The Indy Star has an editorial which brought to mind one of the issues that frequently comes to my mind. I only read the headlines on the original article, and I won’t have time to expound this morning, so my apologies for my slipshod methods.
Anyway, the editorial is in response to a recent report on “the latest and largest federal study of cancer risk from air pollution show an intolerably high level of vulnerability for all of Indiana, especially Marion and Lake counties and their older, industrial neighborhoods.”
While Indiana’s average level of risk was 33 in a million (more than 1 in a million is cause for concern), Marion County’s was 51 in a million and Lake’s 64 in a million. Marion ranked 87th among 3,000 counties, Lake 38th. Those are “honors” that must be stripped, starting yesterday.
Pollution highlights one of the inadequacies of the free market. I suppose it’s nothing more than the tragedy of the commons. But, where you have pollution, you have a situation where the price of a transaction doesn’t reflect its costs. Some of the transaction’s costs are externalized onto the public at large. Say you’re making a widget and part of the widget making process involves pumping pollutants into the air. The manufacturing process involves costs that take the form of people in the area breathing in the pollutants and suffering adverse health consequences. Those costs are not reflected in the price the buyer pays the seller of the widget. Instead, the people in the area subsidize the widget maker by paying for the resulting health problems themselves.
You have a forced subsidy by the people in the community that allows the widget to be sold at a lower price. Subsidies corrupt the market. If prices do not accurately reflect costs, the market receives the wrong signals. It encourages inefficient market activity. So, to make sure the market works well, you have to make sure that manufacturers are forced to incorporate all of the costs of manufacturing into the price of the product. To me, that means regulation requiring manufacturing processes that do not allow the public to be exposed to pollution. Obviously such methods are more expensive, but that is to be expected — the public is no longer subsidizing the process by ingesting pollutants.
As a philosophical matter, I think this is consistent with my libertarian leanings. It involves government regulation, which obviously makes libertarians squirm. But, libertarians are also fiercely devoted to protection of property rights. That means they should be very much opposed to a manufacturer corrupting the atmosphere in and around someone else’s property and causing harm to someone else’s body. The idea that “your right to swing your arm freely stops at my nose” is something that most libertarians I know are comfortable with. A strong aversion to pollution is consistent with this idea. Maybe there are better ways than preemptive government regulation to incorporate the cost of pollution into the price of the product, but I have not seen them. Any solution that relies primarily on post-injury litigation to enforce the rights of a member of the public against a polluter is going to be extremely inefficient and probably ineffective.
I’m 100% with you on your position and analysis, Doug.
I, too, have libertarian (and, in my case, even Libertarian Party) roots. It is shameful to me that most “libertarians” in practice seem to be single-issue voters whose sole concern is the top marginal tax rate. They consider the conservative Republicans who are trashing the country (and perhaps even the planet) their fellow travelers. Don’t raise taxes, and everything will work out, as if by magic. It’s a spectacular failure of rationality from a political party with so many members who claim ideological heritage from the ultra-rationalist Ayn Rand.
As a group, to hell with ’em — but I’m always on the lookout for a quasi-libertarian who’s walked some of the same roads I have, which is probably why I find your blog such good reading, even where we disagree.
Cheers!
Thanks for the kind words. I spent a few years in college considering myself a libertarian idealogue. But, while I like to view citizens as primarily being individuals, the fact is that the community serves certain indispensable functions and that the market, great mechanism that it is, can be gamed. Government is necessary to ensure the necessary functions of the community are performed and to ensure that there is the potential for corrective force to be applied when markets are gamed. (On the other hand, the fact that government is often the very device used to game the market is a significant problem.)