Free Market Free Market EnvironmentalismEnvironmentalism

By Terry L. Anderson By Terry L. Anderson

and and

Donald R. LealDonald R. Leal

What is Free Market What is Free Market Environmentalism???Environmentalism???

• It proposes a system of It proposes a system of environmental regulation based on environmental regulation based on private property rights using positive private property rights using positive incentives, and market forces to incentives, and market forces to encourage property owners to encourage property owners to conserve resources. conserve resources.

The line of reasoningThe line of reasoning

• People tend to act in a self-centered way. People tend to act in a self-centered way.

• When a resource is freely available to a When a resource is freely available to a number of people, the motive is to take as number of people, the motive is to take as much as they can before someone else much as they can before someone else does.does.

• This causes the resource to be overused.This causes the resource to be overused.

The line of reasoningThe line of reasoning

• When a resource is privately owned, the owner When a resource is privately owned, the owner can defend that resource legally from others.can defend that resource legally from others.

• Since the owner has the resource to his/her Since the owner has the resource to his/her self he/she has an incentive to make tat self he/she has an incentive to make tat resource last longer in order to make as much resource last longer in order to make as much money as possible.money as possible.

• This leads to better conservation on the This leads to better conservation on the part of resource owners, and reduces part of resource owners, and reduces the need for bureaucratic regulation, the need for bureaucratic regulation, which saves $$$.which saves $$$.

BenefitsBenefits

• Environmental BenefitsEnvironmental Benefits

• Economic Benefits (i.e. money)Economic Benefits (i.e. money)

Real World ExamplesReal World Examplesof Free Market Environmentalismof Free Market Environmentalism

• Lumber Lumber

• WildlifeWildlife

• HabitatHabitat

Real World ExamplesReal World Examplesof Free Market of Free Market

EnvironmentalismEnvironmentalismLumberLumber• Ravenna Park: Seattle, Washington.Ravenna Park: Seattle, Washington.

First privately owned and then the First privately owned and then the city of purchased it and it fell into city of purchased it and it fell into public domain.public domain.

Environmental benefits when privately Environmental benefits when privately owned.owned.

Consequences of land falling into public Consequences of land falling into public domain.domain.

Real World ExamplesReal World Examplesof Free Market of Free Market

EnvironmentalismEnvironmentalismWildlifeWildlife• International Paper CompanyInternational Paper Company

Management of Wildlife on Management of Wildlife on property for additional revenue.property for additional revenue.

Real World ExamplesReal World Examplesof Free Market of Free Market

Environmentalism:Environmentalism:HabitatHabitat• Ranching-for-Wildlife: improve Ranching-for-Wildlife: improve

habitat for wildlife habitat for wildlife

• Planting trees, improving brush coverPlanting trees, improving brush cover

• In turn for less stringent hunting In turn for less stringent hunting guidelinesguidelines

The positive economic effects of Free Market

Environmentalism

Limiting federal management Limiting federal management saves tax payers moneysaves tax payers money

• Private parks would be controlled more Private parks would be controlled more economicallyeconomically– Less money wasted by bureaucracyLess money wasted by bureaucracy– Private parks would have an incentive to make Private parks would have an incentive to make

money, since they are a businessmoney, since they are a business– National forests have no incentive to make National forests have no incentive to make

smart choices economically.smart choices economically.– National forests in Montana lost $42 million National forests in Montana lost $42 million

between 1988-1992between 1988-1992– Private property is taxablePrivate property is taxable

National resources would be National resources would be managed economicallymanaged economically

• Private ownership would stop much Private ownership would stop much of the waste of natural resources.of the waste of natural resources.

• Resources would not be taken to the Resources would not be taken to the point of depletionpoint of depletion

• Water and natural resources as well Water and natural resources as well as animals could be as animals could be monitoredmonitored carefully so that problems could be carefully so that problems could be fixed immediately before it is too latefixed immediately before it is too late

Production control=price Production control=price stabilizationstabilization

• Production will be monitored and Production will be monitored and kept stable according to current kept stable according to current market value.market value.

• There will be an even flow of product, There will be an even flow of product, keeping prices even as opposed to keeping prices even as opposed to highs and lows depending on what highs and lows depending on what new cache of resources were found.new cache of resources were found.

UpkeepUpkeep

• Private parks would have better Private parks would have better upkeep because that park is upkeep because that park is somebody's business.somebody's business.

• New ideas about upkeep New ideas about upkeep management.management.

• Tourism would rise causing a rise in Tourism would rise causing a rise in cash flow.cash flow.

Ownership of animalsOwnership of animals

• Would be rationed same as national Would be rationed same as national resources.resources.– Would be bought and sold as a Would be bought and sold as a

commodity depending on highs and lows commodity depending on highs and lows in populationin population

– Would stop over hunting, and under Would stop over hunting, and under hunting.hunting.

– Would also work for fisheries and Would also work for fisheries and recreational lakes.recreational lakes.

Free Market Environmentalist Free Market Environmentalist Solutions to Existing ProblemsSolutions to Existing Problems

• Air pollutionAir pollution

• Water pollutionWater pollution

Free Market Environmentalist Free Market Environmentalist Solutions to Existing Problems:Solutions to Existing Problems:

Air PollutionAir Pollution• Problem: Air is a commons. When we try to Problem: Air is a commons. When we try to

reduce air pollution, everyone benefits, but reduce air pollution, everyone benefits, but only a few (the producers of air pollution) only a few (the producers of air pollution) bear the greatest cost.bear the greatest cost.

• Put a money value on clean air. Polluters Put a money value on clean air. Polluters would be held responsible for the pollutants would be held responsible for the pollutants they release; either by cleaning up after they release; either by cleaning up after themselves or paying citizens the differencethemselves or paying citizens the difference

Free Market Environmentalist Free Market Environmentalist Solutions to Existing Problems:Solutions to Existing Problems:

Water PollutionWater Pollution• The main problem plaguing all types of The main problem plaguing all types of

pollution is the “whose responsible?” pollution is the “whose responsible?” questionquestion

• If someone owned the water source that If someone owned the water source that was polluted, then it would be easier to was polluted, then it would be easier to decipher who caused the pollution, and decipher who caused the pollution, and who has to take responsibility to clean it who has to take responsibility to clean it up. Easier to place blame on a party.up. Easier to place blame on a party.

Criticisms of the Free Market Criticisms of the Free Market Environmentalist Approach Environmentalist Approach

• Criticism: Free market environmentalism Criticism: Free market environmentalism thinks about problems only in terms of thinks about problems only in terms of economics, and many environmental issues economics, and many environmental issues are hard to quantify in terms of dollar value.are hard to quantify in terms of dollar value.

• Response: If, say, land developers are willing Response: If, say, land developers are willing to pay more for land than environmental to pay more for land than environmental groups are, then there is more economic groups are, then there is more economic value in selling that land to developers.value in selling that land to developers.

Criticisms of the Free Market Criticisms of the Free Market Environmentalist ApproachEnvironmentalist Approach

• Criticism: Pays too little attention to Criticism: Pays too little attention to distribution of rights.distribution of rights.

• They’re all rich white people in the They’re all rich white people in the environmental movement anyway.environmental movement anyway.

Criticisms of the Free Market Criticisms of the Free Market Environmentalist ApproachEnvironmentalist Approach

• Criticism: F.M.E. focuses too much on Criticism: F.M.E. focuses too much on politics and economics, ignoring politics and economics, ignoring other institutions such as other institutions such as communities.communities.

• Resp.: You’re just thinking about it Resp.: You’re just thinking about it the wrong way.the wrong way.

EditorialsEditorials

• Bla bla bla. Potato chips are stupid.Bla bla bla. Potato chips are stupid.