Environmental Protectionism

[Orthogonal]

This thread is to continue the discussions currently ongoing in other threads, but could be more focused.

Man will necessarily encroach upon the environment and impact it in some way, regardless of how much or how little he tries to avoid it. However, when speaking of protecting the environment, the scope is usually narrowed to address any type of action that causes harm to the ecology of a system or harm to other people (directly or indirectly). The typical concern regarding environmental protection revolves around negative externalities, which would be defined as the cost of undesired or ill effects being born by innocent third parties. i.e. A steel company is producing steel in order to help build infrastructure etc, but a smoke stack is billowing soot into the neighboring land/air posing health risks and other ecological damage.

The main argument in favor of regulating this sort of activity is based on the claim that this is a diseconomy, or something outside of the market. An area that companies may have little incentive to prevent, or that identifying the source/cause may be difficult to ascertain. Thus government oversight is deemed necessary. A market driven response to this argument (Libertarian), is that these greivances are the result of a lack of clearly defined property rights and enforcement. By not clearly defining property rights it obfuscates accountability and leads to actions that would otherwise not occur.

What say you?

In the previous discussions, we were talking about a specific example, namely the use of DDT. I'll follow up with that in another post.

[Scheavo]

A market driven response to this argument (Libertarian), is that these greivances are the result of a lack of clearly defined property rights and enforcement

See, this may be true... but the problem isn't that if this were true, would the libertarian theory work, but rather, is such possible? Can you clearly define property rights, and actually enforce them? I say no, because there are things that are commons, air and water, which defy a strict sense of property, like land. If you demarcate an area of water, that water moves very easily and is not stable. If you demarcate an area of land, that land is generally going to stay put (let's ignore the minor movements of the earth's crust and small amounts of dust). What I do with my water effects everyone else water, even if such an individual effect is minute. What I do with my air effects everyone else air, even if such an individual effect is minute. Property rights can only go so far, and the enforcement of such rights can only go so far.

To bring up a slightly different example than DDT, there's these two twins that grew up behind my house. One of them, in the last year, got lymphoid cancer, the twin sister shows no trace. The cause is environmental, but they have no clue beyond that. It's impossible for the doctors to know what chemical caused the cancer, thus it's impossible for you to enforce the property rights, and sue an individual. They have some guesses as to what the chemical may have been, but who knows? There are impossibly many factors, and there is no smoke stack which you can easily point to as a problem.

The problem is, by getting rid of regulations, you would actually obfuscate accountability much more, for reasons I've already laid out. The harm caused to the environment is a sum total of all our actions, not the result of any one individual action. You would try and make it one individuals, when they  can easily just say that they're not responsible, and then require you to prove that they caused your problem, and not countless other people. It would make accountability damn near impossible.

[jsem]

Just found an interesting article. Haven't read it yet, will put it up anyway. Deals with this topic heavily:

https://mises.org/etexts/environfreedom.pdf

edit: read it. it was basically a written down version of the lecture I posted in the previous thread.

[Scheavo]

Just found an interesting article. Haven't read it yet, will put it up anyway. Deals with this topic heavily:

https://mises.org/etexts/environfreedom.pdf

edit: read it. it was basically a written down version of the lecture I posted in the previous thread.

There is so much wrong with this scenario it is hard to know where to begin a refutation. Perhaps we may best start with an empirical observation. If this criticism of the market were true, one would expect that, even if the Soviets couldn’t successfully run an economy, they could at least be trusted as far as the environment is concerned. In actual point of fact, nothing could be further from the truth.

Seriously, this guy doesn't ponder this issue very deeply. He confuses ability to do something with actually desiring to do something, and makes all government the exact same, all government policies the exact same, which is clearly wrong. Can government cause environmental harm? Sure, no one ever said they couldn't. That doesn't mean other's can't, at the same time, protect the environment. The soviet's programs weren't aimed at protecting the environment, so to say that they failed to protect the environment is just a stupid argument.

And this is to say nothing of the infamous Yellowstone Park forest fire,which the authorities refused to put out, citing ecological considerations;

So, when the authorities do the right thing, he complains that they didn't do anything? Not putting out the fire was an incredibly intelligent thing to do.

Up to the 1820s and 1830s, the legal jurisprudence in Great Britain and the U.S. was more or less predicated upon the libertarian vision of non invasiveness

In the 1820's and 1830's, we didn't know as much as we do now about environmental damage, and pollution. The more we learned, the more we realized that such a view of property rights was inadequate to deal with the overall problem of pollution

sue them, make them pay for their past transgressions, and get a court order prohibiting them from such invasions in future.

For this to work, you would have to be able to prove that the person was responsible - which is not always feasible. If a smoke stack is next door to my house, that's a different issue than someone, five states away, spraying their crops with DDT. Would libertarian ideals work for the smoke stack next door? You betcha. Would they work for the DDT being sprayed five states away? Nope, because you would run into impossible difficulties in proving the source, and the lawsuit would get nowhere.

*edit*

I take back the DDT comment, for someone would live closer to the area than I. However, you would still have a host of other issues to address, and provability is still an issue in a court of law for most cases.

I think I should be clear though: I agree that to protect the environment, we have to give people the right's to protect their environment. Where we disagree on is how to enforce it, and how to achieve the ends desired.  The court system would be heavily involved, but it cannot be relied upon to answer all questions - and there still the underlying question of what laws a judicial system upholds. In the extreme, too strong of property rights would be restricting on everyone else; if someone is allowed to say they don't want my breath on their property, becuase it's their property, and take me to a court of law because they're angry about their property being infringed upon unwillingly, then those property rights extend too far. So unless you want such unreasonable lawsuits being legitimate, you're going to have to draw the line somewhere on property rights; and where to draw the line is a different argument then if we should draw a line.

[Super Dude]

I don't have much to say, but to springboard off Scheavo's comment about the 1820s-30s bit, that's completely true. Conservationism didn't begin in earnest in the West until Roosevelt came along at the turn of the century, and even that was a far cry from true environmentalism, which emerged in the late 1960s/early 70s.

[Scheavo]

Another dissimilarity I realized is that the amount of industrial chemicals around at that time is miniscule compared to now (in fact, what did they have). It's like saying we should revert back to the 1790's rules regarding road policies, when in the 1790's, automobiles didn't exist.

[Super Dude]

I mean I don't have solid figures to back this up, but it was not fun to be a Londoner in the mid-19th century, that's for sure. Industrial growth was one of the primary factors in that.

[Orthogonal]

A market driven response to this argument (Libertarian), is that these greivances are the result of a lack of clearly defined property rights and enforcement

See, this may be true... but the problem isn't that if this were true, would the libertarian theory work, but rather, is such possible? Can you clearly define property rights, and actually enforce them? I say no, because there are things that are commons, air and water, which defy a strict sense of property, like land. If you demarcate an area of water, that water moves very easily and is not stable. If you demarcate an area of land, that land is generally going to stay put (let's ignore the minor movements of the earth's crust and small amounts of dust). What I do with my water effects everyone else water, even if such an individual effect is minute. What I do with my air effects everyone else air, even if such an individual effect is minute. Property rights can only go so far, and the enforcement of such rights can only go so far.

So, the issue is not; Can a free market protect the environment, but instead, can a free market establish clear property rights in all cases. This is the rut of the matter, because if they can be clearly defined, a logical process of laws and ownership will spell out the solutions in black and white. We are then just left with the difficulty of how do we define property rights in things that are not as divisional or demarcable as Land. Water is not so much of a problem. Someone can own a Lake or a River (or the Land containing the Lake/River) and traditional property rights apply. This is further applied to a the owners of water processing facilities, water delivery systems and any other forms like retail bottles etc. People may argue that the Oceans or large lakes do not fit this criteria, but they do. There is also some recent ideas and advances in the form of sea-steading. https://seasteading.org/about-seasteading/introduction

Air is admittedly more difficult, there are a few special cases where localized regions are climate controlled or filtered like greenhouses, manufacturing clean rooms etc. There are also passage routes established like airplane flight routes. What we see is that technology is allowing us to further advance the possibilities of what can be homesteaded and owned in a private manner. As time marches on, we will be able to further establish clear property rights in the atmosphere (and space). So, in the future, this whole issue may be trivial, but what do we do in the mean time when it is more difficult to define ownership (perhaps precise ownership won't ever be possible). When it comes to the rest of the Air and the environment on whole, things become a little more dicey.

If clear ownership cannot be established, then the best method for addressing negative externalities is through an extrinsic public policy. The knee-jerk reaction would be to claim that the government is the ideal choice to administer this policy. This is problematic for a number of reasons. Government regulators are susceptible to ruling on their own bias, and not the will of the people. They can also be bought out or succumb to lobbying action. However, lets just assume that they are not corruptable but made of the highest integrity and have nothing but the greatest concern for public good will. There is still a fatal problem with the fact that regulators have an inverse incentive system. There is no incentive to make things "good" or "better". If a regulator does a "good" job and things go well, then they will get nothing more than a pat on the back, and they will be given the same power and budget in the next fiscal cycle. However, if things go wrong and get out of hand, then people will demand that they "do something", and protect us from the "evil corporation", and the government then gives the regulating agency more power and money to deal with the issue. It is only through failure that the government grows, and so it is with environmental protection.

How would a free-market be different? There would be a market for extrinsic policies in the form of air insurance. An industry would be setup to allow clients to have a policy that details what air quality they would like to maintain, and there would be a premium associated with that level of quality. Any infraction would result in a claim to provide restitution. It is now in the interest of Air insurers to monitor the surrounding areas for new business's. If a company were to try and build a new manufacturing facility, the air insurer would step in and try to negotiate terms with the business such that they do not infringe on the environmental standards of their clientele. If they agree to the terms, everything is well. If they do not, then the air insurer will outbid the company for the land and sell it to someone who will use it wisely so they do not have to pay out massive claims to the community. We now have a system where profitability is associated with environmental health according to the will of society. (insurance would expand beyond just air, but to just about any environmental issue if desired).

In regards to something like DDT (or any dangerous chemical), a company would have higher insurance premiums due to the increased risk of manufacturing and selling dangerous chemicals. The same would be true for those who buy them for use. This would add additional operational costs and allow cheaper more environmentally friendly alternatives beat it out.

[rumborak]

Orthogonal, all that post, but you're ignoring the basic fact that Air and Water are pan-global entities, i.e. they move and are connected across the globe. If you ever wanted to institute that ownership stuff, whatever entity that would enforce it would have to span the world. Given that no country will be content being ruled by some external company, you're either stuck with a World Government, or the local governments doing the enforcement in lieu of such a thing.

rumborak

[Super Dude]

I'm sorry but the mere idea of buying "air insurance" just bothers me.

[Scheavo]

Changing the name of government to something else doesn't change it's essence. All your doing is changing government to "insurance company," and expecting a vast amount of difference. In a purely free market, what gives an insurance company the right to negotiate? You're relying upon some sense of enforcement, some sense of "you cant' do this, we won't let you." Even a claim has to depend upon some government to enforce the claim. How does an insurance company get money to pay out the claims to it's residents? What gives the insurance companies the right to tell companies what they have to do?

For example, that article jsem linked to: the libertarian there harks back to the "good ol days" of the 1820's and 30's, but sorta glazes over the fact that those claims were backed up BY a government. If the offending company didn't abide by the ruling, there would have been so called " violent" repercussions. When you completely get rid of any possibility of actually enforcing a rule (as a world completely without government or any centralization of force), you basically make the ruling impotent.

There is still a fatal problem with the fact that regulators have an inverse incentive system. There is no incentive to make things "good" or "better". If a regulator does a "good" job and things go well, then they will get nothing more than a pat on the back, and they will be given the same power and budget in the next fiscal cycle

Not everyone is purely driven by profit incentives, and there ARE positives to doing a good job (promotion, thus more money), and there are negatives to doing a bad job (you can get fired). The office is not the same as the individual, and the individual in an insurance company which is monitoring the claims would face the same kind of job-related pressures. Insurance companies are just as easily bribed as government, and the consumer or citizen isn't going to know that such is happening for a period of time. However, when you make the entire function of such protection related to money and greed, you really do up the chances of a bribery. The thing about government is that a lot of people go into it becuase they want to help out their fellow people, and money is not their direction interest. In a free-market, money is the only interest possible.

[Orthogonal]

Orthogonal, all that post, but you're ignoring the basic fact that Air and Water are pan-global entities, i.e. they move and are connected across the globe. If you ever wanted to institute that ownership stuff, whatever entity that would enforce it would have to span the world. Given that no country will be content being ruled by some external company, you're either stuck with a World Government, or the local governments doing the enforcement in lieu of such a thing.

rumborak

With respects to ownership of Air and Water, it isn't necessarily owning specific tangible molecules (it may for things like bottled water, compressed air), but it is more about owning the region or volume in which air or water occupy. Air/Water can move across the globe in its natural cycle. This can be divided up and doesn't require a World Government.

I'm sorry but the mere idea of buying "air insurance" just bothers me.

If mother nature blows smoke from a forest fire or dumps ash from a volcanic eruption, you might find the value in this. They could provide additional filtration or clean up services or even temporary relocation until things clear up.

You are already paying for this anyway in a government regulated system either through taxes or by the additional costs imposed to business operations. The difference is that the cost can now be calculated directly, and thus we can target efficiencies to reduce waste/pollution instead of it just being lumped in homogenously.

[Orthogonal]

Changing the name of government to something else doesn't change it's essence. All your doing is changing government to "insurance company," and expecting a vast amount of difference. In a purely free market, what gives an insurance company the right to negotiate? You're relying upon some sense of enforcement, some sense of "you cant' do this, we won't let you." Even a claim has to depend upon some government to enforce the claim. How does an insurance company get money to pay out the claims to it's residents? What gives the insurance companies the right to tell companies what they have to do?

Call it by whatever semantics you want, but it is not the same as government. It is polycentric and brings about competition through different insurers. All with different scopes and overlapping coverages. It prevents a single point of failure. Insurer's get paid by the premium you pay them. That's how insurance works. Your policy will have a premium assessed on the calculated risk-potential of loss. They don't have any right to tell companies what to do, but they can talk to them in free negotiation. The response from the company will determine the response of the insurer. If the company does not want to play nice and agree to environmental concerns, the insurer can outbid them for the property and/or they will publicize the rogue company to their clientele and other insurer's. Failure to be associated with any insurer risks complete ostracism from society since no one will buy your products if you are not insured so there is incentive to comply. (The reason people would not buy the products from an uninsured company is because their own insurer's would not approve any claims in the event something goes wrong). This insurance model expands beyond just environmental concerns, but can be applied to any and all commerce.

This is not a new idea, it has been around for hundreds of years and was used successfully throughout Europe in during the middle ages with Lex Mercatoria. https://en.wikipedia.org/wiki/Lex_mercatoria. There are other modern examples like the use of Ebay and their feedback system. There is no real regulation other than buyer/seller feedback to weed out the unscrupulous traders and foster good reputations. Your reputation is your lifeblood Ebay even offers insurance protection against fraud for those who chose it.

[Scheavo]

Changing the name of government to something else doesn't change it's essence. All your doing is changing government to "insurance company," and expecting a vast amount of difference. In a purely free market, what gives an insurance company the right to negotiate? You're relying upon some sense of enforcement, some sense of "you cant' do this, we won't let you." Even a claim has to depend upon some government to enforce the claim. How does an insurance company get money to pay out the claims to it's residents? What gives the insurance companies the right to tell companies what they have to do?

Call it by whatever semantics you want, but it is not the same as government. It is polycentric and brings about competition through different insurers. All with different scopes and overlapping coverages. It prevents a single point of failure. Insurer's get paid by the premium you pay them. That's how insurance works. Your policy will have a premium assessed on the calculated risk-potential of loss. They don't have any right to tell companies what to do, but they can talk to them in free negotiation. The response from the company will determine the response of the insurer. If the company does not want to play nice and agree to environmental concerns, the insurer can outbid them for the property and/or they will publicize the rogue company to their clientele and other insurer's. Failure to be associated with any insurer risks complete ostracism from society since no one will buy your products if you are not insured so there is incentive to comply. (The reason people would not buy the products from an uninsured company is because their own insurer's would not approve any claims in the event something goes wrong). This insurance model expands beyond just environmental concerns, but can be applied to any and all commerce.

Lol, so a company gets to say, "we don't agree with you," and then pollute all they want. You're assuming that the market for the polluter's is local, which is rarely the case, so they don't really have to get a fuck what the local population thinks. Consumers, far removed from the factory, would still buy the product, because they wouldn't be so concerning about a potential claim they would have to file. What would prevent a company from another country from coming in, opening up a factory, polluting the fuck out of the area, and selling the products back in their home country (like what we do to China...)?

Furthermore, and just as important, you think that this would lead to a polycentric reality, when in fact all that would happen is the most extreme insurer would get it's way. Companies would have to pander to the most extreme insurance company, and insurance companies with more "sane" policies. It's the same reason why California controlled emissions standards, and why Texas controls the educational standards. In regards to car emissions standards, the car companies wanted a national, uniform policy, so that they would know what kind of cars they were allowed to make. It wasn't practical for them to make cars for every specialized market.

Also, something I think which hasn't been said yet, is that there are environmental concerns that are more than human welfare. Some of us actually care about the planet in general, meaning tree and animal health.

[rumborak]

With respects to ownership of Air and Water, it isn't necessarily owning specific tangible molecules (it may for things like bottled water, compressed air), but it is more about owning the region or volume in which air or water occupy. Air/Water can move across the globe in its natural cycle. This can be divided up and doesn't require a World Government.

What's the point of that then? The space it occupies isn't the issue, it's the material inside them, and that's what moves and would be need to be "insured" across country borders. Mere insurance of physical space has no meaningful correspondence to what this is all about.

rumborak

[Scheavo]

Exactly. Say I own some land that has a river going through it. Can I damn up that river? I want my property to have a small lake. It's on my property, so according to pure free-market theory, there's nothing to actually prevent me from damning up that river. Someone wants to sue me? So what, I'll just ignore them. It's not like I'm running a business, so it's not as if I have a reputation I need to uphold. Can I not dump my sewage into the water? Again, it's my property, who are you to tell me what I can or cannot do on my property? Again, if you sue me, so what? I don't care what you think, it's my land; you can drink my shitty water.

Which just made me realize a very important point that hasn't been made: not everyone who's causing environmental damage is doing so because of a market reason. If I burn tires in the back of my yard, it's probably not going to effect my property that much, and sense I'm not operating a business, the whole insurance scheme means nothing. I can just ignore anyone who wants me to stop, there's nothing they can do about it, even though its harming them and their environment.

[Orthogonal]

With respects to ownership of Air and Water, it isn't necessarily owning specific tangible molecules (it may for things like bottled water, compressed air), but it is more about owning the region or volume in which air or water occupy. Air/Water can move across the globe in its natural cycle. This can be divided up and doesn't require a World Government.

What's the point of that then? The space it occupies isn't the issue, it's the material inside them, and that's what moves and would be need to be "insured" across country borders. Mere insurance of physical space has no meaningful correspondence to what this is all about.

rumborak

You own your own chemicals and pollutants, if they are transported into another property owned by someone else whether intentional or not, you are responsible for it legally. Whether it is transported by air, water or in a barrel in the back of a truck, it doesn't matter, if it causes contamination or damage to another property, you are liable.

[Super Dude]

With respects to ownership of Air and Water, it isn't necessarily owning specific tangible molecules (it may for things like bottled water, compressed air), but it is more about owning the region or volume in which air or water occupy. Air/Water can move across the globe in its natural cycle. This can be divided up and doesn't require a World Government.

What's the point of that then? The space it occupies isn't the issue, it's the material inside them, and that's what moves and would be need to be "insured" across country borders. Mere insurance of physical space has no meaningful correspondence to what this is all about.

rumborak

You own your own chemicals and pollutants, if they are transported into another property owned by someone else whether intentional or not, you are responsible for it legally. Whether it is transported by air, water or in a barrel in the back of a truck, it doesn't matter, if it causes contamination or damage to another property, you are liable.

By whose enforcement?

[Orthogonal]

Exactly. Say I own some land that has a river going through it. Can I damn up that river? I want my property to have a small lake. It's on my property, so according to pure free-market theory, there's nothing to actually prevent me from damning up that river. Someone wants to sue me? So what, I'll just ignore them. It's not like I'm running a business, so it's not as if I have a reputation I need to uphold. Can I not dump my sewage into the water? Again, it's my property, who are you to tell me what I can or cannot do on my property? Again, if you sue me, so what? I don't care what you think, it's my land; you can drink my shitty water.

Sure, you can build a resevoir, but it's not like you can restrict the flow indefinately, you can only build it so high and then you have to let it run off. This will typically be used for hydroelectric power, not uncommon.

You can dump sewage into your own water, but I'm not sure why you would want to do that. If it gets onto someone else's property you are liable legally. No one can tell you what you can and cannot do with your property, but they can file suit for infringements that you commit against their property. This thread isn't talking about how we enforce laws (would be a good discussion in another thread), but how you respond to environmental concerns.

[Orthogonal]

Which just made me realize a very important point that hasn't been made: not everyone who's causing environmental damage is doing so because of a market reason. If I burn tires in the back of my yard, it's probably not going to effect my property that much, and sense I'm not operating a business, the whole insurance scheme means nothing. I can just ignore anyone who wants me to stop, there's nothing they can do about it, even though its harming them and their environment.

Those kinds of actions are incredibly difficult to detect, regardless of whether you have government oversight or free-market insurers. The question is instead, what should be done if someone is caught doing something like this. The governmental response is usually fines and possibly jail time first, and restitution to the injured party second. In the free market system it would be focused on restitution to injured party first. Similar to how you have a credit score representing your reliability in re-paying your debts, you would have a reputation score for not just your environmental reputation, but pretty much your behavior in general. If someone were caught burning tires (or doing anything irresponsible), they would take a hit to their reputation when it is reported to their insurer and broadcast to all other agencies. It would mean higher insurance premiums for that person, it would also mean that any other type of commerce they engage in would be more expensive. If they go to a restaurant, go on an airplane, try to rent a car/hotel, do anything, they will either be charged a nominal fee or be refused service outright due to their sullied reputation and higher risk of causing problems. The only way to repair their reputation would be to pay full restitution to harmed parties.

[Scheavo]

By whose enforcement?

Exactly. Say I own some land that has a river going through it. Can I damn up that river? I want my property to have a small lake. It's on my property, so according to pure free-market theory, there's nothing to actually prevent me from damning up that river. Someone wants to sue me? So what, I'll just ignore them. It's not like I'm running a business, so it's not as if I have a reputation I need to uphold. Can I not dump my sewage into the water? Again, it's my property, who are you to tell me what I can or cannot do on my property? Again, if you sue me, so what? I don't care what you think, it's my land; you can drink my shitty water.

Sure, you can build a resevoir, but it's not like you can restrict the flow indefinately, you can only build it so high and then you have to let it run off. This will typically be used for hydroelectric power, not uncommon.

Dude, water rights, and water flow, etc, is an vastly important and contentious issue, and you damming up your stream drastically effects people downstream. There's a reason there was a lot of violence in the old west regarding water rights, and a reason why the system we have no came into being. Depending upon where I put my damn, it could effect fish mating habits; say my damn restricts salmon from mating, that effects the amount of salmon in the ocean, which effects the operations of salmon farmers.

If they go to a restaurant, go on an airplane, try to rent a car/hotel, do anything, they will either be charged a nominal fee or be refused service outright due to their sullied reputation and higher risk of causing problems.

Lol, ridiculous. If I own a restaurant, what do I care what the air insurance company says? I'm somehow going to know the reputation of each and every customer, then make an adjustment to my prices to reflect that, for some unrelated reason that has nothing to do with our transaction?

[Orthogonal]

Dude, water rights, and water flow, etc, is an vastly important and contentious issue, and you damming up your stream drastically effects people downstream. There's a reason there was a lot of violence in the old west regarding water rights, and a reason why the system we have no came into being. Depending upon where I put my damn, it could effect fish mating habits; say my damn restricts salmon from mating, that effects the amount of salmon in the ocean, which effects the operations of salmon farmers.

I agree, it is important and can be contentious. If you are the recipient of a water flow into your property, you homestead your water usage (not all the water, but atleast what you use). If someone upstream were to try and curtail the natural flow below what you have homesteaded (artificial curtail, not a natural drop like drought etc.) then a suit could be filed against that person. It's a similar idea if you have a satellite dish, and your neighbor plants a bunch of big trees blocking your line of sight, they are infringing on your prior homestead.

[Scheavo]

Dude, water rights, and water flow, etc, is an vastly important and contentious issue, and you damming up your stream drastically effects people downstream. There's a reason there was a lot of violence in the old west regarding water rights, and a reason why the system we have no came into being. Depending upon where I put my damn, it could effect fish mating habits; say my damn restricts salmon from mating, that effects the amount of salmon in the ocean, which effects the operations of salmon farmers.

I agree, it is important and can be contentious. If you are the recipient of a water flow into your property, you homestead your water usage (not all the water, but atleast what you use). If someone upstream were to try and curtail the natural flow below what you have homesteaded (artificial curtail, not a natural drop like drought etc.) then a suit could be filed against that person. It's a similar idea if you have a satellite dish, and your neighbor plants a bunch of big trees blocking your line of sight, they are infringing on your prior homestead.

A suit, in your world, that could only go forward with the approval of the transgressor. Meaning, it's impotent. To make this world viable, you would need a fiat judicial system to enforce these property rights, to litigate the lawsuits in a manner where the transgressor cant' simply say, "fuck you." Market consequences are not always going to apply, especially in a case where the cause of the transgression is not market driven.

And don't you see what happening? You're starting to say that I can tell you what you can or cannot do with your property becuase it affects my property. That's the basic liberal definition of liberty, and of rights, but those definitions rely upon a fiat arbitrator to ensure those rights (such as, theoretically, the federal government and the bill of rights). If you would only allow for a fiat judicial system to be in place, you would have my ear a lot more than you actually do.

[Super Dude]

This may seem like a stupid question given the basis of discussion but why does everything have to be privatized? Why is public ownership like the commons seen as being so vile and unjust? Why most anyone own anything?

[jsem]

Well. My case for private property for use of the means of production is first of all, that allocates resources most efficiently. Because private owners are keen to preserving the long term capital value of the land, they will try to maximize the efficiency of the production.

Consider the origins of agriculture thousands of years ago. Because of the factor of greed, private property was necessary for agriculture. If you produced a bunch of wheat on piece of land, and you didn't own it, what's to stop someone from coming and stealing your wheat? Because of private property there is an incentive for one to produce for oneself and for the purpose of engaging in commerce with the produced goods. By pursuing ones self interest, that can only be achieved this way by private property, you're benefiting others by supplying them with goods they might like. The invisible hand at work.

I mean, public ownership doesn't necessarily have to be bad; it's well meaning and all. But if you have public ownership, someone has to make decisions on how the property is to be used for the means of production. That means, some people who are part owners might have to agree to the property being used for something they personally disagree with - but they have little say in it. Individual rights will be compromised for the purpose of the common good. Plus, it all depends on having a good planner - what if you have a terrible planner? That means everyone will suffer the cost of this individual. However, if a private property owner makes poor decisions, HE bares the cost and no one else. The losses are private, not socialized. (Of course, in perfect socialism, the property used for means of production are owned by the workers themselves - so they dictate what the property is used for, better than having some sort of central planning)

To bring up another example, take forests. Basically, the government leases out parts of the forests to firms and they cut down the trees. However, if there was private ownership, the owners would be keen to preserving the long term capital value of the forest and thus not cutting down much. But because the government is the owner, the firms who lease it have NO incentive whatsoever to preserve the long term capital value, instead they will chop everything they can down as fast as possible before anyone else does it. That's what happens without private property. Then you have to set up quotas to regulate how much wood can be chopped annually etc.

This can be perfectly demonstrated with a little example. Say farmers didn't own their land, or their cows. What would stop poachers from killing all cows in existence as fast as possible before other poachers do? A private owner of cows would be determined to only kill a few every year and preserve the rest. The farmer instead tries to come up with ways to maximize his efficiency for the greater benefit of the consumers, and therefore for the greater benefit of everyone.


All of this may or may not be applicable in all areas though, and I can see the reason for that. What value is there in preserving natural parks for example? Would a private property owner have an incentive to keep the population of endangered species steady? Would a private property owner really want to maintain the long term capital value in all cases? How do you prove the guilt of a polluter of your property? There are serious debates that could be had about these things (as is evident in this very thread).

[Super Dude]

What about a farming co-op type situation, like a kibbutz or something? They're not perfect but they actually pretty well, especially in terms of providing labor.

[Scheavo]

Consider the origins of agriculture thousands of years ago. Because of the factor of greed, private property was necessary for agriculture. If you produced a bunch of wheat on piece of land, and you didn't own it, what's to stop someone from coming and stealing your wheat?

That's why government wsa formed. You and your neighbors are both interested in keeping the fruits of their labor, so you come to an agreement where you will respect each otehrs land, and help them protect each others land. VOILA! government.

I mean, public ownership doesn't necessarily have to be bad; it's well meaning and all. But if you have public ownership, someone has to make decisions on how the property is to be used for the means of production. That means, some people who are part owners might have to agree to the property being used for something they personally disagree with - but they have little say in it. Individual rights will be compromised for the purpose of the common good. Plus, it all depends on having a good planner - what if you have a terrible planner? That means everyone will suffer the cost of this individual. However, if a private property owner makes poor decisions, HE bares the cost and no one else. The losses are private, not socialized. (Of course, in perfect socialism, the property used for means of production are owned by the workers themselves - so they dictate what the property is used for, better than having some sort of central planning)

This is really a non-sequitor to most liberal politics. There aren't many liberals out there saying to make everything publicly owned, just acknowledging that some things are public by their very nature - air and water amongst the foremost of those. Locke is one of the foundres of liberal theory, and of libertarian theory, and he wrote a paper about the Commons, what role they play in society, etc.

To bring up another example, take forests. Basically, the government leases out parts of the forests to firms and they cut down the trees. However, if there was private ownership, the owners would be keen to preserving the long term capital value of the forest and thus not cutting down much. But because the government is the owner, the firms who lease it have NO incentive whatsoever to preserve the long term capital value, instead they will chop everything they can down as fast as possible before anyone else does it. That's what happens without private property. Then you have to set up quotas to regulate how much wood can be chopped annually etc.

Due to regulations about what can and cannot be done, this is rarely the case anymore. Private ownership has also destroyed many, many environmental area's. Look up Libby, Montana, or the great Berkeley Pit.

This can be perfectly demonstrated with a little example. Say farmers didn't own their land, or their cows. What would stop poachers from killing all cows in existence as fast as possible before other poachers do? A private owner of cows would be determined to only kill a few every year and preserve the rest. The farmer instead tries to come up with ways to maximize his efficiency for the greater benefit of the consumers, and therefore for the greater benefit of everyone.

Red herring or a strawman, the difference get's confusing often time. No one has suggested farmers don't own their land, or their cows. You're arguing against communism, which is not socialism, and is definitely not democratic socialism.

You get to own your own land, and you get to do with your property what you desire - SO LONG as this does not negatively impact other people. At which point, we are not saying you can no longer own your land, only that you cannot do whatever it is that is harming other people.

[Orthogonal]

This may seem like a stupid question given the basis of discussion but why does everything have to be privatized? Why is public ownership like the commons seen as being so vile and unjust? Why most anyone own anything?

Everything doesn't have to be privatized. Libertarian theory has no problem whatsoever if a group of people want to form a commune or any other type of social structure that can be imagined. The only criteria that must be met, however, is that it is a voluntary association. Austrian Economics on the other hand, (A special case of Libertarianism applied to trade and subjective valuation), would conclude that any economic system other than free-markets predicated on private property will have significant problems and likely fail.

[Super Dude]

By that logic, can't a government be a voluntary association? Especially if it derives its sovereignty from popular consent.

[rumborak]

This may seem like a stupid question given the basis of discussion but why does everything have to be privatized? Why is public ownership like the commons seen as being so vile and unjust? Why most anyone own anything?

Everything doesn't have to be privatized. Libertarian theory has no problem whatsoever if a group of people want to form a commune or any other type of social structure that can be imagined. The only criteria that must be met, however, is that it is a voluntary association. Austrian Economics on the other hand, (A special case of Libertarianism applied to trade and subjective valuation), would conclude that any economic system other than free-markets predicated on private property will have significant problems and likely fail.

Then again, Austrian Economics failed. So, you got a failed economic theory predicting the failure of something else.

rumborak

[jsem]

When did it fail exactly? Just want you to bring up something to back up your claim.

[rumborak]

Austrian Economics, as a theory that explains the cycles a market economy undergoes, has been long superseded by more accurate theories. In response to its failures it evolved into a set of theories that actively rejects the value of empirical validation of the theory. Which frankly, is what religions do in an attempt to protect themselves from validation/falsification. I like this paragraph from Wikipedia:

Critics argue that Austrian economics generally lacks scientific rigor, rejects the scientific method, and rejects the use of empirical data.[5][7][88] Thomas Mayer[6] has argued that Austrian economists have advocated a rejection of scientific methods which involve directly using empirical data in the development of (falsifiable) theories; application of empirical data is fundamental to the scientific method.[88] Austrians argue that empirical data in and of itself cannot explain anything, which in turn implies that empirical data cannot falsify a theory.[89] Mark Blaug has criticized over-reliance on methodological individualism, arguing it would rule out all macroeconomic propositions that cannot be reduced to microeconomic ones, and hence reject almost the whole of received macroeconomics.[90]

and this one points out a direct failure of prediction as a theory:

According to economic historians, economies have experienced less severe boom-bust cycles after World War II, because governments have addressed the problem of economic recessions.[94][102][103][104] This has especially been true after central banks were granted independence in the 1980s, and started using monetary policy to stabilize the business cycle, an event known as The Great Moderation. Critics have also argued that, as the Austrian business cycle theory points to the actions of fractional-reserve banks and central banks to explain the business cycles, it fails to explain the severity of business cycles before the establishment of the Federal Reserve in 1913. For example, the Panic of 1873 initiated the Long Depression in the United States and much of Europe.[94] There were also severe market crashes in the United States of magnitude comparable to the 1929 crash in 1869, 1884, 1896, 1901, and 1907, though there was no central bank or national monetary policy in the US during these crises. In fact, the movement to establish central banking in the United States was in part a response to the business cycle, particularly the Panic of 1907.[105][94]

rumborak

[jsem]

I think the ABCT is one of the finest contributions to economics ever though. There are really not many full business cycle theories except for the Austrian one. Other schools accept that business cycles to occur, but not why they happen.

You're right that Austrians reject empirical data, they favor the use of praxeology - which involves deducing the laws of economics from fundamental axioms of human action. Something about this rubs me the wrong way too, yes it's very unscientific in a way. But the empirical data seems to suggest that a lot of what the Austrian theories predict have shown to be true. This is especially true of the business cycle theory.

And when you go back in history, and look at bubbles in the past, even before central banks, you almost ALWAYS find instances of credit expansion in the building of a bubble. Murray Rothbard was the leading expert in the world when it comes to the Panic of 1819, he wrote a scholarly book about it. He also wrote a book called The History of Money and Banking in the United States where he completely destroys those accusations that the Austrians cannot explain boom-bust cycles before the Federal Reserve. He points to the credit expansions that always take place before a severe market crash. In the case of the "long" depression of 1873-1879, what happened was really that a lot of bloated banks and railroads were driven into bankruptcy in 1873, and in the following 6 years there was real economic growth - but price deflation, not an actual depression (according to Rothbard).

I can see the arguments against the school for its use of "unscientific" methods though, but on empirical evidence - others cannot point to the history and say that there was no central bank and therefore Austrians cannot explain those boom-bust cycles.

[rumborak]

A couple of comments:

- The rejection of empirical evidence is really just the tip of the iceberg. As you point out, the idea of praxeology underpins the whole thing, and IMHO it is one of the biggest pipe dreams I've ever heard of. It's like philosophy, which (at least at some point) had the idea that, given rock-solid axioms, it could deduce everything on top through thorough application of logic. And, just like philosophy, praxeology fails almost immediately because its basic unit, the human, gets reduced to a caricature of the real thing (e.g. the "rational agent") in order to make *any* kind of higher-level deductions.
- The thing about those cases of cycles before the Fed was in town, the attempts of explanation by the AE folks kinda undermines their own theory. According to them, essentially all cycles are caused by monetary policy. By "digging up" secondary effects that supposedly brought about those cycles, they undermine that very statement that monetary policy is the root of all evil. They have to forefully admit that it's much more complex than that, and as the Wikipedia snippet points out, it also fails to acknowledge/explain the phase of the Great Moderation. There again it digs up secondary effects that supposedly counteracted it, once again undermining their own theory that monetary policy is the inexorable cause of economic cycles.
It's the classic case of where negative evidence is used for confirming the theory, positive evidence is attributed to other factors. Because AE folks do use empirical evidence, namely historical events. But only the one that confirms their theory; the other stuff gets rejected actively with said rejection of evidence.

BTW, I completely agree with you that AE has made incredibly valuable contributions to economic theory; but I also think it is anachronistic, and I find its biggest allure is it's simplicity in that it defines a clear enemy, the government.

rumborak

[jsem]

AE folks do use empirical evidence, namely historical events. But only the one that confirms their theory; the other stuff gets rejected actively with said rejection of evidence.

Everyone can be seen doing this to an extent.