Laissez-faire environmentalism

By Hal Canary, 2010-02-20 09:46:16 (link)
#economics;#politics

Every so often, I meet someone who claims to be a libertarian. When I was young and stupid, I held these same beliefs; so I have to suppress the urge to educate them. Instead, I'll rant on my blog.

The following is from the Libertarian Party's platform

We support a clean and healthy environment and sensible use of our natural resources. Private landowners and conservation groups have a vested interest in maintaining natural resources. Pollution and misuse of resources cause damage to our ecosystem. Governments, unlike private businesses, are unaccountable for such damage done to our environment and have a terrible track record when it comes to environmental protection. Protecting the environment requires a clear definition and enforcement of individual rights in resources like land, water, air, and wildlife. Free markets and property rights stimulate the technological innovations and behavioral changes required to protect our environment and ecosystems. We realize that our planet's climate is constantly changing, but environmental advocates and social pressure are the most effective means of changing public behavior.

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That's crazy. To begin with, it goes against every bit of real-world evidence on the subject. Here's why. If you own a business, it makes sense to organize it as a limited liability company; this shields your family's assets from the liabilities of the business. You can also grow the business faster by selling shares. Suddenly, you have a corporation and officers of the corporation have a single duty: to make as much money as possible for the shareholders by any legal means. In the absence of environmental laws and regulations, that will often mean lots of pollution. To protect itself from lawsuits, the corporation can create a second corporation to do the actual polluting. That second corporation will have very few assets. If it gets sued by those hurt by the pollution, it can go bankrupt, leaving the shareholders of the first corporation reaping the profits, shielded by limited liability.

Strong property rights are no substitute for regulations, unless you want to eliminate the corporation.


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