Capitalism Works With Environmentalism

Capitalist societies are much better able to deal with their own problems as it relates to the environment, utilizing ideas and practice based on liberty rather than governmental control, as this excellent article from The New Atlantis notes.

An excerpt.

Human activity is remaking the face of the Earth: transforming and polluting the landscape, warming the atmosphere and oceans, and causing species to go extinct. The orthodox view among ecologists is that human liberty — more specifically economic activity and free markets — is to blame. For example, the prominent biologist-activists Paul and Anne Ehrlich of Stanford University recently argued in a British science journal that the environmental problems we face are driven by “overpopulation, overconsumption of natural resources and the use of unnecessarily environmentally damaging technologies and socio-economic-political arrangements to service Homo sapiens’ aggregate consumption.” The Ehrlichs urge the “reduction of the worship of ‘free’ markets that infests the discipline” of economics.

But the notion that economic activity and free markets are antithetical to the flourishing of the natural world is complicated by the fact that the countries with the biggest environmental problems today, and the least means and apparent interest in addressing them, are not the liberalized ones with advanced capitalist economies but the ones with weak or nonexistent democracies and still-developing economies.

So is it really the case that liberty and the environment are simply opposed? Does the good of one come only at the expense of the other? Or can liberty and a flourishing natural environment reinforce one another, the good of one encouraging the good of the other? Can economic activity under a system of liberty be environmentally sustainable in the long run?

“Natural States” and the Environment

To better understand the ways in which the natural environment fares differently under social orders with more or less liberty, we will have to consider the broad sweep of time, from prehistory to the latest modern developments to projections about the future. A conceptual framework very helpful for making such generalizations can be found in Violence and Social Orders, a brilliant 2009 book by Nobel laureate and economist Douglass C. North, University of Maryland economist John Joseph Wallis, and Stanford political scientist Barry R. Weingast. The book begins by noting that violence is the central problem confronted by societies encompassing more than a few hundred people. In prehistoric times, when subsistence depended on hunting and gathering, humankind was organized in small groups based on family relations or small tribes; face-to-face interactions and personal trust were possible, and indeed necessary for keeping peace. The authors call this way of organizing society the “foraging order.”…

The move toward a mutually beneficial relationship between liberty and the environment is not entirely neat, nor will it alone suffice to address all of our looming environmental challenges. For instance, even where there is evidence that the Kuznets Curve applies to certain measures of environmental quality, like sulfur dioxide emissions, the reductions in emissions were generally not the result of trading well-defined property rights in markets. Moreover, the Kuznets Curve may take too long to kick in where it matters most. The 2011 meta-analysis suggests that the turning point for carbon dioxide emissions will occur at about ten times the 2007 level of global GDP per capita, a point that probably will not be reached until the next century. The researchers conclude that economic growth alone will not reduce emissions enough to ward off potentially disruptive climate change.

These findings point not toward breaking but strengthening markets: we need to institute mechanisms that allow markets to price in global externalities, bringing to bear the forces that have worked so well for costs that are already internalized to property owners, like local land loss and pollution cleanup. How this will work in practice is a subject well worth debating. But those debates should begin with the following fundamental points of agreement, drawn from history and economics. Free markets are the most robust mechanism ever devised by humanity for delivering rapid feedback on how decisions turn out. Profits and losses discipline people to learn quickly from and fix their mistakes. By contrast, top-down bureaucratization tends to stall innovation and to make it more difficult for people and societies to adapt rapidly to changing conditions, economic and ecological. Centrally planned economies fail; centrally planning the world’s ecology will fail as well. Our aim must be to find ways for liberty and the environment to flourish together, not to sacrifice one in the vain hope of protecting the other.

Retrieved November 14, 2014 from

About David H Lukenbill

I am a native of Sacramento, as are my wife and daughter. I am a consultant to nonprofit organizations, and have a Bachelor of Science degree in Organizational Behavior and a Master of Public Administration degree, both from the University of San Francisco. We live along the American River with two cats and all the wild critters we can feed. I am the founding president of the American River Parkway Preservation Society and currently serve as the CFO and Senior Policy Director. I also volunteer as the President of The Lampstand Foundation, a nonprofit organization I founded in 2003.
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