The Free Market Solution To Environmental Issues



everyone welcome back to another edition of ancap radio with me your host chase Rachel's now today we're going to be talking about the free market solution to environmental issues and here's an overview of what we will be discussing today now first up let's explore the concept of the tragedy of the Commons so what exactly is a tragedy of the Commons well let's use a pizza analogy to explain it let's say you have three kids and you give them each a personal pan pizza in this scenario what will likely happen is that each kilee his or her food at a comfortable and enjoyable pace now let's take the same scenario but rather than giving each of them a personal pan you plot down a medium pizza and say go at it you may have already guessed that at this point the children would proceed to eat a pizza at a much faster rate they know any pizza they don't consume will be taken by someone else thus the faster he eats the more pizza he'll be able to consume and vice-versa now the same concept applies to tree harvesting in public land since Elena's not owned the Lumberjacks who are given the temporary rights to cut down the trees will cut down as many as humanly possible with no regard for maintaining the capital value by over harvesting or refusing to replant and next we have the state so let's give the mainstream environmentalists the benefit of the doubt and concede that people are in fact inherently self-interested creatures and furthermore we'll always try to retain the most gain with the least amount of effort well this so-called criticism may be true for capitalists but it must also be equally applied to those who hold positions of power within the state since they too are presumably human now this has great implications as to the motives and influences of those in state power accordingly the state will generally allocate the resources that it has at its disposal in a manner that maximizes its own revenue and power just as any capitalist would now any business big or small will have the desire if possible to externalise as many costs as possible to include the costs associated with the waste it produces and this is where the state comes in if the cost of bribing politicians with campaign donations to socialize the cost of waste disposal is smaller than the cost of disposing the waste themselves then of course these businesses will take the former course of action and of course as happens as has been done in the past any cases brought up against these polluting businesses for property infringement will be struck down in the name of the greater quote-unquote public or economic good an associative consequence of this is the alleviation of any incentive to develop and utilize pollution control equipment since this would effectively be seen as an unnecessary expenditure furthermore any capitalist or entrepreneur who wanted to be environmentally conscious and occurred the cost of developing and equipping pollution control equipment would soon run out of business for this cost would have to be translated to the consumer which would in turn result in a loss of customers so that cheaper and less environmentally aware producers and furthermore because these businesses generally generate greater tax revenue greater deference will and has been shown to these industries at the expense of personal property rights now the state also has a tendency to subsidize resources such as water which causes it to be used more than otherwise would due to the economic incentives of using cheaper resources for overall cheaper production cost again these subsidies and allowances to blue serve to disrupt and distort the free market forces which would otherwise be more than sufficient and regulating the defusing of harmful pollutants ok next LP of the market now we're going to consider how the free market in a stateless society may handle some of the major environmental issues to include air pollution water pollution animal extinction and waste management now let me be clear however that the following are only examples of how these issues could be taken care of and not necessarily necessarily how they will undoubtedly the free market of ideas comprise the billions of minds we'll be able to come when up with and perpetually refine solutions to these issues far greater than the ones I'm about to present now let's take air pollution in a stateless society where the complete sovereignty of private properties upheld in the industries or businesses proven to be guilty of dispersing harmful pollutants and to the private property of others could be sued through the use of arbitration on the grounds of trespass however the burden of proof would fall upon the prosecuting party this system would quickly incentivize the market to develop techniques and technologies which may be used to track the origins of pollutants in all of whom they affect furthermore the competing businesses in the given industry will see it in their best interest to monitor their own levels of pollution for the sake of keeping it with levels at the Markinson at the excuse me that the market considers to be acceptable now these businesses would also want to monitor each other for any excessive polluting as this would be seen as an opportunity to publicize the transgression and absorb the resulting loss of customers from the sturdy business of course third-party pollution monitoring agencies would also arise to fulfill the demand to verify the claims of excessive pollution by interested parties now this same process or methodology may also be applied to any other industry causing any type of pollution okay next we have water pollution now currently most rivers lakes and of course the ocean remain unknown so again like we do with so many other areas in this topic we run into another tragedy of the commons scenario the upkeep and preservation of countless number of public lakes and waterways is neglected because no one has direct economic incentive to do otherwise so let's say someone owns a lake and there is a demand to use it recreationally in a mutually exclusive demand to use it for toxic waste disposal while the owner could simply compare the financial prospects of each and determine which course of action will you attend the greatest profit if the lake would be most effectively used for recreation then as prospect than as prospective profits will exceed those that would be received from a dumper and vice versa through this pricing mechanism the market is able to effectively and efficiently allocate which waters will be used for what purposes furthermore the prospective damage to the waters caused by any dumping would have already been incorporated into the price charge to dump thereby adequately compensating the owner for the diminishment of the waters future use now the cost of damage and cleanup required for oil spillage is also externalized the taxpayer so how is the free market handle this well again it's handled simply by permitting the ownership of these waterways patches of oceans or rivers etc so when someone is permitted to own these resources then he or she will have the incentive to predict future potential costs and risk of any activity that a third party wishes to conduct on them and will charge said person and amount that warrants such risk for example one may charge a single haul to oil tanker more more for crossing his or her patch of ocean than a double hauled oil tanker due to the increase for spillage posed by the single hull tanker okay next we have the issue of animal extinction now as it is the solution of so many other environmental problems the preservation of valuable animal species may also be achieved through private ownership now let's take the buffalo cow analogy for example cows are today nowhere close to extinction however buff was at one point we're on the brink of it but why physiologically there is very little difference between a cow in a buffalo so what was the differentiating factor between between the two well no one owned the Buffalo therefore the Buffalo economically speaking have very little value and word thus frequently shot with little recourse now on the other hand cows were owned and have never been under the threat of extinction thus abolishing the Commons otherwise known as public property and replacing it with private ownership serves provide a much greater incentive to protect and preserve the land earth and valuable animals which reside on it furthermore animals rights activists animals rights activists and groups would be more than welcome to ask people for donations to help fund the protection and care of various animals and lands now the difference between this function in the state would be a a much larger portion of the money given for the cause would actually make it to it and be all the money used for these purposes would have been contributed voluntarily now remember if enough votes can be generated to compel the state to take on these missions then surely these same voters will be willing to donate voluntarily to such causes in a stateless society okay next we have the issue of waste management so have you ever been asked whether or not you want to use paper or plastic bags in the checkout line well since either option is no more expensive than the other then we have no real incentive to take more environmentally-friendly paper option over the plastic one now it is commonly accepted that paper is better for the environment since it is biodegradable whereas plastic is not so if this is the case then why does it cause the same to dispose of each well that's simple it's because the government has already socialized the costs of all solid waste disposal by footing us the bill in the form of taxes thus we have no economic incentive to choose paper or plastic since we are paying the same for each one's disposal now let's contrast this to a free-market one presumably if you were to want to dispose a plastic at a privately-owned dump site then you would be charged more than if you were to dispose of paper since the plastic takes significantly longer to degrade and lessens the value of the property substantially more than his paper counterpart now in this manner the dump site owner has compensated himself for the diminishment of his property value by charging proportionately more for the disposal of plastic now in this free-market scenario the same person that check-out line would have a much greater incentive to choose paper over plastic due to the former's lower cost of disposal a next we're gonna talk about what the role insurance has to play in the free market solutions to these environmental issues so let's take air pollution we'll use air pollutions of target at risk being protected against since it tends to be the most elusive one now presumably in a free and stateless society there will be a great demand for clean air as with anything where there is a demand a product or service may be provided so in this case an insurance company would arise to meet this demand by guaranteeing a certain level of air purity in exchange for monthly premiums now perhaps there may be cases where a forest fire causes the amount of pollution to exceed the soul appear to guarantee by the insurance company so there there may be stipulations along the lines of we guarantee your air will never exceed pollution level X for more than a week so let's say that this insurance company or this insurance rather is being offered to a residential community now the cost the premiums for this insurance will be based on this community's – running environment if it's located in a manufacturing hub like Detroit then premiums will likely be higher than if it were located in the countryside of South Dakota now let's say the insurance company tells its clients that if pollution exceeds the guarantee levels that it will pay them 1 million dollars each and we'll also assume there are a hundred people there are 100 people in this community who have decided to purge this insurance well the first thing this insurance company is going to do is set up a monitoring system that's able to track the levels of pollution within this community so as to give it some morning when levels rise so that it may be able to take measures to reduce them and furthermore they would use this data as legal defense against any false claims made by its clients of pollution excess so at this point it will be in the insurance company's best financial interest to take proactive measures to katroo to curtail any potential rise of pollution levels now remember if pollution levels exceed what the insurance company guaranteed then we'll have to shell out 100 million dollars to its clients therefore the insurance company will view any preventive costs less than 100 million dollars to be financially warranted so one step it may take would be to buy any land upwind of this community and only sell parcels of it under the condition that it not be used for high pollution purposes however let's take the worst-case scenario and say that a very filthy factory developer buys a plot of land next to this community and begins construction well in this situation the insurance company could either offer to buy this land back from the developer or to pay for pollution control equipment for his or her factory now the owner of this factory will likely be receptive to the lighter offer as any pollution it would create and dispersed amongst the private property of others would serve as a huge liability risk okay guys that's all I have for you today if you like this video please subscribe to my channel at youtube.com slash encap chase and also check out my facebook page at facebook.com slash n capper radio and finally if you're a huge fan you can always donate at tinyurl.com slash donate and cap chase thanks

Author Since: Mar 11, 2019

  1. @AncapChase what about national parks, wild life reservations ect. Friend wants to know what would prevent them from being plundered

  2. Wow. Boggles my mind how someone could actually give this lecture with a straight face. Your surface level understanding of environmental issues, as well as your Reagan-era "Econ 101" view of market forces, mixed in with the classic "free-market solves everything" irrationality, gives you a perfect background to lecture about complex systems.

  3. … desolation of that type of fish in that area. The framing of this argument is irrational, because the historical, empirical facts of pollution and resource use are being ignored.

    And I will not comment on the rest of the video, because if you are this misguided and ignorant of environmental issues due to a fascination with the market principle and an irrational hatred of government power in any way, then whatever I say you will probably dismiss anyway to support your pre-established bias.

  4. …property in the first place since it was a "commons." also, the driving force in real life (not in this badly-framed, biased analogy) is not that whatever they don't eat "will be taken by someone else," it's because the decrease in the supply due to overharvesting of resources such as fish causes the price to rise (supply and demand) which incentivizes the persons/businesses to overharvest that resource even More, creating a negative feedback loop that eventually results in the complete …

  5. … (but this is by no means a guarantee that smaller businesses actually do this, they just have more of a need to). the "environmental issues" as described in this question due to businesses occur because the issues are "externalities" to those polluting businesses, whether it's 1) the fact that a business owns the land but will soon use up the resources, pollute the land, and then sell it only to do the same to another piece of property, or 2) the fact that the business never owned the …

  6. .. else once this has been overused/polluted past a tipping point, or 2) go into a different line of business entirely using their massive amount of capital. large corporations have no loyalty or need to take an interest in preserving local resources as smaller businesses may have who do not have the capital to move on to "consume" another batch of resources or land once this land or resource is used up, and therefore are more likely to take into account long-term planning and consequences …

  7. -the framing of this analogy is flawed, because even land that is owned by people/companies are still abused and polluted. this argument is saying that just because a person/company owns land/resources they will not pollute or use those resources unsustainably. but time and again, companies pollute and overuse resources until they are extinguished regardless of ownership of the land or it being a "commons," especially big corporations, because they 1) know that they can just go somewhere …

  8. i would imagine that you would put it to some kind of exclusive use. for example, if it is a river then you could install a hydroelectric dam to sell electricity or even just power your own house.

  9. In such a society, the claim over any given property is only validated by a homesteading paradigm– you can't just point at some land/water and call "dibs!" Therefore, unclaimed property will still exist. Where it is possible to environmentally damage/destroy said land/water without also damaging anyone else's claim in the process, the problems associated with the Tragedy of the Commons will persist unchecked. Anyone who later homesteads this damaged land/water has no standing for grievance.

  10. Hey thanks Gay for the question. Now the beautiful thing about a free society is that there are no such things as "Legal fictions" like the corporation, to where the senior staff can shift liability to the coroporation abstract haha. So taking this "shell" company for instance, whoever is running the shell company and authorizing this pollution would be held liable. It is the prospect of this liability that deters the polllution in the first place.

  11. Sure but it wouldn't be a bribe at that point so long as all the individuals affected had agreed to allow this pollution…now if there were some affected by this pollution that didnt agree to allow it, then they'd have "legal" standing to sue this company through the use of arbitration on the grounds of trespass.

  12. well if the company did buy the lake then it would be allowed to dump whatever it wanted to in there. The only time someone would be legal liable for any damages would be when his/her pollution negatively and measurably affected someone else or someone else's property. In this case there wouldn't be any "excess" it would just have to be a measurable and harmful ammount. These determinations would be made by a third party arbiter. The prospect of losing future business drives them to comply.

  13. Yes this would be considered insurance fraud, just as burning your own house down and asking the insurance company for restitution would be…so there would be clauses in the contract of the insurance policy prohibiting such deliberate sabotaging activity 🙂

  14. Bang out mate. Im starting to write a paper on 'unorthodox' praxaologic outcomes in society. Discussions like this will be included.

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