Left-liberal intellectuals are often a wondrous group to behold. In the last three or four decades, not a long time in human history, they have, like whirling dervishes, let loose a series of angry complaints against free-market capitalism. The curious thing is that each of these complaints has been contradictory to one or more of their predecessors. But contradictory complaints by liberal intellectuals do not seem to faze them or serve to abate their petulance – even though it is often the very same intellectuals who are reversing themselves so rapidly. And these reversals seem to make no dent whatever in their self-righteousness or in the self-confidence of their position.
Let us consider the record of recent decades:
1. In the late 1930s and early 1940s, the liberal intellectuals came to the conclusion that capitalism was suffering from inevitable “secular stagnation,” a stagnation imposed by the slowing down of population growth, the end of the old Western frontier, and by the supposed fact that no further inventions were possible. All this spelled eternal stagnation, permanent mass unemployment, and therefore the need for socialism, or thoroughgoing State planning, to replace free-market capitalism. This on the threshold of the greatest boom in American history!
2. During the 1950s, despite the great boom in postwar America, the liberal intellectuals kept raising their sights; the cult of “economic growth” now entered the scene. To be sure, capitalism was growing, but it was not growing fast enough. Therefore free-market capitalism must be abandoned, and socialism or government intervention must step in and force-feed the economy, must build investments and compel greater saving in order to maximize the rate of growth, even if we don’t want to grow that fast. Conservative economists such as Colin Clark attacked this liberal program as “growthmanship.”
3. Suddenly, John Kenneth Galbraith entered the liberal scene with his best-selling The Affluent Society in 1958. And just as suddenly, the liberal intellectuals reversed their indictments. The trouble with capitalism, it now appeared, was that it had grown too much; we were no longer stagnant, but too well off, and man had lost his spirituality amidst supermarkets and automobile tail fins. What was necessary, then, was for government to step in, either in massive intervention or as socialism, and tax the consumers heavily in order to reduce their bloated affluence.
4. The cult of excess affluence had its day, to be superseded by a contradictory worry about poverty, stimulated by Michael Harrington’s The Other America in 1962. Suddenly, the problem with America was not excessive affluence, but increasing and grinding poverty – and, once again, the solution was for the government to step in, plan mightily, and tax the wealthy in order to lift up the poor. And so we had the War on Poverty for several years.
5. Stagnation; deficient growth; overaffluence; overpoverty; the intellectual fashions changed like ladies’ hemlines. Then, in 1964, the happily short-lived Ad Hoc Committee on the Triple Revolution issued its then-famous manifesto, which brought us and the liberal intellectuals full circle. For two or three frenetic years we were regaled with the idea that America’s problem was not stagnation but the exact reverse: in a few short years all of America’s production facilities would be automated and cybernated, incomes and production would be enormous and super-abundant, but everyone would be automated out of a job. Once again, free-market capitalism would lead to permanent mass unemployment, which could only be remedied – you guess it! – by massive State intervention or by outright socialism. For several years, in the mid-1960s, we thus suffered from what was justly named the “Automation Hysteria.”1
¹ Ironically, the conservative economist Dr. George Terborgh, who had written the major refutation of the stagnation thesis a generation earlier (The Bogey of Economic Maturity ), now wrote the leading refutation of the new wave, The Automation Hysteria (1966).
6. By the late 1960s it was clear to everyone that the automation hysterics had been dead wrong, that automation was proceeding at no faster a pace than old-fashioned “mechanization” and indeed that the 1969 recession was causing a falling off in the rate of increase of productivity. One hears no more about automation dangers nowadays; we are now in the seventh phase of liberal economic flip-flops.
7. Affluence is again excessive, and, in the name of conservation, ecology, and the increasing scarcity of resources, free-market capitalism is growing much too fast. State planning, or socialism, must, of course, step in to abolish all growth and bring about a zero-growth society and economy – in order to avoid negative growth, or retrogression, sometime in the future! We are now back to a super-Galbraithian position, to which has been added scientific jargon about effluents, ecology, and “spaceship earth,” as well as a bitter assault on technology itself as being an evil polluter. Capitalism has brought about technology, growth – including population growth, industry, and pollution – and government is supposed to step in and eradicate these evils.
It is not at all unusual, in fact, to find the same people now holding a contradictory blend of positions 5 and 7 and maintaining at one and the same time that (a) we are living in a “post-scarcity” age where we no longer need private property, capitalism, or material incentives to production; and (b) that capitalist greed is depleting our resources and bringing about an imminent worldwide scarcity. The liberal answer to both, or indeed to all, of these problems turns out, of course, to be the same: socialism or state planning to replace free-market capitalism. The great economist Joseph Schumpeter put the whole shoddy performance of liberal intellectuals into a nutshell a generation ago: “Capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear; the only success victorious defense can possibly produce is a change in the indictment.”² And so, the charges, the indictments, may change and contradict previous charges – but the answer is always and wearily the same.
² Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Bros., 1942), p. 144.
The Attack on Technology and Growth
The fashionable attack on growth and affluence is palpably an attack by comfortable, contented upper-class liberals. Enjoying a material contentment and a living standard undreamt of by even the wealthiest men of the past, it is easy for upper-class liberals to sneer at “materialism,” and to call for a freeze on all further economic advance.³ For the mass of the world’s population still living in squalor such a cry for the cessation of growth is truly obscene; but even in the United States, there is little evidence of satiety and superabundance. Even the upper-class liberals themselves have not been conspicuous for making a bonfire of their salary checks as a contribution to their war on “materialism” and affluence.
³ Cf. the interpretation in William Tucker, “Environmentalism and the Leisure Class,” Harper’s (December 1977), pp. 49-56, 73-80.
Fortunately, black groups are beginning to understand the significance of liberal anti-growth ideology. In January 1978, the board of directors of the National Association for the Advancement of Colored People opposed President Carter’s energy program and called for the deregulation of oil and natural gas prices. Explaining the NAACP’s new position, chairman of the board Margaret Bush Wilson declared:
“We are concerned about the slow growth policy of President Carter’s energy plan. The issue is what kind of energy policy will lend itself to. . . a viable expansive economy, one that is not restrictive, because under slow growth blacks suffer more than anyone else.”
Paul Delaney, “NAACP in Major Dispute on Energy View,” New York Times (January 30, 1978).
The widespread attack on technology is even more irresponsible. If technology were to be rolled back to the “tribe” and to the preindustrial era, the result would be mass starvation and death on a universal scale. The vast majority of the world’s population is dependent for its very survival on modern technology and industry. The North American continent was able to accommodate approximately one million Indians in the days before Columbus, all living on a subsistence level. It is now able to accommodate several hundred million people, all living at an infinitely higher living standard – and the reason is modern technology and industry. Abolish the latter and we will abolish the people as well. For all one knows, to our fanatical antipopulationists this “solution” to the population question may be a good thing, but for the great majority of us, this would be a draconian “final solution” indeed.
The irresponsible attack on technology is another liberal flip-flop: it comes from the same liberal intellectuals who, thirty-odd years ago, were denouncing capitalism for not putting modern technology to full use in the service of State planning and were calling for absolute rule by a modern “technocratic” elite. Yet now the very same intellectuals who not so long ago were yearning for a technocratic dictatorship over all of our lives are now trying to deprive us of the vital fruits of technology itself.
Yet the various contradictory phases of liberal thought never completely die; and many of the same antitechnologists, in a 180-degree reversal of the automation hysteria, are also confidently forecasting technological stagnation from now on. They cheerily predict a gloomy future for mankind by assuming that technology will stagnate, and not continue to improve and accelerate. This is the technique of pseudoscientific forecasting of the widely touted antigrowth Club of Rome Report. As Passell, Roberts, and Ross write in their critique of the report, “If the telephone company were restricted to turn-of-the-century technology 20 million operators would be needed to handle today’s volume of calls. Or, as British editor Norman Macrae has observed, “an extrapolation of the trends of the 1880s would show today’s cities buried under horse manure.”4
4 D. Meadows, et al., The Limits to Growth (New York: Universe Books, 1972); P. Passell, M. Roberts, and L. Ross, “Review of The Limits to Growth,” New York Times Book Review (April 2, 1972), p. 10.
While the team’s [Club of Rome’s] model hypothesizes exponential growth for industrial and agricultural needs, it places arbitrary, nonexponential, limits on the technical progress that might accommodate these needs. . . .
The Rev. Thomas Malthus made a similar point two centuries ago without benefit of computer printouts. . . . Malthus argued that people tend to multiply exponentially, while the food supply at best increases at a constant rate. He expected that starvation and war would periodically redress the balance. . . .
But there is no particular criterion beyond myopia on which to base that speculation. Malthus was wrong; food capacity has kept up with population. While no one knows for certain, technological progress shows no sign of slowing down. The best econometric estimates suggest that it is indeed growing exponentially.5
5 Passell, Roberts, and Ross, op. cit., p. 12.
What we need is more economic growth, not less; more and better technology, and not the impossible and absurd attempt to scrap technology and return to the primitive tribe. Improved technology and greater capital investment will lead to higher living standards for all and provide greater material comforts, as well as the leisure to pursue and enjoy the “spiritual” side of life. There is precious little culture or civilization available for people who must work long hours to eke out a subsistence living. The real problem is that productive capital investment is being siphoned off by taxes, restrictions, and government contracts for unproductive and wasteful government expenditures, including military and space boondoggling. Furthermore, the precious technical resource of scientists and engineers is being ever more intensively diverted to government, instead of to “civilian” consumer production. What we need is for government to get out of the way, remove its incubus of taxation and expenditures from the economy, and allow productive and technical resources once again to devote themselves fully to increasing the well-being of the mass of consumers. We need growth, higher living standards, and a technology and capital equipment that meet consumer wants and demands; but we can only achieve these by removing the incubus of statism and allowing the energies of all the population to express themselves in the free-market economy. We need an economic and technological growth that emerges freely, as Jane Jacobs has shown, from the free-market economy, and not the distortions and wastes imposed upon the world economy from the liberal force-feeding of the 1950s. We need, in short, a truly free-market, libertarian economy.
Conservation of Resources
As we have mentioned, the selfsame liberals who claim that we have entered the “postscarcity” age and are in no further need of economic growth, are in the forefront of the complaint that “capitalist greed” is destroying our scarce natural resources. The gloom-and-doom soothsayers of the Club of Rome, for example, by simply extrapolating current trends of resource use, confidently predict the exhaustion of vital raw materials within forty years. But confident – and completely faulty – predictions of exhaustion of raw materials have been made countless times in recent centuries.
What the soothsayers have overlooked is the vital role that the free-market economic mechanism plays in conserving, and adding to, natural resources. Let us consider, for example, a typical copper mine. Why has copper ore not been exhausted long before now by the inexorable demands of our industrial civilization? Why is it that copper miners, once they have found and opened a vein of ore, do not mine all the copper immediately; why, instead, do they conserve the copper mine, add to it, and extract the copper gradually, from year to year? Because the mine owners realize that, for example, if they triple this year’s production of copper they may indeed triple this year’s income, but they will also be depleting the mine, and therefore the future income they will be able to derive from it. On the market, this loss of future income is immediately reflected in the monetary value – the price – of the mine as a whole. This monetary value, reflected in the selling price of the mine, and then of individual shares of mining stock, is based on the expected future income to be earned from the production of copper; any depletion of the mine, then, will lower the value of the mine and hence the price of the mining stock. Every mine owner, then, has to weigh the advantages of immediate income from copper production against the loss in the “capital value” of the mine as a whole, and hence against the loss in the value of his shares.
The mine owners’ decisions are determined by their expectations of future copper yields and demands, the existing and expected rates of interest, etc. Suppose, for example, that copper is expected to be rendered obsolete in a few years by a new synthetic metal. In that case, copper mine owners will rush to produce more copper now when it is more highly valued, and save less for the future when it will have little value – thereby benefiting the consumers and the economy as a whole by producing copper now when it is more intensely needed. But, on the other hand, if a copper shortage is expected in the future, mine owners will produce less now and wait to produce more later when copper prices are higher – thereby benefiting society by producing more in the future when it will be needed more intensely. Thus, we see that the market economy contains a marvelous built-in mechanism whereby the decisions of resource owners on present as against future production will benefit not only their own income and wealth, but the mass of consumers and the economy as a whole.
But there is much more to this free-market mechanism: Suppose that a growing shortage of copper is now expected in the future. The result is that more copper will be withheld now and saved for future production. The price of copper now will rise. The increase in copper prices will have several “conserving” effects. In the first place, the higher price of copper is a signal to the users of copper that it is scarcer and more expensive; the copper users will then conserve the use of this more expensive metal. They will use less copper, substituting cheaper metals or plastics; and copper will be conserved more fully and saved for those uses for which there is no satisfactory substitute. Moreover, the greater cost of copper will stimulate (a) a rush to find new copper ores; and (b) a search for less expensive substitutes, perhaps by new technological discoveries. Higher prices for copper will also stimulate campaigns for saving and recycling the metal. The price mechanism of the free market is precisely the reason that copper, and other natural resources, have not disappeared long ago. As Passell, Roberts, and Ross say in their critique of the Club of Rome:
Natural resource reserves and needs in the model are calculated [in]. . . the absence of prices as a variable in the “Limits” projection of how resources will be used. In the real world, rising prices act as an economic signal to conserve scarce resources, providing incentives to use cheaper materials in their place, stimulating research efforts on new ways to save on resource inputs, and making renewed exploration attempts more profitable.6
6 Passell, Roberts, and Ross, op. cit., p. 12.
In fact, in contrast to the gloom-and-doomers, raw material and natural resource prices have remained low, and have generally declined relative to other prices. To liberal and Marxist intellectuals, this is usually a sign of capitalist “exploitation” of the underdeveloped countries which are often the producers of the raw materials. But it is a sign of something completely different, of the fact that natural resources have not been growing scarcer but more abundant; hence their relatively lower cost. The development of cheap substitutes, e.g., plastics, synthetic fibres, has kept natural resources cheap and abundant. And in a few decades we can expect that modern technology will develop a remarkably cheap source of energy – nuclear fusion – a development which will automatically yield a great abundance of raw materials for the work that will be needed.
The development of synthetic materials and of cheaper energy highlights a vital aspect of modern technology the doom-sayers overlook: that technology and industrial production create resources which had never existed as effective resources. For example, before the development of the kerosene lamp and especially the automobile, petroleum was not a resource but an unwanted waste, a giant black “weed.” It was only the development of modern industry that converted petroleum into a useful resource. Furthermore, modern technology, through improved geological techniques and through the incentives of the market, has been finding new petroleum reserves at a rapid rate.
Predictions of imminent exhaustion of resources, as we have noted, are nothing new. In 1908, President Theodore Roosevelt, calling a Governors’ Conference on natural resources, warned of their “imminent exhaustion.” At the same conference, steel industrialist Andrew Carnegie predicted the exhaustion of the Lake Superior iron range by 1940, while railroad magnate James J. Hill forecast the exhaustion of much of our timber resources in ten years. Not only that: Hill even predicted an imminent shortage of wheat production in the United States, in a country where we are still grappling with the wheat surpluses generated by our farm subsidy program. Current forecasts of doom are made on the same basis: a grievous underweighting of the prospects of modern technology and an ignorance of the workings of the market economy.7
7 On these mistaken forecasts, see Thomas B. Noln, “The Inexhaustible Resource of Technology,” in H. Jarrett, ed., Perspectives on Conservation (Baltimore: Johns Hopkins Press, 1958), pp. 49-66.
It is true that several particular natural resources have suffered, in the past and now, from depletion. But in each case the reason has not been “capitalist greed”; on the contrary, the reason has been the failure of government to allow private property in the resource – in short, a failure to pursue the logic of private property far enough.
One example has been timber resources. In the American West and in Canada, most of the forests are owned, not by private owners but by the federal (or provincial) government. The government then leases their use to private timber companies. In short, private property is permitted only in the annual use of the resource, but not in the forest, the resource, itself. In this situation, the private timber company does not own the capital value, and therefore does not have to worry about depletion of the resource itself. The timber company has no economic incentive to conserve the resource, replant trees, etc. Its only incentive is to cut as many trees as quickly as possible, since there is no economic value to the timber company in maintaining the capital value of the forest. In Europe, where private ownership of forests is far more common, there is little complaint of destruction of timber resources. For wherever private property is allowed in the forest itself, it is to the benefit of the owner to preserve and restore tree growth while he is cutting timber, so as to avoid depletion of the forest’s capital value.8
8 On timber, and on conservation generally, see Anthony Scott, Natural Resources: The Economics of Conservation (Toronto: University of Toronto Press, 1955), pp. 121-25 and passim.
On ways in which the federal government itself has been destroying rather than conserving timber resources, from highway building to the indiscriminate dams and other projects of the Army Corps of Engineers, see Edwin G. Dolan, TANSTAAFL (New York: Holt, Rinehart & Winston, 1971), p. 96.
Thus, in the United States, a major culprit has been the Forest Service of the U.S. Department of Agriculture, which owns forests and leases annual rights to cut timber, with resulting devastation of the trees. In contrast, private forests such as those owned by large lumber firms like Georgia-Pacific and U.S. Plywood scientifically cut and reforest their trees in order to maintain their future supply.9
9 See Robert Poole, Jr., “Reason and Ecology,” in D. James, ed., Outside, Looking In (New York: Harper & Row, 1972), pp. 250-51.
Another unhappy consequence of the American government’s failure to allow private property in a resource was the destruction of the Western grasslands in the late nineteenth century. Every viewer of “Western” movies is familiar with the mystique of the “open range” and the often violent “wars” among cattlemen, sheepmen, and farmers over parcels of ranch land. The “open range” was the failure of the federal government to apply the policy of homesteading to the changed conditions of the drier climate west of the Mississippi. In the East, the 160 acres granted free to homesteading farmers on government land constituted a viable technological unit for farming in a wetter climate. But in the dry climate of the West, no successful cattle or sheep ranch could be organized on a mere 160 acres. But the federal government refused to expand the 160-acre unit to allow the “homesteading” of larger cattle ranches. Hence, the “open range,” on which private cattle and sheep owners were able to roam unchecked on government-owned pasture land. But this meant that no one owned the pasture, the land itself; it was therefore to the economic advantage of every cattle or sheep owner to graze the land and use up the grass as quickly as possible, otherwise the grass would be grazed by some other sheep or cattle owner. The result of this tragically shortsighted refusal to allow private property in grazing land itself was an overgrazing of the land, the ruining of the grassland by grazing too early in the season, and the failure of anyone to restore or replant the grass – anyone who bothered to restore the grass would have had to look on helplessly while someone else grazed his cattle or sheep. Hence the overgrazing of the West, and the onset of the “dust bowl.” Hence also the illegal attempts by numerous cattlemen, farmers, and sheepmen to take the law into their own hands and fence off the land into private property – and the range wars that often followed.
Professor Samuel P. Hays, in his authoritative account of the conservation movement in America, writes of the range problem:
Much of the Western livestock industry depended for its forage upon the “open” range, owned by the federal government, but free for anyone to use. . . . Congress had never provided legislation regulating grazing or permitting stockmen to acquire range lands. Cattle and sheepmen roamed the public domain. . . . Cattlemen fenced range for their exclusive use, but competitors cut the wire. Resorting to force and violence, sheepherders and cowboys “solved” their disputes over grazing lands by slaughtering rival livestock and murdering rival stockmen. . . . Absence of the most elementary institutions of property law created confusion, bitterness, and destruction.
Amid this turmoil the public range rapidly deteriorated. Originally plentiful and lush, the forage supply was subjected to intense pressure by the increasing use. . . . The public domain became stocked with more animals than the range could support. Since each stockman feared that others would beat him to the available forage, he grazed early in the year and did not permit the young grass to mature and reseed. Under such conditions the quality and quantity of available forage rapidly decreased; vigorous perennials gave way to annuals and annuals to weeds.10
10 Samuel P. Hays, Conservation and the Gospel of Efficiency (Cambridge: Harvard University Press, 1959), pp. 50-51. See also E. Louise Peffer, The Closing of the Public Domain (Stanford: Standord University Press, 1951), pp. 22-31, and passim.
Hays concludes that public-domain range lands may have been depleted by over two-thirds by this process, as compared to their virgin condition.
There is a vitally important area in which the absence of private property in the resource has been and is causing, not only depletion of resources, but also a complete failure to develop vast potential resources. This is the potentially enormously productive ocean resource. The oceans are in the international public domain, i.e., no person, company, or even national government is allowed property rights in parts of the ocean. As a result, the oceans have remained in the same primitive state as was the land in the precivilized days before the development of agriculture. The way of production for primitive man was “hunting-and-gathering”: the hunting of wild animals and the gathering of fruits, berries, nuts, and wild seeds and vegetables. Primitive man worked passively within his environment instead of acting to transform it; hence he just lived off the land without attempting to remould it. As a result, the land was unproductive, and only a relatively few tribesmen could exist at a bare subsistence level. It was only with the development of agriculture, the farming of the soil, and the transformation of the land through farming that productivity and living standards could take giant leaps forward. And it was only with agriculture that civilization could begin. But to permit the development of agriculture there had to be private property rights, first in the fields and crops, and then in the land itself.
With respect to the ocean, however, we are still in the primitive, unproductive hunting and gathering stage. Anyone can capture fish in the ocean, or extract its resources, but only on the run, only as hunters and gatherers. No one can farm the ocean, no one can engage in aquaculture. In this way we are deprived of the use of the immense fish and mineral resources of the seas. For example, if anyone tried to farm the sea and to increase the productivity of the fisheries by fertilizers, he would immediately be deprived of the fruits of his efforts because he could not keep other fishermen from rushing in and seizing his fish. And so no one tries to fertilize the oceans as the land is fertilized. Furthermore, there is no economic incentive – in fact, there is every disincentive – for anyone to engage in technological research in the ways and means of improving the productivity of the fisheries, or in extracting the mineral resources of the oceans. There will only be such incentive when property rights in parts of the ocean are as fully allowed as property rights in the land. Even now there is a simple but effective technique that could be used for increasing fish productivity: parts of the ocean could be fenced off electronically, and through this readily available electronic fencing, fish could be segregated by size. By preventing big fish from eating smaller fish, the production of fish could be increased enormously. And if private property in parts of the ocean were permitted, a vast flowering of aquaculture would create and multiply ocean resources in numerous ways we cannot now even foresee.
National governments have tried vainly to cope with the problem of fish depletion by placing irrational and uneconomic restrictions on the total size of the catch, or on the length of the allowable season. In the cases of salmon, tuna, and halibut, technological methods of fishing have thereby been kept primitive and unproductive by unduly shortening the season and injuring the quality of the catch and by stimulating overproduction – and underuse during the year – of the fishing fleets. And of course such government restrictions do nothing at all to stimulate the growth of aquaculture. As Professors North and Miller write:
Fishermen are poor because they are forced to use inefficient equipment and to fish only a small fraction of the time [by the government regulations] and of course there are far too many of them. The consumer pays a much higher price for red salmon than would be necessary if efficient methods were used. Despite the ever-growing intertwining bonds of regulations, the preservation of the salmon run is still not assured.
The root of the problem lies in the current non-ownership arrangement. It is not in the interests of any individual fisherman to concern himself with the perpetuation of the salmon run. Quite the contrary: It is rather in his interests to catch as many fish as he can during the season.11
11 Douglass C. North and Roger LeRoy Miller, The Economics of Public Issues (New York: Harper & Row, 1971), p. 107.
In contrast, North and Miller point out that private property rights in the ocean, under which the owner would use the least costly and most efficient technology and preserve and make productive the resource itself, is now more feasible than ever: “The invention of modern electronic sensing equipment has now made the policing of large bodies of water relatively cheap and easy.”12
12 Ibid., p. 108. Also see James A. Crutchfield and Giulio Pontecorvo, The Pacific Salmon Fisheries: A Study of Irrational Conservation (Baltimore: Johns Hopkins Press, 1969). On a similar situation in the tuna industry, see Francis T. Christy, Jr., “New Dimensions for Transnational Marine Resources,” American Economic Review, Papers and Proceedings (May 1970), p. 112; and on the Pacific halibut industry, see James A. Crutchfield and Arnold Zellner, Economic Aspects of the Pacific halibut Industry (Washington, D.C.: U.S. Dept. of the Interior, 1961). For an imaginative proposal for private property its parts of the ocean even before the advent of electronic fencing, see Gordon Tullock, The Fisheries – Some Radical Proposals (Columbia, S.C.: University of South Carolina Bureau of Business and Economic Research, 1962).
The growing international conflicts over parts of the ocean only further highlight the importance of private property rights in this vital area. For as the United States and other nations assert their sovereignty 200 miles from their shores, and as private companies and governments squabble over areas of the ocean; and as trawlers, fishing nets, oil drillers, and mineral diggers war over the same areas of the ocean – property rights become increasingly and patently more important. As Francis Christy writes:
… coal is mined in shafts below the sea floor, oil is drilled from platforms fixed to the bottom rising above the water, minerals can be dredged from the surface of the ocean bed. . . sedentary animals are scraped from the bed on which telephone cables may lie, bottom feeding animals are caught in traps or trawls, mid-water species may be taken by hook and line or by trawls which occasionally interfere with submarines, surface species are taken by net and harpoon, and the surface itself is used for shipping as well as the vessels engaged in extracting resources.13
13 Christy, loc. cit., p. 112.
This growing conflict leads Christy to predict that “the seas are in a stage of transition. They are moving from a condition in which property rights are almost nonexistent to a condition in which property rights of some form will become appropriated or made available.” Eventually, concludes Christy, “as the sea’s resources become more valuable, exclusive rights will be acquired.”14
14 Ibid., pp. 112-113. For a definitive discussion, economic, technological, and legal, of the entire problem of the ocean and ocean fisheries, see Francis I. Christy, Jr., and Anthony Scott, The Common Wealth in Ocean Fisheries (Baltimore: Johns Hopkins Press, 1965).
All right: Even if we concede that full private property in resources and the free market will conserve and create resources, and do it far better than government regulation, what of the problem of pollution? Wouldn’t we be suffering aggravated pollution from unchecked “capitalist greed”?
There is, first of all, this stark empirical fact: Government ownership, even socialism, has proved to be no solution to the problem of pollution. Even the most starry-eyed proponents of government planning concede that the poisoning of Lake Baikal in the Soviet Union is a monument to heedless industrial pollution of a valuable natural resource. But there is far more to the problem than that. Note, for example, the two crucial areas in which pollution has become an important problem: the air and the waterways, particularly the rivers. But these are precisely two of the vital areas in society in which private property has not been permitted to function.
First, the rivers. The rivers, and the oceans too, are generally owned by the government; private property, certainly complete private property, has not been permitted in the water. In essence, then, government owns the rivers. But government ownership is not true ownership, because the government officials, while able to control the resource cannot themselves reap their capital value on the market. Government officials cannot sell the rivers or sell stock in them. Hence, they have no economic incentive to preserve the purity and values of the rivers. Rivers are, then, in the economic sense, “unowned”; therefore government officials have permitted their corruption and pollution. Anyone has been able to dump polluting garbage and wastes in the waters. But consider what would happen if private firms were able to own the rivers and the lakes. If a private firm owned Lake Erie, for example, then anyone dumping garbage in the lake would be promptly sued in the courts for their aggression against private property and would be forced by the courts to pay damages and to cease and desist from any further aggression. Thus, only private property rights will insure an end to pollution-invasion of resources. Only because the rivers are unowned is there no owner to rise up and defend his precious resource from attack. If, in contrast, anyone should dump garbage or pollutants into a lake which is privately owned (as are many smaller lakes), he would not be permitted to do so for very long – the owner would come roaring to its defense.15 Professor Dolan writes:
With a General Motors owning the Mississippi River, you can be sure that stiff effluent charges would be assessed on industries and municipalities along its banks, and that the water would be kept clean enough to maximize revenues from leases granted to firms seeking rights to drinking water, recreation, and commercial fishing.16
15 Existing “appropriation” law in the Western states already provides the basis for full “homesteading” private property rights in the rivers. For a full discussion, see Jack Hirshleifer, James C. DeHaven, and Jerome W. Milliman, Water Supply; Economics, Technology, and Policy (Chicago: University of Chicago Press, 1960), Chapter IX.
16 Edwin G. Dolan, “Capitalism and the Environment,” Individualist (March 1971), p. 3.
If government as owner has allowed the pollution of the rivers, government has also been the single major active polluter, especially in its role as municipal sewage disposer. There already exist low-cost chemical toilets which can burn off sewage without polluting air, ground, or water; but who will invest in chemical toilets when local governments will dispose of sewage free to their customers?
This example points up a problem similar to the case of the stunting of aquaculture technology by the absence of private property: if governments as owners of the rivers permit pollution of the water, then industrial technology will – and has – become a water-polluting technology. If production processes are allowed to pollute the rivers unchecked by their owners, then that is the sort of production technology we will have.
If the problem of water pollution can be cured by private property rights in water, how about air pollution? How can libertarians possibly come up with a solution for this grievous problem? Surely, there can’t be private property in the air? But the answer is: yes, there can. We have already seen how radio and TV frequencies can be privately owned. So could channels for airlines. Commercial airline routes, for example, could be privately owned; there is no need for a Civil Aeronautics Board to parcel out – and restrict – routes between various cities. But in the case of air pollution we are dealing not so much with private property in the air as with protecting private property in one’s lungs, fields, and orchards. The vital fact about air pollution is that the polluter sends unwanted and unbidden pollutants – from smoke to nuclear radiation to sulfur oxides – through the air and into the lungs of innocent victims, as well as onto their material property. All such emanations which injure person or property constitute aggression against the private property of the victims. Air pollution, after all, is just as much aggression as committing arson against another’s property or injuring him physically. Air pollution that injures others is aggression pure and simple. The major function of government – of course and police – is to stop aggression; instead, the government has failed in this task and has failed grievously to exercise its defense function against air pollution.
It is important to realize that this failure has not been a question purely of ignorance, a simple time lag between recognizing a new technological problem and facing up to it. For if some of the modern pollutants have only recently become known, factory smoke and many of its bad effects have been known ever since the Industrial Revolution, known to the extent that the American courts, during the late – and as far back as the early – nineteenth century made the deliberate decision to allow property rights to be violated by industrial smoke. To do so, the courts had to – and did – systematically change and weaken the defenses of property right embedded in Anglo-Saxon common law. Before the mid and late nineteenth century, any injurious air pollution was considered a tort, a nuisance against which the victim could sue for damages and against which he could take out an injunction to cease and desist from any further invasion of his property rights. But during the nineteenth century, the courts systematically altered the law of negligence and the law of nuisance to permit any air pollution which was not unusually greater than any similar manufacturing firm, one that was not more extensive than the customary practice of fellow polluters.
As factories began to arise and emit smoke, blighting the orchards of neighboring farmers, the farmers would take the manufacturers to court, asking for damages and injunctions against further invasion of their property. But the judges said, in effect, “Sorry. We know that industrial smoke (i.e., air pollution) invades and interferes with your property rights. But there is something more important than mere property rights: and that is public policy, the ‘common good.’ And the common good decrees that industry is a good thing, industrial progress is a good thing, and therefore your mere private property rights must be overridden on behalf of the general welfare.” And now all of us are paying the bitter price for this overriding of private property, in the form of lung disease and countless other ailments. And all for the “common good”!17
17 See E. F. Roberts, “Plead the Ninth Amendment!” Natural history (August-September 1970), pp. 18ff. For a definitive history and analysis of the change in the legal system toward growth and property rights in the first half of the nineteenth century, see Morton J. Horwitz, The Transformation of American Law, 1780-1860 (Cambridge: Harvard University Press, 1977).
That this principle has guided the courts during the air age as well may be seen by a decision of the Ohio courts in Antonik v. Chamberlain (1947). The residents of a suburban area near Akron sued to enjoin the defendants from operating a privately owned airport. The grounds were invasion of property rights through excessive noise. Refusing the injunction, the court declared:
In our business of judging in this case, while sitting as a court of equity, we must not only weigh the conflict of interests between the airport owner and the nearby landowners, but we must further recognize the public policy of the generation in which we live. We must recognize that the establishment of an airport. . . is of great concern to the public, and if such and airport is abated, or its establishment prevented, the consequences will be not only a serious injury to the owner of the port property but may be a serious loss of a valuable asset to the entire community.18
18 Quoted in Milton Katz, The Function of Tort Liability in Technology Assessment (Cambridge: Harvard University Program on Technology and Society, 1969), p. 610.
To cap the crimes of the judges, legislatures, federal and state, moved in to cement the aggression by prohibiting victims of air pollution from engaging in “class action” suits against polluters. Obviously, if a factory pollutes the atmosphere of a city where there are tens of thousands of victims, it is impractical for each victim to sue to collect his particular damages from the polluter (although an injunction could be used effectively by one small victim). The common law, therefore, recognizes the validity of “class action” suits, in which one or a few victims can sue the aggressor not only on their own behalf, but on behalf of the entire class of similar victims. But the legislatures systematically outlawed such class action suits in pollution cases. For this reason, a victim may successfully sue a polluter who injures him individually, in a one-to-one “private nuisance” suit. But he is prohibited by law from acting against a mass polluter who is injuring a large number of people in a given area! As Frank Bubb writes, “It is as if the government were to tell you that it will (attempt to) protect you from a thief who steals only from you, but it will not protect you if the thief also steals from everyone else in the neighborhood. . .”19
19 Frank Bubb, “The Cure for Air Pollution,” The Libertarian Forum (April 15, 1970)
1. Also see Dolan, TANSTAAFL, pp. 37-39.
Noise, too, is a form of air pollution. Noise is the creation of sound waves which go through the air and then bombard and invade the property and persons of others. Only recently have physicians begun to investigate the damaging effects of noise on the human physiology. Again, a libertarian legal system would permit damage and class action suits and injunctions against excessive and damaging noise: against “noise pollution.”
The remedy against air pollution is therefore crystal clear, and it has nothing to do with multibillion-dollar palliative government programs at the expense of the taxpayers which do not even meet the real issue. The remedy is simply for the courts to return to their function of defending person and property rights against invasion, and therefore to enjoin anyone from injecting pollutants into the air. But what of the propollution defenders of industrial progress? And what of the increased costs that would have to be borne by the consumer? And what of our present polluting technology?
The argument that such an injunctive prohibition against pollution would add to the costs of industrial production is as reprehensible as the pre-Civil War argument that the abolition of slavery would add to the costs of growing cotton, and that therefore abolition, however morally correct, was “impractical.” For this means that the polluters are able to impose all of the high costs of pollution upon those whose lungs and property rights they have been allowed to invade with impunity.
Furthermore, the cost and technology argument overlooks the vital fact that if air pollution is allowed to proceed with impunity, there continues to be no economic incentive to develop a technology that will not pollute. On the contrary, the incentive would continue to cut, as it has for a century, precisely the other way. Suppose, for example, that in the days when automobiles and trucks were first being used, the courts had ruled as follows: “Ordinarily, we would be opposed to trucks invading people’s lawns as an invasion of private property, and we would insist that trucks confine themselves to the roads, regardless of traffic ingestion. But trucks are vitally important to the public welfare, and therefore we decree that trucks should be allowed to cross any lawns they wish provided they believe that this would ease their traffic problems.” If the courts had ruled in this way, then we would now have a transportation system in which lawns would be systematically desecrated by trucks. And any attempt to stop this would be decried in the name of modern transportation needs! The point is that this is precisely the way that the courts ruled on air pollution – pollution which is far more damaging to all of us than trampling on lawns. In this way, the government gave the green light, from the very start, to a polluting technology. It is no wonder then that this is precisely the kind of technology we have. The only remedy is to force the polluting invaders to stop their invasion, and thereby to redirect technology into nonpolluting or even antipolluting channels.
Already, even at our necessarily primitive stage in antipollution technology, techniques have been developed to combat air and noise pollution. Mufflers can be installed on noisy machines that emit sound waves precisely contra-cyclical to the waves of the machines, and thereby can cancel out these racking sounds. Air wastes can even now be recaptured as they leave the chimney and be recycled to yield products useful to industry. Thus, sulfur dioxide, a major noxious air pollutant, can be captured and recycled to produce economically valuable sulfuric acid.20 The highly polluting spark ignition engine will either have to be “cured” by new devices or replaced altogether by such nonpolluting engines as diesel, gas turbine, or steam, or by an electric car. And, as libertarian systems engineer Robert Poole, Jr., points out, the costs of installing the non- or antipolluting technology would then “ultimately be borne by the consumers of the firms’ products, i.e., by those who choose to associate with the firm, rather than being passed on to innocent third parties in the form of pollution (or as taxes).”21
20 See Jane Jacobs, The Economy of Cities (New York: Random House, 1969), pp. 109ff.
21 Poole, op. cit., pp. 251-52.
Robert Poole cogently defines pollution “as the transfer of harmful matter or energy to the person or property of another, without the latter’s consent.”22 The libertarian – and the only complete – solution to the problem of air pollution is to use the courts and the legal structure to combat and prevent such invasion. There are recent signs that the legal system is beginning to change in this direction: new judicial decisions and repeal of laws disallowing class action suits. But this is only a beginning.23
22 Poole, op. cit., p. 245.
23 Thus, see Dolan, TANSTAAFL, p. 39, and Katz, passim.
Among conservatives – in contrast to libertarians – there are two ultimately similar responses to the problem of air pollution. One response, by Ayn Rand and Robert Moses among others, is to deny that the problem exists, and to attribute the entire agitation to leftists who want to destroy capitalism and technology on behalf of a tribal form of socialism. While part of this charge may be correct, denial of the very existence of the problem is to deny science itself and to give a vital hostage to the leftist charge that defenders of capitalism “place property rights above human rights.” Moreover, a defense of air pollution does not even defend property rights; on the contrary, it puts these conservatives’ stamp of approval on those industrialists who are trampling upon the property rights of the mass of the citizenry.
A second, and more sophisticated, conservative response is by such free-market economists as Milton Friedman. The Friedmanites concede the existence of air pollution but propose to meet it, not by a defense of property rights, but rather by a supposedly utilitarian “cost-benefit” calculation by government, which will then make and enforce a “social decision” on how much pollution to allow. This decision would then be enforced either by licensing a given amount of pollution (the granting of “pollution rights”), by a graded scale of taxes against it, or by the taxpayers paying firms not to pollute. Not only would these proposals grant an enormous amount of bureaucratic power to government in the name of safeguarding the “free market”; they would continue to override property rights in the name of a collective decision enforced by the State. This is far from any genuine “free market,” and reveals that, as in many other economic areas, it is impossible to really defend freedom and the free market without insisting on defending the rights of private property. Friedman’s grotesque dictum that those urban inhabitants who don’t wish to contract emphysema should move to the country is starkly reminiscent of Marie Antoinette’s famous “Let them eat cake” – and reveals a lack of sensitivity to human or property rights. Friedman’s statement, in fact, is of a piece with the typically conservative, “If you don’t like it here, leave,” a statement that implies that the government rightly owns the entire land area of “here,” and that anyone who objects to its rule must therefore leave the area. Robert Poole’s libertarian critique of the Friedmanite proposals offers a refreshing contrast:
Unfortunately, it is an example of the most serious failing of the conservative economists: nowhere in the proposal is there any mention of rights. This is the same failing that has undercut advocates of capitalism for 200 years. Even today, the term “laissez-faire” is apt to bring forth images of eighteenth century English factory towns engulfed in smoke and grimy with soot. The early capitalists agreed with the courts that smoke and soot were the “price” that must be paid for the benefits of industry. . . . Yet laissez-faire without rights is a contradiction in terms; the laissez–faire position is based on and derived from man’s rights, and can endure only when rights are held inviolable. Now, in an age of increasing awareness of the environment, this old contradiction is coming back to haunt capitalism.
It is true that air is a scare resource [as the Friedmanites say], but one must then ask why it is scarce. If it is scarce because of a systematic violation of rights, then the solution is not to raise the price of the status quo, thereby sanctioning the rights-violations, but to assert the rights and demand that they be protected. . . . When a factory discharges a great quantity of sulfur dioxide molecules that enter someone’s lungs and cause pulmonary edema, the factory owners have aggressed against him as much as if they had broken his leg. The point must be emphasized because it is vital to the libertarian laissez-faire position. A laissez-faire polluter is a contradiction in terms and must be identified as such. A libertarian society would be a full-liability society, where everyone is fully responsible for his actions and any harmful consequences they might cause.24
24 Poole, op. cit., pp. 252-53. Friedman’s dictum can be found in Peter Maiken, “Hysterics Won’t Clean Up Pollution,” Human Events (April 25, 1970), pp. 13, 21-23. A fuller representation of the Friedmanite position may be found in Thomas D. Crocker and A. J. Rogers III, Environmental Economics (Hinsdale, Ill. : Dryden Press, 1971); and similar views may be found in J. H. Dales, Pollution, Property, and Prices (Toronto: University of Toronto Press, 1968), and Larry E. Ruff, “The Economic Common Sense of Pollution,” Public Interest (Spring, 1970), pp. 69-85.
In addition to betraying its presumed function of defending private property, government has contributed to air pollution in a more positive sense. It was not so long ago that the Department of Agriculture conducted mass sprayings of DDT by helicopter over large areas, overriding the wishes of individual objecting farmers. It still continues to pour tons of poisonous and carcinogenic insecticides all over the South in an expensive and vain attempt to eradicate the fire ant.25 And the Atomic Energy Commission has poured radioactive wastes into the air and into the ground by means of its nuclear power plants, and through atomic testing. Municipal power and water plants, and the plants of licensed monopoly utility companies, mightily pollute the atmosphere. One of the major tasks of the State in this area is therefore to stop its own poisoning of the atmosphere.
25 Glenn Garvin, “Killing Fire Ants With Carcinogens,” Inquiry (February 6, 1978), pp. 7-8.
Thus, when we peel away the confusions and the unsound philosophy of the modern ecologists, we find an important bedrock case against the existing system; but the case turns out to be not against capitalism, private property, growth, or technology per se. It is a case against the failure of government to allow and to defend the rights of private property against invasion. If property rights were to be defended fully, against private and governmental invasion alike, we would find here, as in other areas of our economy and society, that private enterprise and modern technology would come to mankind not as a curse but as its salvation.
More Murray Rothbard.
Even more Murray Rothbard.