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It should be obvious that BP is by far the leading victim, but I’ve yet to see a single expression of sadness for the company and its losses. Indeed, the words of disgust for BP are beyond belief. FULL ARTICLE by Llewellyn H. Rockwell, Jr.
Likely the greatest piece that will ever be written on this “catastrophe.”
I would love to use the following quote for an OU Daily opinion column, but the paper has predictably rushed to take the textbook liberal anti-offshore drilling stance with yet another boring, predictable statist column from its boring, predictable statist columnists.
“The abstraction called the ‘ecosystem’ — which never seems to include mankind or civilization — has done far less for us than the oil industry, and the factories, planes, trains, and automobiles it fuels.”
BP should have carried liability insurance above the federal mandated limit. The story will play out just like Union Carbide, they will go bankrupt and be bought out by another oil company. And the liability will spread to Transocean and Haliburton before the dust settles.
I hate to see further regulations and limits on drilling, but something as simple as installing back ups to back up shut off valves. And maybe they will store the skimming booms used in burning off the oil in the Gulf area, not Indiana. Lets hope the industry learns from this and make changes to prevent this in the future.
The oil business is dirty by nature. BP will be fine as the UK will just bail them out. (ha!)
I fail to see why we should feel sad for BP. The article says that they’ve been working for years to avoid this sort of problem, and I presume have spent considerable sums of money in that effort. They failed in their efforts, and now have to shoulder the consequences. The market has worked. Now that market may be distorted by all sorts of government regulations and interferences, but these weren’t a secret kept from BP. They played a high-stakes game and they lost, which makes them a loser, not a victim.
Exploit the Earth.
Green is the color of money.
While there is something to be said for BP’s loss, it has to be stated that oil companies like BP are to some extent in bed with the state. This has some effect on my sympathy for them.
I totally agree on the limited liability issue. It shouldn’t exist. BP should pay 100% of the cost for cleanup and reimburse fishermen and others for lost wages due to the spill.
How on earth is BP a victim?? They, of course, don’t want their precious oil leaking into the oceans however that doesn’t make them a victim. A guy whose car brakes fail and plunges into a crowd kill ten people and injures fifteen others isn’t a victim at all. He didn’t want the accident and sort of just ‘happened’ however he isn’t a victim and is liable and better start talking to his insurance company and lawyer.
On the other hand, if you want not put prices on disasters what of the Bhopal incident of 1984? The Indians who died there wouldn’t have done much for the world and more than enough Indian babies were born in the day after to make up for the fatalies. That incident was no skin off Westerners’ noses and most of India suffered personally little from the disaster either.
In a world of private property, if you soil someone else’s property, you bear the liability.
How different would BP’s policies be if only we lived in such a world?
Would they carry more liability insurance? Would they have more safeguards in place to reduce the cost of that insurance? Would they have a better contingency plan in place, should an accident occur? I think the answers are Yes, Yes, and Yes – but in our world of public property it’s impossible to know.
They did have safety measures, but they didn’t work. Infact because of the explosion there isn’t one measure available in the world which would have worked. It’s unclear as to why the 4 or so pressure valves failed to work.
It’s not like BP has an incentive to not be safe. From a business perspective (since that’s all oil companies care about riiight?) this is a worst case scenerio that they wanted to avoid at all costs.
If people were really so concerned about the environment they would be willing to live in 1850′s era communities.
I don’t know about you but judging from the amount of wells in production in and around the US I think the industry is damn lucky to have gone this long without a major accident.
So let us continue with your example of the car accident, in attempt to show that BP is not a victim. Tell us; how many people that are not associated with BP have died due to the accident?
Great article. The fact that oceans remain largely “publically” owned through governments is precisely the problem I discussed with my brother after the disaster struck. The Obama administration will not discuss this; instead it will call for more government power to stretch forth its hand across fast territories irrespective of private property. This kind of power will now doubt attract much corruption from influential private interests. And the fact that government guarentees cleanup after the spill instead of addressing private property rights to the ocean only ensures that the incentive private insurance for such disasters will be minimized.
I just recently watched a news story about how apparently the rigging that’s necessary to gather vast oil spills is not available to the government for at least one week. I don’t know about the truth behind this claim, but I highly doubt that the same government that proved catatonic when it came to Katrina will somehow do wonders this time around.
I don’t feel sorry for the company, neither do I hate it. However, I do agree with the general idea of the article that politicians thrive on disasters of all sorts because they use them as a platform for persuading the public that they (the politicians) have a productive purpose in the society.
I agree, accidents happen and will always happen. This is the purpose of insurance.
The loss of 11 souls is indeed tragic, as is the media’s overlooking of it, however your point about the number of wells vs. the number of accidents is very true.
BP only has somewhat of an incentive to be safe. State-imposed limits on liability, whether by regulations on insurance requirements or by granting corporations limited liability, distort this incentive. They are rent-seekers (Joshua at May 5, 2010 9:14am made this point).
There was an opinion piece in USA Today that asked why BP was not liable for cleaning up its mess. I sent in a letter to the editor suggesting that the problem is the lack of clearly defined property rights in the Gulf of Mexico. Here is the full letter: “Oil Spills & Property Rights“.
How is BP a victim at all? I s’pose had the incident occurs well into international waters nowhere near any coastlines then BP wouldn’t have do jack expect try to salvage anything of value.
You are the one who used a fatal car accident as an example to show that BP is not a victim. So, by using your example, I will ask again; how many people that are not associated with BP have died due to the accident?
Suppose that I owned the Louisiana coastline way back when. Under libertarian principles, could I seek and obtain an injunction against BP if it proposed an oil rig off-shore? Similarly, if I owned property beside what is now a nuclear reactor, could I obtain an injunction against the company before it was able to complete the reactor?
Really? This just sounds as an attempt to go against the mainstream narrative for the sake of it.
BP has been in bed with the environmental movement for years. They are huge corporate supporters of cap and trade and have been allocating large sums of their advertising budget to advance the environmentalist/global warming agenda. Their “Beyond Petroleum” ad campaign has really become a “Bash Petroleum” ad campaign. It’s hard for me to feel sorry for them as a company.
What a croc of shit. I’m off this email list.
I think there are some 36,000 offshore oil rigs around the USA. One report I read showed that a total of 70,000 barrels of leakage occured in the 30 years prior to this accident.
One of the key problems was the depth being drilled, which is directly a result of regulatory law. Oil drillers can’t drill closer to shore, forcing them into deeper waters. Deeper waters are higher pressure, making such accidents more likely to happen. It was only 15 years ago that it wasn’t even possible to drill out there.
What offshore drillers do is set up a single rig and then spider out the pipes for miles under the sea floor after drilling straight down. Its safer for all involved if they weren’t banned from starting the well closer to shore and spider out from there.
The government’s idea of a response is pretty much the same as the Haitian earthquake: send down a bunch of Navy ships that aren’t equipped to handle the situation. Obama thinks that sending guided missile destroyers will do some good. What exactly does a DDG do that can contain and/or clean up an oceanic oil spill? Shoot missiles at it? We’re wasting massive amounts of taxpayer dollars on this sort of boondoggle because, well, lets just send down boats to pretend we’re helping.
No, you can’t. It isn’t your property, therefore, you can’t block someone else using it, especially on an outside, rare possibility of something going wrong. You’d have to establish that your property is actually being damaged or will, beyond a reasonable doubt, be damaged, in which case your homestead rights kick in and the offending nuclear power plant owner would have to reimburse you the exact value of what you lost. At no point can you block the use of the owner’s land, just force them to reimburse you for lost value for as long as the activity in question is continuing. It would be up to the nuke plant owner or oil well owner to determine if they wish to continue the activity and pay you or cease the activity.
Arguing that BP should not bear the cost becuase of a lack of property rights ignores the fact that BP has been granted the exlusive right to profit from the well.
The BP situation leaves me in a bit of a conundrum. We should support the fossil fuel industry in its battle with the radical environmentalists and AGW fanatics. We all know that the real agenda for these groups is the promotion of socialism at the expense of individual freedom. On the other hand there is nothing lower than a traitor. BP is a Quisling corporation that relies on people like us to defend their property rights, while working hard to undermine the freedom of the very people who are supporting their interests. An argument could be made that Quisling corps such as G.E, and BP should be selected for any type of legal harrasment that is available.
In terms of economic damage, I wonder how the Iceland volcanic eruption compares with this. In addition, why aren’t the environmentalists gathered around the crater of the volcano, castigating it for spewing millions of tons of toxins into our precious atmosphere?
I really like the article. It is pretty much ‘spot on’ except for the statement about the improved fishing after the Exxon-Valdez incident. The fishing did improve but the long term effect is that there is very little or no herring fishing NOW in that area. We must look to the long term damage, not just to the immediate. To be sure the system will eventually probably recover but at what cost to the system and to the humans who are dependent on that system. We are all part of the environment and are all affected by any change to the environment. We need the oil, but at what cost?
I heard a rumor (And at this point, it is only a rumor) that this explosion was NOT accidental, but rather was perpetrated by extreme environmentalists. If this rumor was started by BP to deflect public criticism, then this would (and should) further damage any respectability that remains for their company. But if an investigation revealed that this wasn’t a rumor at all (and it IS something believable), then we would be adding MURDER to the mix. I hope this possibility is fully explored.
If there were private property rights and therefore incentive to upkeep the ‘natural habitat’ (to whatever degree) then these issues would not be problems, at all. This is especially true for the case of overfishing. As a landowner in Spain, I can attest to the fact that many landowners prefer to upkeep habitats friendly to a wide menagerie of wildlife, explicitly because they make a profit off hunting licenses and renting out their land to hunters. It is within the landowner’s interests to maintain a habitat friendly to relevant animals, because their income depends on this. The same would be true of fisheries. No fisherman is interested in having his stock be depleted; even fishermen and hunters think about long-term profits.
My reaction to this disaster was the same as Lew’s. Not only should we feel sorry for BP, the families of those killed, and the loss of wealth of BP’s stockholders, we all should understand that this disaster will become a very personal disaster for all of us. Immediately, the president halted all offshore drilling. That will mean less oil for our use in the future. Beyond this dictatorial and completely unconstitutional act, the environmentalists will succeed in stopping ALL oil exploration in the U.S. and as many “advanced” countries as possible. They may even manage to shut down existing, producing wells–you can’t be too cautious, right? The knee-jerk reaction to this is startling. Do we stop all highway driving when there is a fatal accident? How about stopping all plane travel following a plane crash? No, these are accidents, just as was this BP fire. If governments had allowed private ownership of the seas, this would be a very large liability case to be adjudicated by reference to common law. But, as Lew points out, since the seas are either “commonly owned” or owned by government, we will not resolve the consequences of this disaster in a rational, peaceful, and legal manner. We live at the birth of a new dark age, yet few realize it.
The article is spot on. And government will do what government does best…”
which is – “never waste a good crisis”.
Yet another example of vulgar libertarians apologizing for the fuckups of big business in America. Just imagine how Lew’s blood pressure would have went through the roof if he read the following, concerning a similar accident occurring under the direct control of a government:
“How about reality? The incident is a tragedy for the government and all the workers involved. It will probably wreck the government, a government that has long provided the fuel that runs our cars, runs our industries, and keeps alive the very body of modern life. The idea that the government should be hated and denounced is preposterous; there is every reason to express great sadness for what has happened.”
But simply replace “the government” with a nominally “private” unaccountable mass of capital that only exists due to perverse government interventions and subsidies and BAM! we should be THANKFUL for it. This is why no one takes libertarians seriously anymore. Our loudest mouthpieces are just apologists for big business.
So, if the owner of the rig or the reactor hasn’t the ability to reimburse me for the damages, I’m out of luck? And if the damages include my death, I’m out of luck?
My understanding of the non-aggression axiom is that it’s not okay to threaten others. Could one interpret the building of a rig or a reactor as a non-verbal threat to me and my property?
I’m not so sure, Jonathan, if as J. Murray argues a property owner has no right to an injunction against his neighbour. That is, the owner of an oil rig might have an accident, and wipe out the wildlife on adjacent property.
Paul, people also don’t take seriously those who use swear words (except for maybe George Carlin and Bill Hicks) as a rhetorical persuasion technique.
So if I did something stupid to injure or kill myself, and in the process also did billions of dollars worth of damage to other people’s property, I’m entitled to sympathy? Somehow, I suspect that if anyone besides rich people or a corporation were in this position, Rockwell would be screaming about “entitlement” and “victimology.”
As for the people who were killed, how is BP a victim? Were they shareholders or executives? The company probably has dead peasant insurance on them, so I’d guess right at this moment the CEO’s lighting a Cuban cigar with a $100 bill from the proceeds to celebrate.
“A guy whose car brakes fail and plunges into a crowd kill ten people and injures fifteen others isn’t a victim at all. He didn’t want the accident and sort of just ‘happened’ however he isn’t a victim and is liable and better start talking to his insurance company and lawyer.”
I think there is general principle of tort law that states that if you are not negligent, you are not liable. Obviously, in the above case the lawyers would go after Toyota.
So, the question is was BP negligent? This is hard to say since, even though they are in international waters, they are subject to regulation by the Federal Government. So It appears that the Feds dropped the ball again. The only effort we have seen has been speech writers, tele-prompters and talking point (orchestrated lies), from politicians looking for an election year issue.
We ought to feel sorry for Uncle Sam – taxes from oil make up a non-trivial portion of total tax revenue.
Feel sorry for BP? Hell no!! Those scoundrels, that is to say, the upper corporate management and the majority shareholders along with their Boards have been in bed, so to speak, with the military industrialists around the world killing millions of human beings in wars since the 19th Century.
What’s a few million barrels of oil spilled compared to the millions of gallons of human blood that they have helped drain? Millions of dollars, euros and sterling are spent by BP on every continent to spread their propaganda like all globalist corporate principalities. In this post modern world we must look not to “interventionism” as Rothbard and Mises rallied against but the intertangled web of corporate elitism gone amock with political hacks who do their bidding.
Today’s world is beyond mercantilism and commercialism. It supercedes the gilded age. While economic science, praxelogical models remain valid, we are unable to cut through the webs created in the 20th century to entrap and enslave all human action so that we are exploited, dumbed down and so terribly dependent on the nanny state that we are almost hopelessly trapped by these globalists.
But while hope springs eternal, the oil gushers spring louder and grimmier, killing ecosystems which are not just a mirage. Ecosystems do exist. They are a a reality that needs to be addressed because we humans depend on them for clean food supply as well as clean air. The killing of shrimp may not effect a vegitarian but it does effect those human beings that rely on the fishing industry for their livelihood. This is not a question of shifting jobs because technology has replaced the horse drawn carriage with the automobile or a hydrolic drill has reduced the number of men it takes to dig a ditch. The oil rig explosion is the cause of destruction of lives, food supplies, livelihoods of hundreds if not thousands of families as well as the ecosystem. Cry for the fishermen, cry for the families of 11 dead humans, cry for millions who have died in wars for oil (see “The Prize) and shed a tear for the appetites of millions that enjoy fresh shrimp and seafood from the Gulf.
BP will survive and they will morph into all kinds of energy producers, solar, wind, nuclear, etc. They already have their tentacles in China, Venezuela, and every other continent. Go to their websites. They have many. One can spend a life time trying to study their every aspect of economic growth, political entanglements. They are the monster that devoured Cleveland. Their only enemies are their partners in crime. Other globalists waring and bribing their ways as they devour the environment, workig with political cronies and governments throughout the world to throw you a bone now and then.
They will have you crying for them through millions of dollars of propaganda and they will contribute to the clean up but they will also continue to pay off politicians and contribute to the war effort when needed to secure an oil field in some land either near or far.
Cry for BP—hell no!! Hell No!!
Jerryhorse is spot on. One thing that frustrates me about many of the top dogs at the Ludwig von Mises institute is their defense of corporations which use government power, not to just get a tax or regulation break, but power for war and evil. BP is in bed with government, not for peaceful reasons, but for evil.
Please procede boldy AGAINST evil not FOR it.
While true, BP would still be liable for this damage, and the risk of liability makes BP more likely to make sure that these types of mistakes don’t happen.
Perhaps a reason to feel sad for them is that their financial loss is added to by the threats of regulators circling in the waters.
Didn’t this site used to say something like “post an intelligent and civil comment”? Paul is in danger of not meeting either of these criteria.
Why does Lew Rockwell see evil in government corruption, inefficiency, and bureaucracy, yet ignores the same in the private sector? He obviously is blinded to the reality of corporatism as much as he only focuses on the bad effects of government. So long as he remains blinded ideologically, he has little to no credibility.
For the record, I have full sympathy for the families, but no sympathy for the company. This is part of assumed risk that they take in the course of their business and it is fully right and natural that they assume all of the costs. It would be the same in Lew’s fictional Rothbardian paradise.
No. The attempt to seek a priori injunction is itself aggression, absent harm to which the one seeking injunction can point.
So Ken, if the probability of a major spill or nuclear meltdown were 50%, I should sit back and wait for the catastrophe to happen, and then sue — if I happened to be alive.
Ditto George! This is an incendiary and heinous article. The fact that BP and their contractor/agents performed no risk management for what has always been an obvious worst-case scenario is irresponsible on behalf of BP’s stockholders and man’s responsibiity to exercise proper dominion over the earth (the greater of the two shortcomings). Rockwell’s inconsistent reasoning and rhetoric are symptomatic of the major cancer in conservative circles……… one-sided agendaes and a lack of intellectual honesty.
Why in the world should we feel sorry for a business that screwed up? Ideally, such a disaster should bankrupt a company, cause their competitors to take notice, and push the industry forward.
But in the interest of having some serious discussion….
There are quite a few articles on the internet which make the claim that BP could have installed safeguards for this happening (which are required in regulations for other countries), but neglected to do so, and hence…..giant oil spill. As an environmentalist (I suppose I have to apologize for it on these forums), It’s a good narrative, but it doesn’t seem to make much sense. Even without regulations, the risk of a screw up like this is almost a death sentence to a company (even with limited liability), so why wouldn’t they have installed these safeguards anyways?
If anyone has any information concerning that, I’d be quite interested.
I am not a fan of the Government, BP, OR the Environmentalists. However to use the fact that someone is using an event to support their cause or case, to invalidate that cause or case, is a little much for me. If BP were doing everything they could to prevent spills, and certainly they are aware of auto-shutoff devices, then they would have installed an auto-shutoff device.
But since no-one has lamented poor BP’s problems, let me offer an insincere ‘boo-hoo’.
On the other hand, accidents and oil spills were a predictable consequence of offshore drilling. Our insatiable need for oil, our lack of responsible action to replace our dependence on it with more environmentally friendly sources, our insistence on being beholden to foreign nations that are not friendly to us, and so forth led to this state of affairs. When it was decided to allow offshore drilling, it was decided that there would be spills at unpredictable intervals, and that we would accept that. So personally, I fail to see why there is a halt to offshore drilling. The Government knew it would happen. It happened.
Have we changed our mind as a nation, and now will demand the removal of all the offshore oil wells? I think not. Will the environmentalists succeed in halting the drilling of new offshore wells? I think not. Will the Government use the event to increase Socialist Statism? Of course. Does the improper motivation of grabbing more power for its’ own sake invalidate the action, that offshore wells should be required to have auto-shutoff valves as they do in the North Sea? I think not.
All this belies the core issue, which is that since the early 70′s (FORTY YEARS) we have known that being dependent on oil was a really bad thing. Yet in all that time we have done nothing about it as a nation. Which means the Federal Government has totally failed in its responsibilities to the people, and needs to undergo a total overhaul.
Where did Lew argue this?
Of course it’s easy to blame the oil company. But the oil company wouldn’t exist without demand for oil from us, the consumers, who buy their products, either directly or indirectly (via oil-derived goods like plastics, or through transportation of goods, or through oil-fired power stations, or many other routes).
And we complain about the ever-rising price of oil, so we’re exerting bringing pressure on the oil companies to reduce their costs and cut corners where they can legally do so.
Perhaps the buck ought to stop with us.
Well, 50% of what?
Considering the nuclear death toll up to today, I think you would have to be an employee of the power plant company working next to the reactor core or maybe in the uranium mines to be in serious danger of harm. And, no, “one million dead due to Chernobyl” doesn’t count.
I’m not sure I would call BP a victim. I mean we have to determine the cost in terms of how one feels about the environment and figure that into the cost of the gas we pump at a BP gas station. I care about the environment, and although I don’t buy BP gas, if I did, then I would stop. If the market punishes BP then so be it, too bad. I don’t feel sorry for BP one bit. They made a HUGE mistake and as with any mistake one suffers the consequences and learns a lesson. I don’t really care what the government does, it is the same old story. Who knows; they could have subsidized the oil rig for all we know. All I know is that the only power we have as consumers is to figure up the cost of our purchases, and this greatly increases the “cost” of BP gas. I mean just admit it, they drilled into the earth and now its contents are gushing into our oceans, just admit that that does really suck. It just bothers me that the entire gulf is slowly being saturated with oil. Why, as Austrian theorists, do we feel the need to make excuses for corporations. They are, after all, limited liability corporations. Which just means that the responsibility is transferred from individuals to some brand name by which one can just go bankrupt and change their name, skirting personal responsibility. Corporations would not exist without the state. Corporations are just a group of individuals who receive certain immunities from the government. I don’t know why we can’t just stick to science and quit making excuses for corporations. There is no fine line between the government and the corporation.
If you were writing from a world in which your statement about government were true, you would probably not be writing at all but looking at some “preventive detention” or at the inside of a cattle truck for mouthing off about officials.
Steven, What if someone decided that the most you can do for the environment and for other people is to drive only on Tuesdays? Suppose they had hard evidence that this saves 5 human lives per year. Would that be a good idea?
Forget about oil spills and nuclear reactors. Let’s make it as abstract as possible. A neighbour is building something that, when completed, has a 50% chance of ruining me or my property within a year. And if 50% isn’t enough, make it 75%. And if that’s not enough, make it 99%.
At what point can I seek and obtain an injunction against my neighbour?
ABR – “Forget about oil spills and nuclear reactors. Let’s make it as abstract as possible. A neighbour is building something that, when completed, has a 50% chance of ruining me or my property within a year. And if 50% isn’t enough, make it 75%. And if that’s not enough, make it 99%.
At what point can I seek and obtain an injunction against my neighbour?”
Why not make it more abstract?….
Why does it have to be your neighbor?
Or, better yet, why ought it not be government…..yeah, that’s even better…..
“Forget about oil spills and nuclear reactors and neighbors. Let’s make it as abstract as possible. A government is building something that, when completed, has a 50% chance of ruining me or my property within a year. And if 50% isn’t enough, make it 75%. And if that’s not enough, make it 99%. At what point can I seek and obtain an injunction against government?”
There, now we have something interesting to consider.
At fifty-one percent…? hehe or is that too abstract of an answer?
Apparently Mr. Rockwell missed the lecture on ” tragedy of the commons ” in his undergraduate economic studies . The use this disaster to advance arguments against government regulation and portraying those who have caused it as victims is a breathtaking excercise in hubris and demonstrates an almost unbelievably twisted perception of reality.
Many of us didn`t miss that lecture (and many other lectures). But, many of us also didn`t miss the lecture in which the difference between common property and open access is specified. This lecture clarifies that common property is not subject to “tragedy of the commons“ whereas resources that are subject to open access (resources not owned by anyone) are.
BP a victim? They had an accident that caused an environmental disaster. They are being asked to pay for it. Sounds fair to me. I am an investor in BP stock. I want the company to do well… I will do well. But a victim??? What does that mean. They caused the problem however unintentional.
The Gov’t shouldn’t pay for this mess. BP should. What is unclear about that? How are they being victimized.
Fix the problem, find out what caused the problem, make corrections continue.
This isn’t a political issue it is simply a problem. BP caused it , they need to fix it. The oil industry and/or government need to work cooperatively to see that it “never” happens again.
We have twice the reserves of natural gas that the Saudi’s have oil. Why are we protecting the US oil industry?? Let them go on but let’s exploit natural gas. I am for a moratorium on oil and coal fired power plants and for natural gas powered plants,
Joe, read the article.
“The liability for environmental damage should be 100% at least.”
Read more: Feel Sorry for BP? – Llewellyn H. Rockwell Jr. – Mises Institute http://mises.org/daily/4331#ixzz0n6IpTlgo
That’s an awesome copy/paste feature!
So ABR, do you really think a project with a catastrophe potential of “50% or if that isn’t enough 75% or 99%” is going to be built in the first place? Tell me who has that kind of money; see, I got this bridge I need to move….
If you want to stop a neighbor from doing something that you think may harm you, you could always try doing it on the strength of your own convictions and with your own resources (you know, negotiate). If you’re looking for someone around here to grant you absolution for sending men with guns to do it for you, I hope you can hold your breath for a looooooooong time.
Okay, how about if a guy lost control of his car and smashed into a store window doing heaps of damage but no injuries or deaths – is he a victim? Nope, not but a long shot and he’s still liable for the damage.
“if you want not put prices on disasters what of the Bhopal incident of 1984?”
That was indeed a horrible disaster, but please keep a sense of perspective. The number of incidents of private corporations killing people and harming the environment are like a speck of dust in the wind compared to the magnitude of killing and pollution done by governments. A thousand Exxon Valdez spills and a thousand Bhopal accidents would not equal the environmental degradation and murders committed willfully and with utter impunity by governments in the 20th century.
If you wish to ensure your own safety and the safety of your family and neighbors then consider the odds. You are much more likely to be harmed by your own government than by any corporation no matter how greedy or negligent. To understand why this is so, it is necessary to grasp the essential fact that those in government generally profit from chaos and bloodshed, whereas corporations nearly always benefit from serving people and not by killing them or polluting their homes.
If government regulation slightly affects any industry negatively, it’s an intolerable injustice, but if a private business completely disrupts an entire coastal industry and ecosystem of a vast region we should feel sorry for them?
Compared to the many articles on this site angrily blaming government for messing with free-enterprise, the care-fee attitude of this piece is pretty disgusting.
perhaps you’d care to elaborate?
BP is a member of the capitalistic system which is a system of profit and loss. The loss part is arguably more important than the profit part as that’s what signals failure. Since BP failed and is now incurring a loss I fail to see how that in any way means I should feel sorry for them for simply being a part of capitalism.
Everything we do affects someone, either positively or negatively. Utilitarian arguments are not well suited to be used for ethical judgment.
Anyway, as I see it, the purpose of the question in the title was to open a different angle of looking at the problem. It would be silly to ask people to feel anything about anyone.
3 days ago …
The comments of this article are more enlightening than the article itself. Lew, I believe you should address these criticisms.
what, so one caricature is rebutted by another?
interesting to compare the emotional reaction towards disasters provoked by state agencies (new orleans’ dykes, where negligence was undoubtedly involved) and private-sector-bodies (how negligent was bp?), and likewise it will be interesting to compare the respective attempts at restitution.
anybody here think that bp will be more incapable of damage mitigation than was the government in the katrina debacle?
government are solely responsible for policy, war included. whether or not politicians allow particular interests to sway them is a different matter.
maybe we should cheer for chavez’ takeover of petroleos de venezuela. he sounds like a guy who respects the environment, certainly more than the evil bp.
Of course it’s easy to blame BP – it’s their cockup so they should be cleaning it up.
Lew, it’s precisely the reason I started the Ocean Stewardship Institute. The notion that the government can do a better job of being stewards of our precious waters has been proved a falsehood time and time again. However, I want to reserve judgement about BP’s victimization until all the evidence is in. their risk assessments were deeply flawed and as far as I’m concerned, they are one of many members of the Big Oil collective and their political stooges that have sabotaged humanity’s path of acquiring better alternatives than the black gold that has served us so well but is now too costly to drill for and too risky to rely on.
This story is just plain sad because generations of fishermen and women are being lost to ridiculous quotas and environmental sabotage.
“The notion that the government can do a better job of being stewards of our precious waters has been proved a falsehood time and time again.”
What rubbish! There’s nothing to stop people using the international waters as dumping ground so plenty of people do so. There’s also nothing to stop from people homesteading parts of the international waters if it weren’t for the fact that the ocean cannot be homesteaded because of its fluid nature. Government prohibition at least goes some ways in stopping people treating the world as a dumping ground. Such anti-government waffle really reflects a desire for people to get a free licence to wantonly pollute.
A bit beside the point, but let me just note that many of you believe you can claim some rights, for example, a right to live. Personally, after what I have seen in experience, I do not think I can rely on all humans to believe in my right to live. In fact, many times, those that possess most power to injure others often do not believe in your right to live (but they do not want to kill too many because then their constituents might start complaining). In that case, for my own purposes, it really does not matter whether I do have that right or nor (in some absolute sense). If I see that my life is being threatened by others, I will do my best to avoid that threat, but without the use of violence (nonviolence is my personal preference).
ABR, Ronald Coase makes a good case for reciprocity of harm but he also argues that the government should allocate property rights to minimize the collective harm. So, there is your answer. You can ask for injunction when someone who has the decision power thinks that the harm made to you is more important than the harm made to the one who needs to stop his or her project.
Even though we do live in a utilitarian world, I don’t think that’s a good theory of ethics.
The logic is that if the ocean was privately owned, a polluter would be liable for dumping on someone else’s property. I’m not yet fully convinced if it’s possible for the ocean to be fully privatized, but Peter is making a correct point in stating how government ownership of our oceans has led to poor stewardship.
Relating to this current situation, a privatized ocean would mean that BP would likely be more liable for the damaged they’ve caused. Parts of the ocean would be owned by the fishing and tourism industries (most likely environmental organizations as well), and these groups could ideally hold BP accountable for any damage they incurred from the incident. Full liability would also mean that oil companies would be more cautious about things like this happening (perhaps using safety mechanisms without regulations).
People can find a way to homestead just about anything, provided they are not actively prevented from doing so by an outside force. Property rights tend to evolve even when no central authority imposes them. Ireland (which operated largely without a state until being finally subdued by Cromwell) is one example. The Old West (before the organization of the territories and the formation of States by the US government) is another example.
Back to the point: whatever technical barriers there may currently be to homesteading the oceans can likewise be overcome, provided that it is allowed. And the resultant solution would work much better than the current system of state regulation.
Property rights over anything can be arranged once the benefits from instituting these rights become high enough compared to the costs. As the open access resource gets depleted, its marginal value increases, and thus the benefits from arranging some sort of ownership increase. At the same time, technological improvements reduce the cost of enforcing the rules of ownership. The invention of barbed wire was a classic example of a cheap way of enforcing property rights over roaming cattle.
Wow, this article sure blew the lid off the statist-left mouthbreathers. I’m having visions of Huffington Post bloggers’ heads exploding like the dude in the movie ‘Scanners’ — and I’m liking it. A lot.
Lew’s article here was fantastic, and no whining about “rich” or “corporations” can do anything to change that. He was NOT saying that BP was a victim — he was merely saying that they are indeed the greatest victim in a mistake that will cost them billions as well as their reputation.
If people want to prevent this from happening again, then privatize the oceans. The tragedy of the “commons” only occurs when “everyone” owns the commons (aka when government forcibly has it as public property). Keep in mind that it’s called the tragedy of the COMMONS, not the tragedy of private property.
Anyway Lew, great work.
Haven’t you noticed huge trash piles in the middle of the oceans that even governments don’t control?
No government is in control of the international waters therefore they have always been ready for homesteading yet strangely no one has taken up the opportunity, for some strange reason.
Yeah…because talking about privatizing the ocean is so Statist.
Once again…the victims are those who will be negatively affected and not receive just compensation (plus aquatic life in the gulf). Not BP…..
“He was NOT saying that BP was a victim — he was merely saying that they are indeed the greatest victim”
Is this newspeak?
I may not be a rabbit…but I am the greatest rabbit on this forum.
“Once again…the victims are those who will be negatively affected and not receive just compensation (plus aquatic life in the gulf). Not BP…..”
Losing billions of dollars AND your reputation doesn’t affect one negatively?
^Not newspeak, but a typo. I meant to write “the greatest loser” in this particular incident.
(And before you go medieval on my rear foaming at the mouth about peoples’ environment being hurt, I will add that yes others are being hurt because of the environmental damage, but it pales in comparison to billions of dollars in losses plus a reputation demolished).
“As an environmentalist (I suppose I have to apologize for it on these forums)”
Certainly not. Please try something in between that and patting yourself on the back for adopting this fashionable fetish.
Yes, BP will obviously suffer for this and they deserve to. BP faces a maximum liability cost of 75 million, while the cost to the fishing industry alone is estimated at 2.5 billion (possibly inaccurate of course, but it is an order of magnitude higher than what BP is likely going to pay).
I’ve seen no articles on here trying to arouse sympathy for GM’s poor business practices, or that of any other failing company. I’d hope most people on here would love to see GM finally accept bankruptcy and be replaced by a business that can sustain itself, and similarly, there’s no reason to feel bad for BP’s losses. Hopefully they either come out of this with better operating practices or a better oil company will take their place.
Lemmywinks, you say:
I’ve seen no articles on here trying to arouse sympathy for GM’s poor business practices, or that of any other failing company.
If you feel that strongly about the topics covered by the articles published here, I suggest you write one. I have no doubt that if you formulate a good argument, it would be published. And, even if it doesn’t get published, you can publish it somewhere else
My point was that I normally don’t see much apologetics for bad business practices here….and that’s a good thing.
Gill, you say:
What rubbish! There’s nothing to stop people using the international waters as dumping ground so plenty of people do so. There’s also nothing to stop from people homesteading parts of the international waters if it weren’t for the fact that the ocean cannot be homesteaded because of its fluid nature..
There is something that is stopping people from doing so – low benefits and high costs. But claiming that the costs and benefits of homesteading the oceans will always be in such a relation requires godly mental powers.
Very tenuous. A better example would have been Toyota. Oh, that doesn’t work for your purposes, does it?
And I, for one, am very sorry about what mercantilism and unionism did to America.
Lemmywinks, my interpretation of this article is that it is a reaction to the typical “evil big business” arguments. They are good when they bear all the costs of providing the goods and service we need. But when something goes wrong, they become evil and careless.
This morning I heard David Suzuki talking about the whole thing. It was his usual story. My answer to him would be – feel free to gather all those lovers of the environment, all those that “care about my grandchildren” more than I do, collect money, buy all the natural resources you want and then do whatever you want with them. Alternatively, buy all the oil plants and shut them down if you want. Even that would be better than listening to all the great ideas you have for other people to put into practice, generally under the threat of some new regulation.
Toyota is another good example
They made crappy decisions and got to suffer for it.
The best of all is that Bill Clinton, whose soldiers threw cluster bombs filled with depleted uranium into my back yard, is now going around with his environmental ideas. They are not asking why the cancer rate and birth defects in some towns in the “middle of nowhere” (i.e. where I came from) increased dramatically; or why children need psychological treatment for dealing with “irrational” fear of sounds that resemble fighter jets. Well, that’s all justified for the greater good. It really does not matter if some average Joe can’t have children because of your radioactive bombs. I had enough of their great ideas.
Right, and Lew felt sorry that they had to be subjected to an idiotic show trial before their natural inferiors.
They bombed the chemical industry and oil refineries. Does this qualify for an environmental disaster: http://www.youtube.com/watch?v=i_bC_ri7WKg ? Who will clean this up? No one ever showed up to clean up this mess.
That episode with the “regulators” lecturing the people from Toyota was tragicomical.
I fail to see how government can be held accountable the way a private organization like BP can.
Predrag, you’re just not getting it. I think it’s time for you to pay a visit to the Ministry of Love.
“But simply replace “the government” with a nominally “private” unaccountable mass of capital that only exists due to perverse government interventions and subsidies and BAM!”
This makes no sense. You have government on both sides of your scenario.
There is no need for that, since I prefer private provision of love, I’m o.k. without that ministry. Thank you for the advice though.
He argued that they should have to pay ALL the damages.
His point was that proper pricing of risk and whatnot due to the status of the ocean being non-property is the problem here.
You make a good point. Although I love the fact that both corps make cool stuff that I love, I always feel kinda iffy defending them seeing as how they actively try to use Leviathan for their own advantage.
Depleted Uranium aka DU rounds are fired exclusively from the A10 “warthog”. It’s a ground attack aircraft primarly designed to disable tanks and other armored vehicles. There have been a lot of studies which show that the dust from these rounds may cause cancer and such becasue the contain minute traces of plutonium (1ppb). No doubt climbing over the wreckage inhaling the dust from fragmented rounds can’t be healthy.
In any case it is a tragedy, but you also have to look at the alternative which may included the lose of your own life.
Actually that’s jsut the economic liability it does not include the cost of clean up.
Agreed. Notice that the big business hatred only extend (nowadays, and for the most part) to banks and health insurance companies — aka the ones that are given monopolies/oligopolies by the STATE.
They didn’t exactly pick their targets. Anyway, that’s all fine. I just wanted to show the underlying hypocrisy.
Victim, my b**tt.
BP ended up being a joke of a company and deserves to go bankrupt after fixing their mess.
BP is an embarrasment to the capitalism and the free entreprise. This is what happens when companies end up being that big and bureaucratic, where the decision making process start to behave in such inefficient and twisted ways that would embarrass the most inefficient minister in the least developed african country.
This is an obvious product of mismanagement from a bunch of j**ks in charge, who keep running the company by denominators…
Legislation should be made tougher against this irresponsible attitudes….
The ABC of any risk management tool should have identified this possibility. Obviously it wasn’t used or if it was, even worse. Whatever the case, BP’s directives were probably thinking too hard how to maximize profit by cutting in prevention thanks to the micky mouse laws against any damages produced, supported by the corresponding bribed politicians….
Phew…. have a nice death BP. Go to hell..
BTW, Mr. Llewellyn H. Rockwell Jr, probably had some oil-contaminated lobster before writing this ridicule article… I even thought of unsubscribing from this site… I thougt it was about free thinking, not brain-free propaganda…
That would require me to feel sorry for them because of the rules of the game they chose to play. I find myself unable to do that.
is irresponsible on behalf of BP’s stockholders and man’s responsibiity to exercise proper dominion over the earth
Gee somehow I’ll guess you’re not exactly all cut up about it are you? It all the more expensive and pointless to homestead the oceans when it’s all now a rubbish tip.
English is not my first language, but i am guessing that your question is – does that garbage in the ocean cause emotional discomfort on my part. First, I think we differ in our understanding of costs and benefits. Anyway, however scarce, the space in my value scale dedicated for discomfort about world issues is quite filled. I prefer talking about them over a beer (or some other beverage). So, if you ever end up in my area and feel like listening to some random guy’s take on the world in which we live, give me a call. But, if your question was only rhetorical, that’s fine too.
Anyway, mpolzkill,I’ll be in Denver this summer so you can use that opportunity to give me any other personal advice you might have.
Great, I’ll drink that beer with you if Gil doesn’t want to. (Your English is much clearer than Gil’s, btw) Send me a line on my link here and thanks for the great work you do for Mises.org and the cause of peace.
No problem; cheers!
Whatever the case, BP’s directives were probably thinking too hard how to maximize profit by cutting in prevention thanks to the micky mouse laws against any damages produced, supported by the corresponding bribed politicians…..
It looks more like they weren’t thinking hard enough. But, you know what they say – we learn all our life and still die stupid.
This all has been just a nightmare. We treat our planet worse than..than anything. The present doesnt matter, the future does.
Ken, how about a rocket aimed at my house? Should I ‘negotiate’ with the potential rocket-launcher? Sounds like extortion to me.
If my house burns down, I am still the victim of the house fire, even if I am fully covered by insurance and even (as if this were somehow demonstrably the case with BP) if some reasonable action on my part would have prevented it. The same applies to a driver who is in an accident – even if others are injured, he is still no less an accident victim, by definition. BP will bear substantial losses even excluding the costs related to taking responsibility for clean-up, etc.
It is interesting that you bring up the Bhopal incident as it is a classic example of how intervention in the marketplace can result in disaster. Even if the incident were an accident (actually, the best surmise is that it was sabotage), among the significant factors in the scope of the disaster was the insistance on regulation of storage tanks that required the company to contain substances in a markedly unsafe manner (safer methods would have violated the regulations) and the insistance of the Indian government that they, rather than an insurance company that would have a vested financial interest in preventing loss (and would have addressed many of the concerns at the faccility – including those that facilitated the disaster and still others) would provide insurance coverage. Finally, when UC initially began attempts to clean up the problem, Indian authorities began detaining US personnel and attempted to arrest the company’s CEO (who was trying to both clean up the site AND help those who were injured).
Bhopal is, from beginning to end, an example of government – rather than market – failure.
The odd thing is that there are at least two or three other companies that may have more culpability than BP in this case, and that if we can ever figure out what happened, it may be that this is an ‘act of God’ that simply could not have been prevented with the best, fully functional blowout preventer. It’s not like the oil industry isn’t the most regulated industry on the planet. (There is essentially not a single oil or energy-producing activity that can occur without either a Federal or state permit, and more often than not, permits from more than just one or two enitities.) Every rig in the Gulf has blow-out preventers, and are tested with high frequency. These tests show they have an exraordinarily low failure rate.
Meanwhile, government’s responsibilty, paid for with extra task-specific taxes on oil and gas, was to have a pre-approved plan and equipment in place to handle a spill in the gulf. They were supposed to have burn-off equipment in stock, ready to be used. However, the government failed to purchase this equipment, and has been quietly trying to get its hands on it since the ‘first day’ of the spill. This failure of the government WILL NOT be highlighted by the media, and the resulting loses to the coastal environment will not accurately be laid at the feet of the government.
The high cost of oil currently has one cause: government regulations, taxes, and impediments to both exploration and production. (This platform was an exploratory rig.) The price of oil is only going to skyrocket now, and that’s not even counting US dollar inflation. Meanwhile, China will have no compunction drilling for the same oil with even fewer safeguards.
On criticism, what is the equation vis-a’-vis the growing National Debt and deficits each year- to the economy— entitlements of 2.1 trillion yearly (beyond the grossly over inflated cost of Insurance companies, hospitals, pharmaceutical companies, etc.), and, PRIVATE BANK FINANCING the DEBT, (outside China’s Central Bank–and did the FED monetized our debt–by injecting US currency directly into China’s Central Bank where they turned around and purchase Treasury Notes: see: The New York Times op-ed article “The Great Wallop” by Nail Ferguson), RATHER THAN the FED being ordering to just print the 2.1 trillion dollars (as “an interrelationship”) for entitlements each year and inject it into the entitlements rather than make it as debt first (debt peonage), and them put the 2.1 trillion dollars into entitlements? What is the difference outside the Oligarchy of private banks benefiting first?
The irony behind this though, is that if the event really was an “act of god” and unpreventable it suggests the offshore drilling is inherently unsafe. It would be far better for the industry if it’s proven to be a preventable mistake.
“The high cost of oil currently has one cause: government regulations, taxes, and impediments to both exploration and production. (This platform was an exploratory rig.) The price of oil is only going to skyrocket now, and that’s not even counting US dollar inflation. Meanwhile, China will have no compunction drilling for the same oil with even fewer safeguards.”
Is there any evidence that our offshore drilling will lower gas prices a significant amount? American oil companies already own land with 34 billion barrels of undeveloped oil, which is not being exploited because current gas prices are too cheap. U.S. oil production already peaked 40 years ago, and the oil we drill here is going to be put on the global market (it’s not like U.S. drilled oil only gets used in the U.S.).
I understand the principle of being against such regulations, but is there any study showing a significant change in gas prices?
The following are few comments that I first tried to post here, and then copied to my blog / http://mises.org/Community/blogs/tokyotom/archive/2010/05/09/risk-shifting-bp-and-those-nasty-enviros.aspx. I can’t seem to find them here, so I am re-posting.
I see Stephan Kinsella has posted a response, here: http://www.stephankinsella.com/2010/05/09/tokyotom-on-risk-shifting-bp-and-those-nasty-enviros/
Lew, I largely agree with your criticism of government but some of your piece is simply confused.
1. “It should be obvious that BP is by far the leading victim, but I’ve yet to see a single expression of sadness for the company and its losses.”
BP is the leading “victim”? Victim of what/who? Sure, they’re a target (1) for all manner of evil people whose livelihoods or enjoyment of their property or common property are directly or indirectly affected by the spill, (2) for evil enviro groups (relatively well-off citizens who profess to care about how well/poorly government manages the use of “common resources” by resource extraction industries), and (3) for evil governments and politicians looking to enhance their own authority/careers. But these are all a consequence of the accident, and not a cause of it. Has BP been defrauded, tricked or strong-armed into drilling anywhere? Is BP the “victim” of its own choices?
Even if one concedes that some criticisms of BP will be unfair, how can BP possibly be cast as the LEADING victim – as opposed to all of the others whose livelihoods or property are drastically affected by this incident, which they had no control over whatsoever?
2. “The incident is a tragedy for BP and all the subcontractors involved. It will probably wreck the company”
The incident will certainly be costly for the firms involved, but the firms will survive the death of employees, and there is certainly very little risk indeed that BP will be “wrecked” by the spill. Far from it; it is unlikely that BP will even bear the principal costs of cleanup efforts, much less the economic damages to third parties that federal law apparently caps at $75 million.
Have you not heard of “INSURANCE”? A little thinking (and Googling) would tell you that BP (and its subcontractors) has plenty of it. To the extent BP is NOT insured, it has ample capability to self-insure, unlike all of the fishermen, oystermen and those in the tourist industry who are feeling significant impacts. Insurers will bear the primary burdemn, not BP.
3. “we might ask who is happy about the disaster: 1. the environmentalists, with their fear mongering and hatred of modern life”
Sorry, but this is perverse: enviros might feel that they have been proven right – and you might be annoyed that they can make such a claim – but they certainly aren’t “happy” with any of the loss of life, damage to property or livelihoods of the little guy (or of bigger property owners), or to a more pristine marine environment that they value.
“Hatred of modern life”? Surely any clear-thinking Austrian can see that, just as Austrians hate our modern kleptocratic, incompetent and moral-hazard-enabling government, many enviros are relatively well-off people who dislike how “modern life” seems to take for granted the way government-ordered “capitalism” enables a systemic shifting of risks from manufacturers to those downwind and downstream, and to all who enjoy what remains of commons or government-owned property.
Haven’t Walter Block, Roy Cordato, Murray Rothbard and others written about this? Or do “good” Austrians these days simply hate government, but love big corporations and banks, and the way government enables them to shift risks to the rest of us?
Your projection of happiness at damages to common resources/private property and hatred of modern life is especially perverse, given your own explicit recognition that government ownership/mismanagement of commons, and setting of limits on liability both skew the incentives BP faces to avoid damage, and limit the ability of others (resource users and evil enviros) to directly protect or negotiate their own interests. Why is the negative role played by government any reason to bash others who use or care about the “commons”?
We have seen Austrians – sympathetic to the costs to real people in the rest of the economy – rightly call for an end to a fiat currency, central banking and to moral-hazard-enabling deposit insurance and oversight of banks. In an April 9 post by Kevin Dowd on the financial crisis, we even had a call “to remove limited liability: we should abolish the limited-liability statutes and give the bankers the strongest possible incentives to look after our money properly” – but Dowd’s comments simply echoed in the Sounds of Silence. Why do you and others refuse to look at the risk-shifting and moral hazard that is implicit in the very grant of a limited liability corporate charter – not only in banking, but in oil exploration and other parts of the economy?
4. “The abstraction called the “ecosystem” — which never seems to include mankind or civilization — has done far less for us than the oil industry, and the factories, planes, trains, and automobiles it fuels.”
Frankly, this is nonsense. Austrians understand that focussing on the “ecosystem” is often an unhelpful abstraction and distraction from the fact that there are competing and conflicting interests held by people in resources that are not effectively owned or managed. The Austrian focus is on how to enable those with conflicting desires to coordinate their planning, not to engage in some muddle-headed balancing of collective “utility” that says one powerful group of users is “right”, so other claimants should be scoffed at and chased away.
And the “ecosystem” is what gives us air to breathe, water, food and a host of other things. Do you really mean to say these are relatively unimportant?
5. “the environmentalists went nuts yet again, using the occasion to flail a private corporation and wail about the plight of the “ecosystem,” which somehow managed to survive and thrive after the Exxon debacle.”
Seems to me your “facts” about the damage done by Exxon Valdez to the “environment” – including the small segments used by by man – and recovery/compensation are basically counterfactual:
Further, it seems you don’t have any real clue as to the escalating damage that man is doing to our shared ocean “commons”. These two TED talks might help open your eyes:
6. Finally, like BP, you have understated the degree of the oil leakage; BP initially estimated 1000 bpd, but later agreed with estimates by others that the leak is at least about 25,000 bpd, with risks of an even larger blowout.
Here’s to hoping for greater insight and more productive engagement from LvMI.
A lurking hater of mankind
Environmental Loss != Economic Loss
The two cannot be equated on any scale. I’m surprised that a libertarian can put a ‘price on life’, be it human or animal.
“The loss of fish and marine life is sad, but it is not as if it will not come back: after the Exxon Valdez disaster, the fishing was better than ever in just one year.”
That’s right, all other living beings on this planet are expendable and humans have the right to lord over them. We kill them by spilling oil into their living domain, but there’s no need for any ‘environmentalist’ to rehabilitate or fight for clean-up. The government will take the compensation from BP, but unless there are a few environmental activists around to ensure that this money is spent wisely, no real disaster management work gets done because marine creatures are ‘expendable assets’ which will be replaced anyway.
“The main advantage to the environmentalists is their propaganda victory in having yet another chance to rail against the evils of oil producers and ocean drilling. If they have their way, oil prices would be double or triple, there would never be another refinery built, and all development of the oceans would stop in the name of “protecting” things that do human beings not one bit of good.”
Oil is inherently priceless. The cost of oil reflects the production and transportation costs. If the cost of oil doubles or triples, more efforts would be taken to develop alternative fuels. Also, there is no substance to the stand that offshore drilling is keeping oil prices at their current level.
“I’m surprised that a libertarian can put a ‘price on life’, be it human or animal.”
Sure we can. For instance, duck breast magret goes for about $28 a pound, if you buy in bulk. Animal life is by no means priceless. The idea that it is priceless is ludicrous.
“Oil is inherently priceless.”
I think you mean it has no inherent price. “Priceless” means that people would pay any price for it.
“The cost of oil reflects the production and transportation costs.”
No, the cost of oil reflects the balancing of supply and demand. Production and transportation costs have to be covered for suppliers to exist, but that is not all there is to it.
“If the cost of oil doubles or triples, more efforts would be taken to develop alternative fuels.”
Yeah, so? This means that the cost of oil should be artificially increased, simply in order to encourage more politically correct energy sources?
“Also, there is no substance to the stand that offshore drilling is keeping oil prices at their current level.”
All supplies of oil, including offshore oil, contribute to keeping oil prices down by increasing supply. Getting rid of offshore drilling would reduce the supply of a commodity, which would definitely increase the price. Your knowledge of even the most basic economics is abominable.
The necessary condition for the existence of prices (i.e., exchange ratios) is ownership. Value and price are not the same thing.
The government has a horrible record with “environmental protection”. Federal lands have been used to test nuclear bombs, for over-grazing by livestock to the point of environmental degradation, and they have artifically lowered input costs/subsidized production which allow the overuse/abuse of lands for farming purposes, etc. Private property, with no government intervention, is kept up because property owners have incentives to maintain their land/property, and the owners will not tolerate degradation by someone else.
Many lefties would be libertarians if not for the economic ignorance, as many righties would be libertarians if they thought about anything other than themselves.
Obviously, Kashyap and TT are having a negative reaction to Lew’s rhetoric about ecosystems. I think Kashyap meant something like “how can you put a price on an entire link in an ecosystem”. You can’t (and I don’t think that even conservatives like Russ or Rush Limbaugh want to actually go about willy-nilly destroying them. They sincerely think they aren’t being destroyed, I think that’s the disconnect, TT). Enlightened libertarians are very concerned about pollution, that’s one of the reasons they want to eliminate the most wasteful entity on the planet: the State. Let’s start off by yanking away Russ’s security blanket, the overseas U.S. military: they have never been attacked unprovoked and yet, in their American mania for the pursuit of personal security through idiotic means they use more oil than a lot of entire countries do pursuing life.
(And the resultant rotten wars in the Middle East are a great cause of the higher oil prices)
It *is* terrible that the U.S. government and one of its junior partners in corporatism caused this disaster in the Gulf, Kashyap. You *are* correct, this disaster is bad for the economy. Lew was mainly addressing the pervasive and truly suicidal anti-business mentality, of course.
…not to mention the waste of state-subsidized petroleum, rife in the middle-east, venezuela, and anywhere oil has been nationalized. the real gas-guzzler accusation is best leveled at government.
“Environmental Loss != Economic Loss The two cannot be equated on any scale.”
What you fail to realize is that every action that a human being takes is the result of an economic calculation. Everything has a price, relative to each person’s subjective value. As an example, would you give away all of your possessions if it meant that you could save a single fish that would otherwise be killed by the oil spill? Ten fish? Ten thousand? As a dutiful environmentalist, I am sure there is some point where the amount of wildlife saved will give you a psychic benefit that is greater than the benefit you receive from having all your stuff. The main problem here is one of information, as it is nearly impossible to predict who or what will be effected by the spill, but to merely throw up our hands and declare that the damage is astronomically high and outweighs all possible human interests is lazy, alarmist, and hypocritical.
“The government will take the compensation from BP, but unless there are a few environmental activists around to ensure that this money is spent wisely, no real disaster management work gets done because marine creatures are ‘expendable assets’ which will be replaced anyway.”
I assert that the presence or absence of “a few environmental activists” will have no bearing upon whether or not the money will be spent “wisely”.
This statement is a common fallacy. To see why this is false, here is a quick thought experiment: An entrepreneur develops a new process for refining oil that cuts the total production cost to one-fourth, but only half as much fuel is produced from a given volume of oil. If all producers switched to this process, cutting their cost by 75% to produce half as much fuel (making the production cost of a given quantity of fuel half as much), what would happen to the price of fuel? Your statement, quoted above, says that the price should go down.
In reality, diminishing supply or increasing demand is what causes prices to increase. The market will clear at a particular price. If a firm cannot cover its costs at that price, it either takes a loss or leaves the market. If enough firms leave, the price will rise in response to the reduced supply, making oil production profitable again for those firms who hold out. By the same logic, when revenue exceeds costs, it creates an incentive for more producers to enter the market to cash in on the profits, bringing supply up and reducing the clearing price. Basically, you have the relationshop almost exactly backwards. The price of oil, as determined by supply and demand, is what determines how much cost firms can bear in the production of oil.
Alternative fuels act as substitutes for petroleum-based fuels. Just like oil, the supply and demand of these fuels determines the price point. At present, all of these fuels have a lower supply and higher cost of production than petroleum fuels. This means that unless the demand for them increases, production costs go down, or the price of oil goes up, it will remain unprofitable to produce them.
A laissez-faire economists looks at this situation pragmatically. If the cost of something is higher than the revenue, you simply don’t produce it. To do so is to destroy wealth and squander scarce resources. To the statist environmentalist, such an attitude is intolerable. This leads to various schemes to manipulate one of the factors I mentioned above. People are encouraged to pay more to buy alternative fuels to “save the planet”, they call for government subsidies to shift the costs of production elsewhere, or they try to limit the supply of oil. Subsidies are a particularly insidious choice, because they can create a huge amount of waste that is effectively invisible. The first option is the only one compatible with libertarianism, though the astute observer will note that it will not be easy. The third option will directly harm consumers of petroleum and industrial production in general.
I get a sense of desperation from mises.org these days. Most of this essay is obviously bunk, and that’s fine, but I suspect it was written to deliver this payload:
•the environmentalists, with their fear mongering and hatred of modern life, and
•the government, which treats every capitalist producer as a bird to be plucked.
It was time for a few shrill bullet points of mindless sloganeering. The mantra quota needed to be filled.
A useful post might ponder ways that in a fully deregulated society, a company would never be so stupid as to go operational without a plan for the most fundamental failure – loss of control at the wellhead. BP is still flailing around like the idea never occurred to them.
It should be obvious that this is an inefficient way of conducting business. So inefficient that it would be nice to somehow check that operations of this scale are not executed by abject morons, and if I’ve ever seen the three stooges, it was those clowns that ran the companies sitting in front of the House panel.
Quite frankly, I think it’s more aggravating that the Lew Rockwell crowd thinks it’s qualified to rebuke conventional medicine, because they denote AM as being libertarian and AMA/FDA as being the spawn of Satan. This dogmatic article isn’t any surprise either.
I would get the impression of a sense of desperation from Ackerman if I hadn’t already read hundreds of his mindless posts. They are mostly bunk, and that’s fine, but I suspect he writes them to deliver this payload:
He’s a real cutie-pie and incredibly brilliant.
It was time for a few off-the-hip ramblings. The drivel quota needed to be filled.
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Lew can write an article about anything he cares to, Einstein. This one was about the anti-capitalist mentality (and it *is* a real thing). *You* write one about how these corporatist stooges belong in front of the corporatist stooges who got stooges like you to vote for them.
that the ama has a spiked tail, cloven feet and a pitchfork indeed doesn’t make it the spawn of satan.
We’re aggravated that orthodox views (pro-government intervention) on everything dominate. That every failure in a society that is now government regulated beyond belief is invariably attributed by the press and the hordes to “not enough government regulation.”
He’s aggravated that the unofficial and unorthodox still get to make little peeps.
His side will continue to steal our money with ever diminishing returns (as this institute shows through history and theory).
I’d like to hear his definition of “dogmatic”.
“We’re aggravated that orthodox views (pro-government intervention) on everything dominate. That every failure in a society that is now government regulated beyond belief is invariably attributed by the press and the hordes to “not enough government regulation.”
He’s aggravated that the unofficial and unorthodox still get to make little peeps.
His side will continue to steal our money with ever diminishing returns (as this institute shows through history and theory).”
My “side” takes issue with sophistry; be it the critics of AE who don’t know their capital theory, or the armchair doctors with an a priori axe to grind.
“I’d like to hear his definition of dogmatic.”
A chow dispenser for puppies.
Alright doc, what dog do you have in the hunt? Where *do* you stand? In your opnion, do people have the right to hear the theories of quacks and even to consult quacks?
This looks like an elaborate straw man you’ve built against the “Rockwell crowd”, I guess I don’t have the time to unravel it right now.
Your defintions of “sophistry” and “dogma” are certainly unorthodox. I don’t care for that with English.
As always, concerns or objections are greeted with petulant zealotry on the Mises blog/forum. Ironically, there is a lack of knee-jerk bigotry at the oh so despised LL blogs. Personally, I think it reflects well on them, if you get my saying.
Yeah, thanks for answering my questions. No, I don’t get what you’re saying. So whatever other blogs you go to, you call them dogmatic bigots and idiots and then they join you for a chorus of Kumbaya? Good on ya.
What if BP is lying ? How will that be corrected in Rockwell’s imagined utopia ?
Your comment to this crude oily article is one of the not many sane comments here.
I really enjoyed reading it.
Especially citation 4 is such (crude) nonsense. If the environment (which can not be accounted for in terms of money or gold) is the basis to our life. If we destroy it we destroy the whole chain of economic activity that depends on it and one of our biggest food production capabilities.
And btw money is just a tool not a moral value. This world is much more than can be valued in terms of money and gold.
The ecosystem has done less for us than the oil industry??? Are you for real? What about your ‘food’, and that little thing called ‘oxygen’. Not to mention the fossil fuels (that’s fossilised organic matter y’know) that are, yes, a product of the ecosystem. Seriously.
He said, the “abstraction called the ecosystem, which never seems to include humans and civilization.” In other words, he’s talking about the purist “conservationist” sense in which modern environmentalists think of the ecosystem as some thing that is always destroyed by humans and would be better off if we didn’t exist at all.
It should be obvious that he didn’t mean the actual ecosystem in the real sense, as something that has some power to recover and is constantly under change from all forces that are apart of it, which does include humans and civilization.
It would truly be ridiculous if he did think that the ecosystem was not something that was important, but that’s definitely not what he meant and I think that was rather clear.
Excellent response. The problem with folks such as Rockwell and Rothbard is that when the discussion centers about the environment, they more often than not start spewing OPINIONS, not FACTS. Rothbard’s article in response to the Valdez disaster was insulting as well: “Well, hell, maybe a coating of black on blue waters provides an interesting new esthetic experience; after all, once you’ve seen one chunk of blue water, you’ve seen them all”. This comes off as some sort of right-winged lunatic diatribe that will not help to advance the libertarian cause. They might as well start criticizing “Jesus freaks” and Billy Graham for their ridiculous pro-life stances.
If the authors on Mises would instead expend their energy in formulating solutions on how libertarianism and environmentalism can co-exist, instead of attacking them, then maybe they’ll be taken more seriously.
It’s no secret that Lew Rockwell is in need of an editor. His blog could use some fumigation, as well.
has anyone that posts here been to the gulf area to actually view the spill or gush???
Fisherman’s wife breaks the silence :
So how long till Lew publishes his next moronic piece?
Hey Llewellyn, I’m going to bash your skull open with a goddamn rock and fucking eat what falls out. Hope it hurts.
It’s more than a little disappointing – given how serious the economic damage being wrought by the BP situation is, and the role of government and BP in the genesis of the problem – how unproductive this thread has turned out to be.
Here is more information and analysis for any interested Austrians out there:
My related blog posts (including comments on/links to posts by Sheldon Richman, Kevin Carson, Ed Dolan, Matt Yglesias, Scott Sumner and Shawn Wilbur) can be found here: http://mises.org/Community/blogs/tokyotom/search.aspx?q=bp
Roderick Long has links to various posts by others (Carson, Richman, plus Darian Worden, Gary Chartier, Alex Knight) here:
My posts on fish and ocean drilling are also relevant:
How do you think we’re going to have a good future, if we don’t act in the present moment? That’s all there is, is the present.
How does ONE well blowing out show that the entire industry is inherently unsafe? That type of reasoning was struck down by a federal judge today. He argued, does the whole airline industry need to be shut down after one plane crash? All oil tankers like Exxon Valdez? All trains? All mines? That’s not a rational position to take.
Respectfully your grasp of environmental problems seems tainted by your belief that we are all hapless victims of the state and/or collectivist democracy. If my neighbour is a psycopath and he calls me up one day to tell me my house is burning, I check to see if perhaps, today he is not being evil and is just pointing out something he observed. Just maybe, my house really is burning.
Environmental issues are real problems, it is disturbing to hear environmental concerns critized by otherwise logical people on the basis that the government sees the environment as something to be protected. Is that simplified libertarianism? If the government says so, its wrong, believe the opposite? You guys could save A LOT of typing if that’s the case.
On a related note, not everything a company does is correct, the entire idea behind a free-market is that the many, many, many, dishonest, ineffective, unethical companies will be rooted out by people’s freedom to choose. IT DOES NOT IMPLY THAT ALL COMPANIES BY SHEER MERIT OF BEING PRIVATELY OWNED ARE ETHICAL OR EFFECTIVE OR BENEFICIAL TO SOCIETY! If we are to feel sorry for BP, since they provided us with old furtilizer to burn and enough intervention of their own into our freedoms, we ought to feel sorry for the too big to fails too, they after all provided us with all that easy credit.
Walking in the prensece of giants here. Cool thinking all around!
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