeat Landlords

In Nevada, for example, the federal government owns 85 percent of the land. And these figures do not account for other government holdings: land owned by state governments or even smaller public entities such as municipalities. Taken together, governments of one kind or another own about 35 percent of American land.

Government lands are historical centers of pollution and waste in the United States.

As environmental policy scholar Daniel H. Cole notes, “That is a comparatively high percentage of public landownership for a noncommunist country.” While today’s figure is down from the one that elicited Cole’s assessment (42 percent) it is nonetheless high, and it is perhaps surprising that governments should own more than one-third of the real estate from sea to shining sea.

What’s more, the ownership of submerged lands, offshore seabed beyond the tidal zone, is confined exclusively to governments. A federal statute grants the first three miles to respective state governments and everything further to Washington. These federal holdings total “more than 1.7 billion acres,” according to the Bureau of Ocean Energy Management, Regulation and Enforcement.

It will surprise few to learn that government lands are historical centers of pollution and waste in the United States. As Romina Boccia, Jack Spencer and Robert Gordon explain, “poorly conceived environmental laws, heavy-handed regulation, and aggressive litigation by political activists” function as high barriers to entry, severely constraining access to these lands. Such policies naturally “benefit special interests or powerful constituencies” at the expense of ordinary taxpayers and the environment.

Perverse Incentives

When environmentalists complain that the government should do more to protect the environment, they seem not to realize that the federal government already holds most of the power and natural resources—that this fact is itself the source of the moral hazard giving rise to the most serious environmental problems.

The federal government is an essentially lawless institution, unconstrained by the benchmark law of equal freedom, empowered to pollute and violate property rights with impunity. Acting as its own judge, it flouts the basic principles that support a free society. Government is thus entirely unlike ordinary property owners. It wastes and destroys its own holdings, because it lacks the incentives of the true owner, insulated as it is from the attendant costs.

The amelioration of environmental problems requires a devolution of power.

If government is unlike the ordinary property owner, then perhaps it is more like a trustee, holding these vast swaths of valuable land as the fiduciary agent of the people, the beneficiaries. But absent such defining incumbencies as the duty of care and the duty of loyalty to the beneficiaries of the trust, government isn’t very much like a trustee either.

Rather, government ends up looking like a criminal, an instrument of bald land theft, executed on a massive scale and in favor of influential friends.

Liberty Holds the High Ground

In the final analysis, then, we face a choice between a competitive, decentralized system and a centralized one, in which a privileged monopolist, that is both a major resource owner and a rule-giver, may waste property and resources quite without a thought to the costs associated therewith.

The results of such a system of moral hazard accord with the predictions of libertarian theory. In For A New Liberty, Murray Rothbard advised his fellow libertarians not to ignore the problem of pollution, not to cede the moral high ground on the issue to anti-market leftists. Rothbard understood that we must not put our pro-market, pro-private property “stamp of approval on those industrialists who are trampling upon the property rights of the mass of the citizenry” through reckless pollution. The amelioration of environmental problems requires a devolution of power: first to more directly accountable local bodies, and ultimately to individual proprietors, who have the strongest incentive to conserve.

  • David S. D’Amato is an attorney and independent scholar whose writing has appeared at the Institute of Economic Affairs, the Future of Freedom Foundation, the Centre for Policy Studies, and the Institute for Ethics and Emerging Technologies.