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Source link: http://archive.mises.org/5725/austrians-on-the-environment/

Austrians on the Environment

October 8, 2006 by

John Brätland’s article on “sustainable development” in the QJAE recently came online. I would like to use this as an opportunity not only to highlight this important article but also to point out some of the major Austrian work on environmental issues.

Brätland’s article (pdf) deals with the economic theory of intergenerational sustainability, more popularly known as “sustainable development”. The red flags pop up right away for Austrians with this description by a proponent:

Fundamentally, “sustainable development” is a notion of… disciplining our current consumption. This sense of “intergenerational responsibility” is a new political principle, a virtue that must now guide economic growth. The industrial world has already used so much of the planet’s ecological capital that the sustainability of the future is in doubt. That can’t continue.

Brätland’s basic strategy is to deploy insights from the calculation argument against the neoclassical theory of Robert Solow and others. A few suggestive quotes from Brätland will, I hope, pique your interest in this excellent article:

The concepts of valuation, capital, and income only take on valid or coherent meaning in the context of individual action, private property and market exchange… The critical goal of legitimate sustainability is to establish an expanded system of private property rights that allows the owners to manage resources as capital assets. (p. 21)

…the ethics underlying the acquisition of private property is not even acknowledged in the economics of intergenerational sustainability. The entire resource base of the world’s society is implicitly under the control of some government making allocative decisions. (p. 22)

Without private property, monetary exchange, and capital accounting, no rational economics of asset maintenance could exist… The extent that individual business plans may conflict and be incapable of mutual success creates a barrier to aggregation or “macro-reckoning.” Hence, society or a government as its agent has no aggregated measure of capital for which it can legitimately presume to make decisions. (pp. 28,29)

…public control of resources in the name of “sustainability” is not only contradictory but also self-defeating. (p. 41)

I have recently mentioned the insights of George Reisman on natural resources, (see especially Ch. 3 of Capitalism (large pdf)). These bear a striking similarity to the non-Austrian work of Julian Simon, especially in his book The Ultimate Resource. It may be of interest to note that in an e-mail exchange shortly before Simon died, he told me of his sympathy for the work of Mises and the Austrians.

Murray Rothbard’s main contribution to this topic was his paper Law, Property Rights, and Air Pollution (pdf). There he extended his analysis on these matters enough to note the following in a 1985 preface to For a New Liberty: “Of my writings since [1978], the most relevant in expanding or developing ideas in this book have been The Ethics of Liberty… and ‘Law, Property Rights, and Air Pollution,’ which partially alters and develops my views on pollution law and the function of law generally.”

Finally, Roy Cordato laid out the basis for a comprehensive approach to this topic in his 2004 QJAE article Toward an Austrian Theory of Environmental Economics (pdf). Here he argues that “by bringing together Austrian concepts of costs and the praxeological foundations of economics we discover a unique perspective on pollution and the role of property rights in solving environmental problems. Furthermore by placing environmental problems within the context of personal and interpersonal plan formulation, we discover that they are not about the environment per se but about the resolution of human conflict.” (p. 3)

I have gathered Austrian resources on the environment in the Study Guide subject Natural Sciences and the Environment. If you know of an Austrian piece on this topic that isn’t included please let me know.


S. Reilly October 9, 2006 at 4:05 am

Good work! This article seems relevant, and has some useful references, though is not academic itself in the usual sense: http://mises.org/daily/1675 .

Roger M October 9, 2006 at 11:01 am

Well done. I especially like the attention paid to the fact that as socialists were drowning wtih the sinking of the USSR, they latched on to the plank of environmentalism to save themselves: “…global warming” has
become the central environmental thrust of a very powerful political and ideological
agenda. In part, this agenda has been advanced by what appears to be a systematic pattern of exaggeration on the part of “scientists” involved in climate research (Michaels 2004, pp. 5, 19–20).

The most important “asset” we can bequeath to the next generation is a greater respect for property rights.

The last part of the article on the clash between democracy and property rights is very important. The US started out with a republican form of government under the rule of law because the founders feared democracy (which they viewed as mob rule) as much as they hated tyranny. They intended the Constitution to put boundaries on popular democracy and thereby protect property. But as our society has come to commit idolatry by worshipping democracy, the Supreme Court has felt free to break down those barriers. The only redeeming quality of the Republican Party is that they tend to favor justices who will restore those boundaries and repair the Constitution which socialist and pro-democracy judges of the past have shreaded.

Roger M October 9, 2006 at 11:06 am

By the way, the latest issue of QJAE was a killer! I devoured most of the articles. Thanks so much!

Dennis Sperduto October 9, 2006 at 1:35 pm


I am employed as an analyst in the utility/energy industry (and have been so for 23 years), and from personal experience I can attest to the chronological correlation between the demise of the Soviet Union and almost all other centrally planned economies and the rise of the man-caused global warming hypothesis.

Also, in the mid- and late-1970s when I was an undergraduate majoring in geology, the major climate issue was that the earth was getting colder and another ice age was immanent, unless significant changes were made to the industrial economy.

chicken little October 9, 2006 at 1:58 pm

The only thing i’m interested in is: exactly where is the sky going to be falling? And in what size chunks?

Roger M October 9, 2006 at 2:58 pm

Dennis, Interesting. I was working for an electric utility in the 80′s & 90′s where I first learned about global warming. I mentioned on another thread that discussions about the science weren’t so politically charged until the late 90′s. I guess it had to do with the fall of the USSR and the socialist rush to rescue the movement.

Chicken, I’m with you. If you learn where the chunks will land, let us know so we can avoid those place!

iceberg October 9, 2006 at 7:26 pm

What I love mostly about “sustainability” arguments is how maintaining the exisiting environment and its inhabitant creatures (or some faeried vision of their past) becomes an end in itself, unquestionably more important than the value of human freedom.

That is of course besides the point that the only way we can ensure a “sustainable” environment is to treating property rights as absolutes and not letting individuals pass their costs onto others.

TokyoTom October 10, 2006 at 2:04 am

Stephen, thanks for these links.

It seems you missed Walter Block’s 1998 piece “Environmentalism and Economic Freedom: The Case for Private Property Rights”, http://mises.org/etexts/environfreedom.pdf.

I would also recommend the property rights approaches to environmental problems persistently proposed by the two think-tanks founded by John Baden (Mount Pelerin Society member): FREE: http://www.free-eco.org/about.php and PERC: http://www.perc.org/about.php?id=700. PERC is now run by Terry Anderson, who has quite a few well-known books and essays on free-market environmentalism and property-rights approaches.

Both have lots of useful work on fisheries, forests, game management etc., and PERC has this relatively thorough work on global environmental problems: Html
Property Rights Solutions For The Global Commons: Bottom-Up Or Top-Down?

While Braetland essentially just throws up his has in the case of climate change (“But in considering policy options from within a menu of solutions consistent with “calculational foundations”one must first of all acknowledge that the atmosphere cannot be owned; no legitimate means are available to create property rights in the atmosphere. Beyond the tort protection from invasive pollution, it is not clear that much can be usefully added.”), the piece by Anderson is more forthright about the difficulties in finding a pure Misean solution:

With cases such as global warming and ozone depletion, however, Trail Smelter-type adjudication may be difficult. For example, proving harm from global warming may be difficult, because, at present, science is inadequate to provide conclusive evidence regarding whether global warming is even occurring and, if it is, to provide the cause of and possible harm caused by global warming.

Yet, even if these issues are resolved, the transaction costs to identify each and every party harmed and causing harm would be prohibitive. Nearly every production process on the planet uses some form of carbon-based energy, and according to global warming proponents nearly everyone would suffer some harm from global warming. Who then is to bring suit and who is to be blamed? Can everyone sue everyone? Specifically, how do we know that a particular coal plant is causing your beachfront property to be gobbled up by the sea?

Since Dennis and Roger seem interested in how science has become politicized, I offer this to them: Myanna Lahsen: Technocracy, Democracy, and US Climate Politics: The Need for Demarcations.

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