Capitalism and Environmentalism

Tibor R. Machan

Political outlooks rarely get put into practice completely, without many compromises made in their principles. Even Soviet style socialism had a lot of free market elements interspersed with it when nearly 40% of farming was done on the black market. And there is no such thing as capitalism in America or anywhere else, not full blown, no-holds-barred laissez-faire capitalism.

Still these political visions can be test by way of thought experiments and some careful history, to see which would be best to try to achieve in practice. And one of the major challenges put before champions of a fully free, capitalist political economy comes from those worried about environmental degradation.

Often the worry is put in terms of “What about all the negative externalities that capitalism would create?” Which means, what about such things as pollution of the air mass, water ways, and so forth. The idea that’s put forth in criticism of capitalism is that if we had full scale private property rights respected and protected, people could do whatever they wanted with what belongs to them and this would involve dumping all kinds of harmful stuff around their property—thus, negative externalities.

But the picture is utterly misconceived. Precisely because private property rights would have to be respected and would gain full, uncompromising legal protection, negative or harmful externalities would be prohibited. (Of course, if I dump a bunch of dollar bills on your property, you probably will not protest a lot, so positive externalities would probably not be widely criticized.) The widespread respect for private property implies that what is mine is under my jurisdiction but beyond my borders it is those who are in charge of those realms who get to call the shots. And no one at all gets to have the authority to invade other people’s property.

Bringing this off in practice has its challenges of course—exactly where does one’s property end, say, looking upward or on a beach front? Does property include ideas, such as a novel or computer software or musical arrangement? And what about images, such as photographs and paintings? These and similar issues would need to be hashed out in theory, as they arise, and sometimes even in the courts—where they would, supposedly, be debated in a civilized, orderly fashion and a sensible resolution—or as close to it as humanly possible—reached and then implemented.

Still, the idea of a system of political economy in which the institution of private property is of primary significance would by no means encourage environmental degradation, waste, lack of conservation and so forth, quite the opposite. As Aristotle already knew, when people need to heed their own stuff, they are more careful than when they deal with commonly owned resources. As he put the point, "That all persons call the same thing mine in the sense in which each does so may be a fine thing, but it is impracticable; or if the words are taken in the other sense, such a unity in no way conduces to harmony. And there is another objection to the proposal. For that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few." (Politics, 1262a30-37). The ancient historian Thucydides also observed that “[People] devote a very small fraction of the time to the consideration of any public object, most of it to the prosecution of their own objects. Meanwhile, each fancies that no harm will come to his neglect, that it is the business of somebody else to look after this or that for him; and so, by the same notion being entertained by all separately, the common cause imperceptibly decays.” (The History of the Peloponnesian War, bk. I, sec. 141).

And, of course, history bears out these reflections—near-enough-to-capitalist societies are cleaner, preserve and conserve resources more vigilantly than do near-enough-to-socialist ones where—like in the old USSR and even contemporary China—pollution and waste have been immense. So both on the basis of history and careful reflection, it makes much better sense of trust a free market, private property rights based political economy when it comes to environmental values than those that let the state manage it all.