Filed Under: Headline • The Calling
Tags: environmentalism • free market • sustainability
Sustainability: Not Just for Environmentalists
It has a friend in markets.
Busybodies, left and right, seem extraordinarily talented at coming up with buzzwords to justify imposing their visions of a better world at the cost of our freedom. Environmentalists are a good example.
The latest in environmental buzzwords is “sustainability.” Of every act we take with respect to the natural world we must ask: Is it “sustainable”? My university even has a position devoted to overseeing its environmental sustainability.
Conceptually, there’s nothing wrong with the idea of sustainability. Even though it is rarely defined rigorously by its supporters, it seems to mean something like: “making sure we leave enough for future generations.” That vagueness is a reason why it makes such a good buzzword: Who is against ensuring that we don’t exhaust resources and leave future generations with nothing? Of course, libertarians have raised a number of objections to the means by which many environmentalists would try to ensure that we treat nature sustainably. It’s not at all clear that free markets are the enemy of the natural world — and even less clear that government is its friend.
What is interesting is that environmentalists who are hostile to markets are blind to how they embody concern with sustainability. In a Freeman article awhile back I made a similar point about how economists and environmentalists talk past each other about the idea of scarcity. Much of that argument applies to sustainability.
Get Rich Quick
Many environmentalists apparently assume that owners of resources in a free market have an incentive to use them up as quickly as possible for short-run profit, with no reason to care about their long-term sustainability. What environmentalists miss is that in a competitive market the price system informs us if we are behaving in an unsustainable way and provides us with the incentive both to restrict our use of resources and to search for substitutes. When the supply of a resource becomes more scarce relative to demand, its price rises. This signals to users that the good is more scarce and provides an incentive for them to reduce their quantity demanded, which “sustains” the resource in ways that would not happen without the price signal. The rising price also encourages entrepreneurs to look for substitutes, which will also make the original resource use pattern more sustainable.
Beyond that, the process of finding substitutes promotes “sustainability” by providing new ways of solving old problems. One of the problems with the standard environmentalist view of sustainability is that it is overly static and seems to assume that our goal should be to ensure that current patterns of resource use are sustainable into the indefinite future. The only way to achieve that goal would be to limit innovation and thereby dramatically reduce or reverse economic growth, impoverishing billions. By contrast, the economist’s conception of sustainability is more dynamic and recognizes that the goal is not to sustain a specific pattern of input use, but to create an institutional environment in which human beings can respond to changes in the demand for and supply of resources in ways that ensure their wants can continue to be satisfied at progressively lower cost, leading to the enrichment of all. It is free markets that create exactly this institutional environment.
One last aspect of sustainability has to do with the role of government. Both Ludwig von Mises’s theory of interventionism and the Austrian theory of the business cycle have at their theoretical core the idea that government intervention in the market leads to patterns of activity that are not sustainable. Intervention creates unintended consequences that tend to lead to more intervention, which itself creates more problems. Inflation creates a pattern of capital use — the boom of the business cycle — that will eventually collapse for lack of real resources. The current recession is the result of government-caused unsustainability.
The lesson for environmentalists is that they should see free markets as friends of sustainability and at least consider that, at both the microeconomic and macroeconomic levels, government intervention is sustainability’s enemy.
Comment by James Smith on 29 July 2010:
Hi:
It would be really great to see positive examples of the way those who support the ideals of healthy relationships between strong and free and responsible people have created a beautiful world.
Enviornmentalists exist mostly because the world was getting polluted to death in the mid to later 20th century. It matters not why. Anyone would be asking to die not to have resisted industrial waste pouring into every major fresh body of water. They were right in intent and in assessing a problem. If we agree so far, then simply show the way those who support freedom are both being free, responsible, and profitable in real time.
I am convinced of the freedom route and free markets (which never existed and may never due to human nature) but believe our job is to show it working. Conscious capitalists are the only ones who come even close. More than close. We are doing it.
Jim
Comment by Kwanijml on 29 July 2010:
Great article! sustainability and efficiency in the economic sense almost always correlates directly with sustainability and efficiency in our environment and use of natural resources. It’s not that hard to see the effects of one on the other.
For example: from Dr. Mary J. Ruwart’s book entitled ‘Healing Our World’ – “when subsidies decrease, conservation automatically follows. In Seattle, during the first year that customers were charged by the volume of trash they generated, 67% chose to become involved in the local recycling program. (8) Since about 18% of our yearly trash consists of leaves, grass, and other yard products, (9) composting coupled with recycling can dramatically lower a person’s disposal bill. As less waste is generated, fewer resources are needed to dispose of it. What could be more natural?”
This was of course a very direct example. . . but it doesn’t take a lot of effort to learn how even increased efficiency in the manufacturing and delivery of everyday items that we use, in turn, means greater conservation and more efficient use of natural resources. That’s why they’re called commodities. . . they generally don’t change in value, and so if a manufacturer somehow lowers the cost of their product, it means that they would have had to somehow start using less of one or all the commodities that they use in fabricating their product. Only the free market consistently produces the incentives and competition to continually reduce prices through innovation. Keynesians and population control advocates, alike, fail to inject ‘innovation’ as a variable in their forecasts. . . completely ignoring historical improvements we have made in how we use our resources.
Comment by Nicole on 30 July 2010:
This article talks about the concept of sustainability in a very fair and thoughtful way IMO, and so do the two comments posted so far. It is true, unfortunately, that most environmentalists these days have a much too static picture of what sustainability means, and have an undue faith in government as the means of addressing their concerns.
And unfortunately most of the reaction against environmentalism from conservatives and vulgar libertarians also assumes this static perception, hence all the polarization and talking past each other, which is exactly the kind of “divide and conquer” effect the global power elites want.
Some of the more peacefully anarchic subcultures within the environmental movement at large are moving away from the word “sustainability” because of the issues mentioned above, and now prefer the more dynamic “resiliency”. Maybe that can also help with the very necessary reconciling in the public perception of free market and environment.
I still think “sutainability” is a good word,worth saving from slipping irretrievably out of English and into Newspeak, though it would be nice if we could come up with a less fuzzy definition that takes the dynamic aspects into account.
But that might get us into the qualitative vs quantitative epistemological debate, which currently remains another culture barrier along roughly the same lines. That one also needs reconciling urgently!
Comment by Steve Farmer on 30 July 2010:
Great article and commentary. As a supporter of hunting rights and the 2nd amendment, I see a correlation with this articles premise to the way many well-meaning environmentalists and animal rights groups oppose gun, hunting and fishing rights; as they tend to see us as bloodthirsty wasters of life rather than the stewards of the earth and it’s wildlife that most of us are. You will not see a more enthusiastic interest in sustainability than that which beats in the heart of every true hunter and sport fisherman. And many of those same outdoorsmen and women operate businesses, employing people, that revolve around helping to ensure a pristine environment and well-managed, healthy wildlife that is sustainably harvested; and that bounty productively used and enjoyed as nourishment. They do this for themselves, their customers and clients; and most importantly, their posterity. In doing this, they usually pass along, foster and sustain: the wisdom and skills earned from generations past on how to accomplish these tasks of life; a healthy reverence and respect for the land and its bounty; and spark a self-sustaining appreciation of the importance of being a good steward of nature. The circle of life is an awesome thing when it is allowed to operate as nature intended without undue interference.
Unfortunately, some groups have twisted what probably started out as their well-intended environmental concerns into a fanatical, fascist-like zeal for government intervention and regulation through their progressive political agenda. In the process, they are achieving the very opposite of their desires and alienating those very people they should be learning to communicate with; and develop a cooperative, working relationship with, in fostering a healthy, sustainable environment that we all can enjoy, in perpetuity.
In addition to this, we have power hungry progressive elitist politicians who feel they have a both a moral mandate to tell us how to conduct our lives, and superior knowledge on how to order the course of nature and humanity. All while engaging in petty political games and attacks, sniping at each other as they do their best to keep us all divided and at each others throats, rather than working together to find common solutions to the universal desire for life, liberty and the pursuit of happiness. Are there no leaders left, no patriots? May freedom, Constitutional liberty and free markets reign again! Remember this November! Get involved and choose wisely!
http://www.freedomworks.org/
Comment by Jacob Steelman on 30 July 2010:
It is quite clear that the free market (including free market property rights) are not the enemy of the natural world and allocate resources in the most efficient manner demanded by consumers. It is also quite clear that government is the enemy of the natural world in that it allocates resources in the most inefficient manner. Let private property rights prevail and the effects of the commons will be gone. What everyone owns no one owns.
Comment by Placebo on 1 August 2010:
Interesting article. A real free market, though, would entail pricing in all the externalities. For example; the cost (today) of cleansing a ton of CO2 from the atmosphere is roughly 200$. The current production mix of crude oil produces 317 kg of CO2 per barrel of crude. So what happens, is that we subsidize the oil companies with 63.5$ per barrel. The average price of a barrel of north sea oil in 2009 was 55$…..
This level of “subsidies” ensures that new cleansing technologies, alternative sources of energy, or plain energy saving scemes lose out due since it’s apparently not cost- effective.
(sorry for any linguistic errors, I’m not a native english speaker)
Comment by Jim Henshaw on 2 August 2010:
Placebo said: “A real free market, though, would entail pricing in all the externalities. For example; the cost (today) of cleansing a ton of CO2 from the atmosphere is roughly 200$.”
CO2 production is not an externality to be “priced in”. CO2 is a plant food. Without CO2 virtually all life on earth would die, first plants and then the animals that feed on plants.
For those who claim that warmer weather would be disastrous — I live in Hawaii, where temperatures are much higher than the worst case scenario for AGW for, say, Seattle. And yet tourists flock here because of the weather.
Comment by Steven Handel on 4 August 2010:
I would love to see a legitimate movement of free market environmentalists. Of course the environment is worth preserving, and market incentives, uninhibited, tend to encourage individuals to protect natural resources.
Walter Block adds some good input on this on YouTube.