Saturday, June 30, 2007

Pollution and Government

Tibor R. Machan

At a recent conference I attended one speaker made the point, now widely admitted, that air quality in America has markedly improved over the last several decades. (For a good treatment of this topic, see Joel Schwartz, “Blue Skies,” The American, May/June 2007.) Yet at the same time the speaker also argued for a free market in air quality management.

Some in the audience came up to me later—I had invited the speaker—and said, “How could he criticize government intervention in air quality control when his own data suggests that the improvements occurred because of stricter standards imposed by the government.” And this was a fair enough question—can one defend a free market in this area after it has been government that has helped to reform much of the country when it comes to pollution, ozone depletion and similar vices that have been responsible for so much dirt in the air and water around the country?

Actually, there is no contradiction here at all. The reason is that a free market does not by any means preclude law enforcement where crimes are concerned. Just for starters, a free market system requires steady and consistent identification and protection of private property rights. And it also requires respecting freely entered into contracts, something that very often involves the courts and police.

Indeed, the free market presupposes private property rights and enforcement of contracts, both ultimately in need of legal adjudication and law enforcement. This is just like the fact that a free country presupposes the protection of the rights to life, liberty and pursuit of happiness of its citizens by the agency that is instituted to carry out that job, usually (but not only) the government.

Setting up and enforcing standards of air quality is not in principle different from this kind of law enforcement—the only kind that was identified by the American Founders as the just power of government, namely, “to secure our rights.” Yes, rights-protection involving pollution is a complicated matter—detection is tougher, borders are not easy to define, etc. But that is what a legal order is for, namely, to apply the basic principles of a free society to ever more complicated matters. Just consider how free speech rights need to be translated now to be properly applied to the Internet. The framers of the U. S. Constitution could not anticipate the details but the principles they identified are so general—they apply to human community life in all its incarnations—as to have implications for matters they couldn’t even imagine.

When pollution became a problem in America, it took a while to see how the law ought to deal with it. Many champions of government intervention wanted to do this by means of heavy government regulation, as if some Tsar at the top could manage it all. In fact, however, that option falls victim to numerous problems, including what public choice theory suggests, namely, that regulators tend to have their own agenda, influenced by various special interests.

In time, however, it became clear enough to many that the only sensible way to deal with pollution and similar problems is by applying the principles of property rights. What economists call negative externalities—bad side effects of production and transportation that injure non-consenting bystanders—need either to be internalized (firms need to handle them by assuming full cost for their containment) or banned (when the damage is significant enough).

As these legal devices became more and more sophisticated—and sometimes used by government regulators to impose certain standards that would indeed be helpful (although regulation wasn’t necessary to do so; adjudication would have handled it all)—the problems of pollution began to abate. And as Schwartz shows, despite massive expansion of industrialization, transportation, and population, America is now cleaner than it was been a long time. It wasn’t government meddling that brought this about but the proper deployment of governments legal powers to stop some people from dumping their waste products on innocent others.

No comments: