Wednesday, March 20, 2013

Free-Market Environmentalism

Critique of free-market environmentalism

Going With the Flow:
Expanding the Water Markets

by Terry L. Anderson and Donald R. Leal

Terry L. Anderson and Donald R. Leal are associates of the Political Economy Research Center in Bozeman, Mont. This paper is excerpted from their forthcoming book, Free Market Environmentalism. Anderson is also the author of Water Crisis: Ending the Policy Drought (Cato Institute, 1983).

This is C Stoll’s preliminary critique:

Not to put too fine a point on it, this  essay bears all j symptoms of being a bunch of dogmatic trash and propaganda. Heavy on slogans but no analysis of the economic facilities. “Oh, wouldn't it be wunnerful if everybody  could decide by themselves how much water they’re going to  use and for what?”

I grant it may have some advantages if you want to seize collective property and transform it into private property. The argument in favor of market solutions is only as strong  as the guarantees you offer that the market  will be competitive and not subject any participants to exploitation. But allocative efficiency is only one of many sorts of efficiency, and when measured by the other sorts of efficiency the market solution  stinks. If you claim otherwise, prove it.

Or let's put it another way: if you want citizens to control society’s assets, how come you don't propose more citizen control and participation, and public debate on environmental decisions, electoral and review mechanisms that exert effective control over the bureaucracy? Why do you never call for democratization of public life? Why do you detest the concept of collective decision-making?  Why does everything have to be decided by some so-called “individual”? Especially when it turns out that that individual is Rupert Murdoch, say, or Honeywell International.

Tell you what, if you (1) show me why public ownership is bad, I’ll accept your argument. Also you must guarantee that the market solution will be equitable, and not allow resources to be hogged by a few fat-cats.

Furthermore  you have to decide what the technical requirements for a free-market  are. A freer market in water requires an efficient transport system for water. Who builds canals? The government does.  Is that accidental? No, it isn’t.

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