I don’t think that the Mises-publications on environmentalism can withstand expert attacks. I now give you the unique opportunity to train fending of environmentalists by fending of me (I am a rather mediocre environmentalist so this is a good starting point).
Imagine the following problem:
Someone has installed a fish farm in a river. If he was the first to engage in this activity he now has homesteaded the right to operate this farm there.
Later on a nuclear power plant, a paper factory, and two chemical plants install themselves in some distance but alongside the same river. On the sides of the river farms are already in operation (predating the fish-farm).
The nuclear power plant rises the overall temperature of the river by discharging hot water from it’s cooling system.
The paper factory reduces the oxygen content of the river by discharging organic pollutants.
Run-off fertilizers from the farmer’s fields also decrease the oxygen by leading to rapid algae growth.
Sewage from the two chemical plants introduces one new chemical per power pant.
Suddenly all the fishes in the fish farm die. Who is going to pay the fish farmer?
Unluckily all the fishes are infected with a virus, so this looks like a natural accident. However although this virus was previously known to kill fish it never killed 100% of them.
If the fish was already weekend by other environmental stresses it might not be in a shape to fend of an infection. The oxygen level in the river is extremely low which can be attributable to activity 2 and 3 causing a process called eutrophication. However eutrophication is not a linear process: Up to a certain level there will be little change to the water body. Indeed it is unclear if the oxygen level would ever have dropped significantly without the extra heat discharged by the power plant (heat speeds up the chemical reactions leading to eutrophication). The two chemical plants might also be suspicious: Non of each chemical itself will harm the fish but in combination they can (this is called “synergist effect” and is similar to “don’t take this drug while you are taking that drug”).
You might now reconstruct who has started what activity first but this misses the point of quantity: All this different activity could have probably existed happily alongside each other if the overall discharge of pollutants where just a bit lower. It will be very difficult to find out who contributed what quantity at what point of time.
Judging who is to pay what damage to the fish farmer will hence be highly arbitrary, even if you have infinite time and resources to compose a model of what was going on (this is not meant as a discussion of bounded rationality). The described uncertainty derives from our inability to measure the initial or actual state the system is in with exactitude - see complex system theory.
If all environmental resources are property of somebody (avoidance of the tragedy of commons) there would ensue a high demand for “expert judgments” to solve such conflicts. This will be an inroad to some kind of technocracy. By the way: They same thing will happen if some government tries to impose Pigou-taxes (taxes based on negative externalities). You either get technocracy - or - if the pigou-taxes are determined by voters, total arbitrariness.
Or you could use the Coase theorem to say that the initial distribution of property rights doesn’t affect how resources are managed. So if the fisherman can pay any one of the actors to stop doing what they’re doing and still make a profit, he’ll do it.
Regardless, any theory of rights breaks down under scrutiny. What if A’s right X conflicts with B’s right X? Siamese twins?! Self ownership out the window!
The point of rights and laws is to be able to handle normal situations. When you run into wierd cases, you just do the best you can. We’re libertarians because statism fails even very simple, day to day tests, while property rights are good at handling most issues.
And even if we don’t have any clear way to resolve dilemmas like the one above, we still know something is wrong BECAUSE we have a theory of rights. Figuring out something is wrong is the first step to solving it.
Suddenly all the fishes in the fish farm die. Who is going to pay the fish farmer?
Did the fish farmer allow them the right to alter the river by not asserting his right to water of a certain quality (assuming that right can be claimed)? Can he simply allow the river to be altered over a period of time and then all of a sudden (because a certain point is reached) demand that the water be reverted to a certain purity to satisfy his needs.
It seems to me he would have to assert his right to the water quality all along. The responsibility lies on him to claim his rights before they reach this point of killing his fish. I beleive it would be hard to say that you have a right to pristine water after fifty years of changes in the river and then demand that everyone upstream stop all activity. If you dont claim the right from day one then then you dont have that right, you couldnt claim it retroactively.
So to answer your question… If the fish farm never claimed the right to a certain temprature water, certain levels of chemicals, etc. then he never had the right to it. If he did claim the right to it at the start, it would be up to him to enforce his claim against any and all upstream who infringe on that right.
Or you could use the Coase theorem to say that the initial distribution of property rights doesn’t affect how resources are managed. So if the fisherman can pay any one of the actors to stop doing what they’re doing and still make a profit, he’ll do it.
sieben, this is a gross misapplication of coase’s theorem. in fact you are forgetting the most essential piece of the theorem–the initial distribution of property rights is only irrelevant when transaction costs are low.
if transaction costs are high, the fisherman cannot contract with the other actors to internalize an externality. therefore, the initial distribution of property rights will matter.
i recommend reading the first 4 chapters of david friedman’s “law’s order” for a basic introduction to the coase theorem and not only how it applies to environmental issues, but how it relates to contract and tort law as a whole.
“How would things be any better (i.e. less arbitrary and/or complex) under a state, let alone a socialistic state?”
I have exactly the same problem. Normal people have strange ways of assessing risks let alone environmental risks. For example they are very afraid of nuclear power plants but happily board their car when they are hopelessly drunk. If you compare statistics of how many people have been actually killed by these two different types of machines this doesn’t seem quite rational. What I am afraid of is voters using this kind of “gut feelings” to ask for a certain environmental regulation or for quick fixes for conflicts like the one described.
All I don’t like is people who present free markets as a panacea to everything. The tragedy of the commons might not be stoppable by free markets either.
Oh please. I know all about that. Its simply overstated for these kinds of micro problems. If you have thousands of actors and no telephones, fine. If there are 5 people contributing to the problem and you only need to stop 1, you can probably talk to one of them.
Yeah don’t try to school me on the basics. You’ve run away from practically every argument we’ve ever had, mostly over business cycle theory. As far as I’m concerned you’re just trolling me.
It depends on how you define “rational”. You understand the Austrian Economics definition of “rational”, right? Basically, to be “rational” allows for making mistakes.
The absence of the state would presumably mean the absence of voting, so you wouldn’t have to worry about voters and their “gut feelings”.
Oh please. I know all about that. Its simply overstated for these kinds of micro problems. If you have thousands of actors and no telephones, fine. If there are 5 people contributing to the problem and you only need to stop 1, you can probably talk to one of them.
so your argument is that you don’t believe these costs are high in an example that is itself hypothethical?? shrug whatever, i guess.
at the very least it seems like you would at least want to state that assumption explicitly. after all, even in this hypothetical example it isn’t obvious to me that contracting with some of these actions (like a frickin’ nuclear power plant) would be nearly costless. do you honestly think that you would only need a telephone? what about lawyers for drawing up the contract itself? is their time free? even if we ignored those other considerations, i’m not totally convinced a telephone implies nearly costless transaction costs. it took me almost 3 hours spread over 1 week just to find the right person at timewarnercable to sort out a simple problem with my cable bill…and i wasn’t trying to get them to change the way they do business like this fisherman would be.
but who knows, maybe it is a mom and pop nuclear power plant so you wouldn’t have to worry about that (just a handshake in the shadow of the cooling tower is all you would need to seal the deal). everything is possible in in a hypothetical example, i guess. still it seems strange you would fail to mention such an essential assumption.
Yeah don’t try to school me on the basics. You’ve run away from practically every argument we’ve ever had, mostly over business cycle theory. As far as I’m concerned you’re just trolling me.
i don’t remember having any major arguments with you except once about the plausability of private defense firms (def don’t remember any business cycle discussions). shrug but that seems to be the popular meme at the moment. “i don’t like what you’re saying…so you’re trolling me”. talk about victim mentality.
“If the fish farm never claimed the right to a certain temprature water, certain levels of chemicals, etc. then he never had the right to it.”
Put yourself in the shoes of the fish farmer: you invested time and money in building the physical structure of the fish farm, you reared the young fish. The paper factory and the nuclear plant are new arrivals and you didn’t foresee that there is any danger in having both of them at the same river. So all future fish farmers will learn from this case:
Be precautionary!
When I install a fish farm than(from now on) I automatically claim that the river water might not be altered in any physical, chemical or biological sense from the state I found it in, because I can never be sure that this will not interfere with the operation of my fish farm.
In this sense even feeding the ducks is forbidden. I have a strong feeling that such precautionary claims would stall economic development.
Overexploitation of an ecosystem because it belongs to no one but is used by everyone. You might solve some environmental problems by privatisation of land and resources but this is not a panacea to all environmental problems.
Cost of the damage done:
as someone pointed out the (low) costs of damage in this example are entirely hypothetic. In a similar example the activities alongside the river could have contributed to the growth of a poisonous algae, which now causes severe health problems.
Plausibility of the example:
The complexity of cause effect-relations in this example are the rule and not the exception in environmental problems - ranging from coral bleeching to climate change.
Again with the “not a panacea”. Your entire argument is based on a logical fallacy. Eliminate the fallacy and you will realize that you have no valid argument.
“If the fish farm never claimed the right to a certain temprature water, certain levels of chemicals, etc. then he never had the right to it.”
Put yourself in the shoes of the fish farmer: you invested time and money in building the physical structure of the fish farm, you reared the young fish. The paper factory and the nuclear plant are new arrivals and you didn’t foresee that there is any danger in having both of them at the same river. So all future fish farmers will learn from this case:
Be precautionary!
When I install a fish farm than(from now on) I automatically claim that the river water might not be altered in any physical, chemical or biological sense from the state I found it in, because I can never be sure that this will not interfere with the operation of my fish farm.
In this sense even feeding the ducks is forbidden. I have a strong feeling that such precautionary claims would stall economic development.
I think there could be more to it. Is it economicly feesible for the fish farmer to chase down every single person who fed the ducks? Or is it more likely that there are relatively few major polluters along the river and he would be well served taking them to court. Also the fish farmer would have to be able to prove that the actions taken by those feeding the ducks directly impacted him… that would be a difficult case. While the nuclear power plant that dumps millions of gallons of 120 degree water into the river over the course of the year could be relatively easy to prove.
So we have to take all this theory and put it to the reality test. In theory he could chase down everyone who altered the river. But realisticly it would only be economicly feasible to take the big violators to task.
Think about it this way. You own a peice of land. A couple of individuals hike across the corner of your property on occasion. You dont really like and you dont want them to do it… but it only happens once every couple of months. It dosent bother you enough to pay to put up a fence or hire someone to guard against the tresspass. You do, however, clear post some no tresspassing signs to enforce your claim to the land.
Now what if instead a couple of people, its one person. Instead of hiking, he builds a 4 land highway that he uses as access to his industrial plant. Do you think that it might be economicly feasible for you to more forcibly assert your claim to the land. Maybe instead of just posting some no tresspass signs you hire someone to block the road and take the man to court?
Both cases your property rights have been violated, but one was a minor violation the other major. In both cases you asserted your right to the property (no tresspass signs, vrs court & hired security). The lenghts that you go to are indirect proportion to the value you subjective assign to the violation.
Since it the situation isn’t specified, I didn’t feel it was necessary to bring up specific things that might make the situation fall apart. Do you account for war when you explain the wheat market? “Oh yeah the wheat market works just dandy but if theres a war and half of everyone dies you could have some hiccups”.
First, TWC is a state cartel. Maybe the 5 people impacting the farm are all state cartels too. Don’t know. Furthermore, from hypothesis, having all your fish die is a pretty big deal, probably enough to hire a lawyer or spend 3 hours on the phone for.
Why not? Small people approach large businesses all the time. I don’t know where you work, but the oilfield is essentially made up of small guys offering positive NPV projects to large corporations. Leases, chemical companies, etc…
It was back when you and neoclassical were talking about business cycle theory. I confronted you with asymmetric vs symmetric inflation, which I believe put the cap on your arguments, and you didn’t bother to respond for some reason… There were also a lot of other issues I confronted you both with that never got answered, but which were neoclassical and which were you kind of blurr.
History aside, this boils down to you biting my head off for not reciting the Coase Theorem in its entirity, and then chalking the omission up to IGNORANCE rather than just perceived irrelevance. You’ve taken this opportunity to say “LOLOL look how stupid Sieben is he doesn’t even know about basic law theory. Here let me link him “anarchism for dummies” as if he hasn’t been around the block a few times.” U trollin man.
Since it the situation isn’t specified, I didn’t feel it was necessary to bring up specific things that might make the situation fall apart. Do you account for war when you explain the wheat market? “Oh yeah the wheat market works just dandy but if theres a war and half of everyone dies you could have some hiccups”.
if you believe your ommission of transaction costs was so irrelevant for your argument that it can be compared to ignoring the possibility of war when discussing the wheat market, then I know an excellent book by david friedman that provides an excellent introduction to the coase theorem and how essential the assumption of low transaction costs is.
It was back when you and neoclassical were talking about business cycle theory. I confronted you with asymmetric vs symmetric inflation, which I believe put the cap on your arguments, and you didn’t bother to respond for some reason… There were also a lot of other issues I confronted you both with that never got answered, but which were neoclassical and which were you kind of blurr.
don’t remember it off hand. i actually try to avoid business cycle discussions since i am not a macro guy. but i do know i have slipped into them a time or two (it is a pretty interesting topic so i sometimes can’t resist). if i neglected an essential point you made, i appologize.
History aside, this boils down to you biting my head off for not reciting the Coase Theorem in its entirity, and then chalking the omission up to IGNORANCE rather than just perceived irrelevance. You’ve taken this opportunity to say “LOLOL look how stupid Sieben is he doesn’t even know about basic law theory. Here let me link him “anarchism for dummies” as if he hasn’t been around the block a few times.” U trollin man.
i didn’t intend to make fun of you. it is just seems like a common error to me that folks on this board discuss externalities without mentioning transaction costs. i just want to correct that approach as I believe the assumption regarding transaction costs is essential (and really it is the importance of transaction costs that is the most important lesson in coase has to teach, not only in his paper on the problem of social cost but also in his paper on the origin of the firm).
i might have came on too strong and i’m sorry about that.
At this point, I agree with what DD5 said: you’re committing the nirvana fallacy. You’re also committing the strawman fallacy. Only the most naive of free-market supporters would claim that it “solves all problems”.
“Your entire argument is based on a logical fallacy. Eliminate the fallacy and you will realize that you have no valid argument.”
I still don’t see the fallacy, please explain it. I already admitted (when I started this discussion) that a government might be equally unable or even less able to solve the described problem. People are used to think in a kind of duality “every problem that can not be solved by the market must be solved by the government” or “every problem that the government can not solve must be solved by the market”.
People can avoid at least an escalation in the quantity of the described problems if they voluntarily restrict their consumption of environmental resources. They neither need the market nor the government for this.