Unit Eight
Objectives
The goal of this unit is to:
- Examine the concept of public property and the tragedy of the commons.
- Discover the historical failures of collective farming.
- Explore the notion that government control is an appropriate way to keep the environment healthy.
In a hypothetical scenario, someone is about to acquire a house, and they have the unusual choice of buying it or renting it. They do the sums and find that the two sets of cost are identical. The only difference is that if they rent it the landlord gets to pay for repairs but enjoys any appreciation in its market value, whereas if they purchase it they pay those expenses and receive that future gain.
In those two cases the likelihood of them going to the trouble of improving the house, keeping it nicely decorated and its garden well tended, is higher when they purchase it rather than rent. It is very obvious when one thinks about it, and applies not just to houses but to anything one might rent; the property is treated with respect so as not to break an agreement with the owner, but people have no incentive to do more than that. People will drive a rented car just a little harder than one they own. And if they are in to cars they might lavish all kinds of money on enhancing its appearance and accessories and souping–up its performance . . . but not unless they own it!
That is why, other things being equal, homes that are owned by the occupier tend to be much better cared for than homes that are rented. This can be discovered easily, just from a drive around the neighbourhood! The premise of self–ownership leads logically to the conclusion that each individual exclusively owns not just their own lives but also any property acquired without theft or deception — whether by making it or by exchanging one’s labour for it. And ownership of the things external to one’s self is entirely central to the matter of environmental care.
“Public property”
“Property” is stuff that is owned; and as has been shown, “ownership” means that somebody has the exclusive claim to control and dispose of the stuff. Therefore stuff is property only if it has an identifiable owner, some person or group of persons with the right to control and dispose of it after having acquired it in a proper manner; such as by a voluntary exchange under contract.
“Public” on the other hand means that there is no identifiable person or group; the term refers to everyone or nobody — or possibly to the government, whose composition changes frequently and which never acquired anything by voluntary exchange or other honest means.
Accordingly, “public property” is an oxymoron; the two terms contradict one another, and as Aristotle said, “contradictions do not exist in reality but only in the minds of those who do not think clearly.” It is a gigantic myth; a classic case of “garbage in” which leads to all manner of “garbage out” — literally in damage to the environment.
In the nineteenth century demand for whale oil was high, but nobody owned the oceans — they were, and are, “public property.” Result: The near extinction of whales, prevented only by the discovery and exploitation of hydrocarbon oil and its ever more affordable extraction and refinement by those in the business, such as Rockefeller.
Today there is sometimes alleged to be “overfishing” when fishing fleets catch “too many” fish. Again: Nobody owns the ocean, it is “public property”, so there is no owner to rent out fishing rights and fish stock is endangered. The fault is not with the fishers, but with the absence of property rights.
There is also alleged to be “dumping” of damaging emissions such as carbon dioxide, soot, and sulphur into the atmosphere. The root of the problem is that government does not enforce property rights in the air above land, and without an alternative to government courts it effectively means there is no owner, so nobody can rent out limited pollution rights — for their portion of the air — and sue if they are exceeded. Similarly garbage may be dumped into a “public–property” river, with damage downstream; nobody owns the river, so nobody is there to moderate or prevent the practice.
One need not suppose that it is easy to get ownership rights established for such huge resources as the oceans or the atmosphere. But pollution and misallocation of resources will certainly continue until they are so established; because their absence causes the problem.
Collective farming
When the Pilgrims settled near Plymouth they followed a communist agricultural method; the land was said to be “common” and the principle followed was “[labour] from each according to his ability, [food] to each according to his need.” The result was that the colony was nearly wiped out by malnutrition and resulting disease; only in the nick of time were individual property rights established so that each farming family kept the fruits of their own labour — and exchanged them of course in the market. American agriculture has hardly looked back, and remains the breadbasket of the world.
Such collective farming was imposed on Russian peasants in the twentieth century, and by its end the Soviet Union was, likewise, close to starvation. By 1989 one–third of all food consumed there was produced by the peasants allowed to own about ten percent of the available land and keep or market what they grew. The disaster in China during the same period is even better known; tens of millions died.
Those dreadful examples followed imposition, by government, of the myth of “public property.” When true ownership — private property — was re-established, prosperity followed.
Why? Simple: Motive! The farmer’s personal rewards depend on their labour, and as the land owner they have a direct interest in making it as productive as possible over as long a period as possible. In that simple principle lies the solution to the problem of over–harvesting of timber; if the logging is on “public land” nobody is motivated to plant new trees for the next generation. Proper tree–farming, with the owner having a direct long–term interest, does. If there is “too much” forest clearance in the Amazon river valley, the reason is because that land is said to be “public” instead of being actually owned.
Government control
Perhaps dimly perceiving that problems follow a failure to establish private property rights, all too often governments step in to muddy the waters. The political process is used to set rules. Being a political process, the rules are chosen to favour those who are politically strong — whether they have an interest in the asset being controlled, or not — and it is not easy to tell which is worse. Rules, expensive to obey, are set for factory owners about how much pollution they may emit; and laws by their nature being one–size–fits–all, sometimes they may help, sometimes they have a net negative effect — such as not improving the environment, while making the goods produced more expensive. Since there is no market operating, through which the price of polluting could be rationally determined, it is hit and miss at best.
With an exception here and there, the practical evidence from around the world is that the more powerful the government, the worse the damage to the environment. Through the 1990s, Chinese cities were laden with smog. The former Communist area of Europe is still notorious for gross pollution from its often needless, old–technology and uneconomic steel and power plants. Those who suppose government to be the solution to wicked capitalist polluters should take a tour there — and it is no coincidence that history’s only serious nuclear power accident occurred in the Soviet Union, where private ownership and responsibility were most fully suppressed and where government control was tightest.
The notion that government control is an appropriate way to keep the environment healthy is also demolished by the fact that by far the most dangerous threats to it have been deliberately created by government, as weapons of mass destruction. No matter that those weapons may never be used; they do exist, and unless they are safely taken apart they will threaten all life on Earth for thousands of years to come. For example, the storage of over two thousand tons of bio–chemical weapons at Pueblo, Colorado. The destructive power of what those half–buried huts contain could, if released, turn the planet into a desert. Trouble is, everything is stored in canisters and the canisters are going rusty. Work is now in progress to dispose of them safely. But it is worth remembering that they were put there by government in the first place.
In 2005 there was a disaster in New Orleans; much of that city sheltered behind levees, and they fell apart under the impact of an unusually strong hurricane. Pretty well everyone was blamed for it except the actual culprits: Government. Government built the levees, causing massive imbalance to the water table and even the coastline. Government designed them to withstand Class Three hurricanes but nothing more. When hundreds of thousands of homes were flooded, it was to government that the victims turned, and it was government that promised a virtual blank cheque to rebuild — without pausing to ask whether it was sensible to rebuild. The environment is far too delicate to let government anywhere close!
Review
Make use of the following questions and the associated feedback to check knowledge and understanding of the topic covered in this unit.
In what ways could property rights to the atmosphere might be acquired in a free market?
Sorry to see you go, and sorrier yet to see you abandon reason to prejudice and myth. It is actually crazy to suppose, against all reason and experience, that the environment can be adequately cared for and preserved by non–owners.
Correct; there could be a series of “columns” of atmosphere, reaching out as far as the atmosphere does. Air would pass through them physically, including any pollution; whose source could be traced and the polluter approached for interfering with the property right. Since there would be no “public land” — land with no identifiable owner — there would be no air that a polluter could pollute without permission and/or payment.
They could, and quite possibly would. However it would be hard to begin the process there; since there is presently no recognised owner of air, to whom would the initial payments be made? More likely that landowners would just stake a claim to air above their property, and then have courts confirm those rights when challenged.
That too is possible, and do not forget that air and many other asset types can have multiple users at different times. Owners would in fact have an obvious incentive to rent out use of physical assets when not directly using them for their own purposes.
Obviously it is simpler for government to impose a pollution tax than to have large numbers of downstream air owners sue polluters for breaches of contract. Why make it so complicated?
Exactly. If government supervision of the environment sufficed, there would by now be no trace of a problem. But the opposite is true, as has been shown; the more powerful the government and the more suppressed the market, the worse has been the pollution.
Correct. This factor is infinitely more important than simplicity of administration.
Right. Absolutely zero pollution is neither necessary nor practicable — but contracts between air owner and polluters could specify what levels are acceptable and charge money for their use. Worth administering!
To “solve” one problem by creating a thousand others is no solution.
What would happen to the freedom of flying?
True. Flying is still a matter of “Mother, may I? in the sky” and while for some decades a ground–based traffic control system may have been needed it never had to be run by government and for many years now technology has made airborne collision–avoidance systems perfectly feasible. The removal of “Mother” — or Nanny — would herald a literally new dimension of travel, sport, and pleasure for individuals.
It is not better to keep atmosphere “public”, and “public property” is an oxymoron, something that absolutely can not exist in reality. So please, get real; try harder.
Of course. Once liberated to do so, there is no limit to what a free market can accomplish. Before the computer age that might have been hard; today, it is a non–issue.
Suppose it were beyond question — and today, it is not — that “global warming” by excess carbon dioxide emissions would definitely cause climate changes with enormous catastrophes worldwide. How a free market would prevent or postpone the problem?
What this — and the Green airheads who call for it — completely ignores is that a very large part of what humanity has built so as to pull billions of people out of millennia of abject poverty would be destroyed by a termination of carbon emissions. This would not solve the problem, it would merely substitute another — far, far worse.
Exactly. Because the bulk of global temperature changes are way outside human control this may not prevent a big climate change over the next few hundred years, but the market is by far the most efficient way to signal such future changes and provide immediate money incentives to soften or postpone their effect.
Correct. It has been shown how atmosphere ownership would allocate prices to pollution. The market would produce clean–fuel alternatives faster than any other way because nothing would prevent it! Today the oil industry is not a free market but a giant cartel consisting of a few dozen governments producing crude and a few dozen companies, all with close ties to politicians, refining and distributing the fuels and even controlling the points of sale, for example gas stations. Ethanol and bio–diesel on offer at every farmer’s gate, distilled without need for government license from corn and soybean grown on their land, would nicely wind down that theory about global warming.
American farms are “the breadbasket of the world”. Are they as productive as they might be; and why, or why not?
That is not a good standard of comparison. Most other countries have far greater government manipulation of the farming industry, and far less of a free market; no wonder Americans do better. America also has more land, relative to the population. But that does not at all mean there is no room for improvement.
Right. America has never fallen into the Communist collective–farming trap, but are wallowing only too deeply in that of artificial, tax–funded incentives; this is a Fascist trick, enabling government to control without owning. A properly free farming market would produce far more food for a hungry world.
True; and the methods used to cause that consolidation were disreputable and included first offering unrealistically low–interest bank loans for modernisation, followed by a crippling increase in interest rates that forced many farmers into fire–sales. The only way to ensure the most productive use of land resource is a fully free market in farming — and the result may be surprising, for if the food market becomes saturated the land might well be used instead to ”grow” clean fuel. All that might have happened over the past half century, with a great reduction in dependency on Middle Eastern oil and the violence and turmoil that it has helped produce.
Unit Eight
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