A SPONTANEOUS ORDER, POLITICS/ECONOMICS

A Spontaneous Order: Free Market Environmentalism

By RadCap
March 7, 2018

Consider purchasing a copy of A Spontaneous Order: The Capitalist Case For A Stateless Society

It is often thought that free enterprise is somehow at odds with environmental preservation. That is to say, there is an argument that one may only be able to profit financially through the consumption, depletion, and exhaustion of the Earth and its precious resources. This philosophy is applied to the whole spectrum of environmental concerns ranging from atmospheric integrity to the preservation of the myriad of species in the animal kingdom. The primary suspects for such poor stewardship of the earth go by many names, but supposedly involve the same concepts: capitalism, money, profits, greed, industry, and private property itself. The consensus tends to be a beckoning for the State to regulate and temper such environmentally-destructive free enterprise behavior through the imposition of taxes, regulations, fees, licensure, and downright prohibitions. It is thought only by superseding the property rights of others can the Earth and its species be protected from the pursuit of our myopic and petty self-interests.

Contrariwise, free enterprise and market activity are not the primary culprits of environmental waste and degradation. In fact, it is through these mechanisms that men may best coexist with the Earth in harmony.

The Tragedy of The Commons

One of the more salient concepts to understand when discussing environmental trauma is the tragedy of the commons – a situation in which untrammeled public use of a resource reduces its value to each user. To illustrate this, suppose a teacher throws a pizza party for her class and buys each of her students a personal pan pizza and a can of soda. Presumably, the children would proceed to consume the soda and pizza at a leisurely rate based primarily on hunger. In another case, instead of the teacher offering each of her students their own cans of soda and personal pans, she purchases three large pizzas and six liters of soda and places no restrictions on how much they may each eat or drink. Are the children more inclined to consume the pizza more slowly, at the same rate, or more quickly? One does not need to be an economist to answer this question; the children, other things being equal, will tend to consume these goods more quickly. Sally knows that for every slice of pizza and ounce of soda the rest of her peers consume, there will be less pizza and soda for herself. Sally is not alone in this understanding, however. Most of her peers are also aware of the opportunity costs of eating pizza and drinking soda at a leisurely rate. The resulting effect is a classroom of kids who are now consuming their treats at a much faster pace than they otherwise would have with regards to their own individual servings. Tragically, this may also preclude many of them from being able to enjoy the pizza and soda as much as they otherwise would have. Ludwig Von Mises describes the tragedy of the commons by using the examples of publicly owned land and waters:

If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the re-population of the hunting and fishing grounds.[1]

Private owners of land and other scarce resources have a direct incentive to maintain and improve their capital value as they stand to personally and directly benefit from the value the goods retain. For instance, it is often in one’s best interest to maintain his home in good quality in the event he desires to sell it or pass it down to his children. The home itself may be more beneficial if its integrity is maintained. Conversely, a politician who has temporary control over a given set of resources – but has neither the right to sell or pass down the resources for personal/familial gain nor does he suffer substantial consequences for their abuse – will be more inclined to exploit those resources for political advantage with relatively less care for their future capital value.

Easements

When one homesteads unowned land, he is not merely conferring to himself exclusive right to occupy a certain space, but also, in his use of said good, he is acquiring rights to do with it as he wishes given that the activities performed do not involve uninvited physical interference with the property of others. To illustrate this, suppose John homesteads or purchases a plot of land and decides to start a rock band which, at the time, does not cause uninvited physical interference with the property of others. He is, say, too remote to have any effect on his neighbors. By doing so, he earns the right to produce the level of noise associated with his band on his property, despite the fact that the noise may traverse beyond the physical boundaries of the property itself. Such a right is commonly referred to as an “easement.” Now, suppose Sue purchases property adjacent to John’s and complains about the excessive noise. Of course, Sue is free to request that John keep the noise down or that he only perform at certain times, but from a libertarian standpoint, she would have no legal grounds to forcibly stop John from producing the noise his band generates. As John was within his rights to play music when he had no neighbors, he developed an easement where he previously acquired the right to produce such noise by operating his rock band prior to Sue’s moving next door. The same methodology may be applied with air, water, or any other form of pollution. If a factory was polluting the air of a surrounding area prior to a residential community being established in its vicinity, then the residents of said community would have no just legal grounds to force the factory owner to halt the practices of his factory.

However, in the case of John and Sue or of the factory owner and the residential community, if John begins to produce more noise than he was prior to Sue moving in next door or if the factory produces more pollution after the residential community was established, then both Sue and the residential community would have solid legal grounds to acquire an injunction against John and the factory respectively for the amount of noise and air pollution that is being generated in excess of their easements. Hoppe iterates the concept in a slightly different way:

Another, equally common misunderstanding of the idea of private property concerns the classification of actions as permissible or impermissible based exclusively on their physical effects, i.e., without taking into account that every property right has a history (temporal genesis).

If A currently physically damages the property of B (for example by air pollution or noise), the situation must be judged differently depending on whose property right was established earlier. If A’s property was founded first, and if he had performed the questionable activities before the neighboring property of B was founded, then A may continue with his activities. A has established an easement. From the outset, B had acquired dirty or loud property, and if B wants to have his property clean and quiet he must pay A for this advantage. Conversely, if B’s property was founded first, then A must stop his activities; and if he does not want to do this, he must pay B for this advantage. Any other ruling is impossible and indefensible because as long as a person is alive and awake, he cannot not act. An early-comer cannot, even if he wished otherwise, wait for a late-comer and his agreement before he begins acting. He must be permitted to act immediately. And if no other property besides one’s own exists (because a late-comer has not yet arrived), then one’s range of action can be deemed limited only by laws of nature.[2]

Trespass and Nuisance

Unbeknownst to many self-identifying environmentalists today, much of the pollution that occurs would be prohibited in a free market society as such pollutants would be considered a violation of property rights on the grounds of trespass or nuisance. William Prosser identifies the distinction:

Trespass is an invasion of the plaintiff’s interest in the exclusive possession of his land, while nuisance is an interference with his use and enjoyment of it. The difference is that between… felling a tree across his boundary line and keeping him awake at night with the noise of a rolling mill.[3]

Indeed, both nuisance and trespass cause uninvited physical interference with the property rights of others. The simple upholding of private property rights is the legal defense against much of the pollution decried by modern day environmentalists. It is indeed the State’s monopolization of the legal system and its refusal to uphold private property rights that is the cause of most the environmental destruction witnessed today. A commonly cited reason for such deviations from private property protection against third parties is to favor the “greater public good which may be diminished if such private property rights were upheld absolutely.”

Murray Rothbard explains why trespass and nuisance are indeed violations of property rights, and conversely why certain other invasions of ones property by particles or energy, which are undetectable by the senses and produce no harm, do not constitute such violations:

First, a direct trespass: A rolls his car onto B’s lawn or places a heavy object on B’s grounds. Why is this an invasion and illegal per se? Partly because, in the words of an old English case, ‘the law infers some damage; if nothing more, the treading down of grass or herbage.‘ But it is not just treading down; a tangible invasion of B’s property interferes with his exclusive use of the property, if only by taking up tangible square feet (or cubic feet). If A walks on or puts an object on B’s land, then B cannot use the space A or his object has taken up. An invasion by a tangible mass is a per se interference with someone else’s property and therefore illegal.

In contrast, consider the case of radio waves, which is a crossing of other people’s boundaries that is invisible and insensible in every way to the property owner. We are all bombarded by radio waves that cross our properties without our knowledge or consent. Are they invasive and should they therefore be illegal, now that we have scientific devices to detect such waves? Are we then to outlaw all radio transmission? And if not, why not?

The reason why not is that these boundary crossings do not interfere with anyone’s exclusive possession, use or enjoyment of their property. They are invisible, cannot be detected by man’s senses, and do no harm. They are therefore not really invasions of property, for we must refine our concept of invasion to mean not just boundary crossing, but boundary crossings that in some way interfere with the owner’s use or enjoyment of this property. What counts is whether the senses of the property owner are interfered with.

But suppose it is later discovered that radio waves are harmful, that they cause cancer or some other illness? Then they would be interfering with the use of the property in one’s person and should be illegal and enjoined, provided of course that this proof of harm and the causal connection between the specific invaders and specific victims are established beyond a reasonable doubt.[4]

This explanation provides a more refined insight into the boundaries of property rights and how individuals may be able to internalize common externalities.

Strict Liability

Strict Liability is the legal concept whereby the owner of some property is held legally liable for damages suffered by others from this property that is due neither to the negligence nor fault of the owner. Attorney and libertarian legal theorist Stephan Kinsella provides a cogent critique of the idea of Strict Liability:

Many libertarians seem to assume the validity of some kind of “strict liability.” They say this with respect to property, when they assume that the owner “is responsible” for harm that is done by or with his property.

I believe this an unjustified assumption, and is based on a lack of careful analysis of property rights. Property is the right to use or control a scarce resource. It is not immediately clear why the right to use would imply obligations. Thinking this way clouds other property-related issues like IP. People say, for example, that IP is not problematic just because it limits what you can do with your own property–after all, your rights in your property are not unlimited, since you can’t use your property to commit aggression against others.

This latter phrase is said repeatedly by libertarians. I can’t count how many times I’ve heard it over the years. The problem is it improperly links the prohibition on aggression to ownership of one’s own property, thus implying that property rights are limited. But a crime is simply an action, and actions employ means. But the actor does not need to own the means. If I steal A’s handgun to shoot B, I am the murderer, not A. I violated A’s right to control the gun; but A’s right to the gun does not make him the murderer. We can see that the idea of strict liability as it applies to ‘responsibility for owned things’ is deeply flawed.

In other words, just because you have no right to commit aggression (via any means, whether the means are your owned property or not, or even other humans, whether owned or not) does not mean that property rights are “limited.” The non-aggression principle limits what actionsyou are permitted to engage in. And since inanimate property does not act by itself, then it never commits crimes. It is people who commit crimes. If the owner commits a crime, he is liable, whether he uses his own property or not. But if another person uses my property to commit a crime, why should I be liable? It was not my action. Therefore, we can see that the assumption that ‘ownership implies responsibility’ is relatively mindless, unthinking, and useless.[5]

Tort/Negligence

Torts are relevant in the context of pollution and other environmental concerns, especially in a society characterized by a libertarian legal system.[6] Kinsella provides insight on the task of detailing the libertarian approach to negligent torts in general:

A wrongdoer is someone who intentionally causes harm or does something that gives the victim or recipient of the action a right to forcefully respond. This is true in the case of aggression; threats (the action of attempting harm, or making someone fearful of receiving a battery gives rise to a right to use force in response); fraud (the defrauder intentionally and knowingly takes property of the victim without the victim’s genuine consent)…

So how should we view negligence? I believe it should be viewed as being on a spectrum between non-action or mere behavior, and fully intentional action (crime). It is “partially” intentional. As I noted in Causation and Aggression:

“… when we ask if someone was the cause of a certain aggression, we are asking whether the actor did choose and employ means to attain the prohibited result. For there to be ’cause’ in this sense, obviously there has to be cause-in-fact–this is implied by the notion of the means employed ‘attaining’ or resulting in the actor’s end. Intentionality is also a factor, because action has to be intentional to be an action (the means are chosen and employed intentionally; the actor intends to achieve a given end).

Notice that this analysis helps to explain why damages or punishment is greater for intentional crimes than for negligent torts that result in similar damage. For example, punishment is an action: it is intentional and aims at punishing the body of the aggressor or tortfeasor. In punishing a criminal, the punishment is justified because the criminal himself intentionally violated the borders of the victim; the punishment is therefore symmetrical …. However, in punishing a mere tortfeasor, the punishment is fully intentional, but the negligent action being punished is only ‘partially’ intentional. Therefore punishing a tortfeasor can be disproportionate; it would be symmetrical only if the punishment were also ‘partially’ intentional. But punishment cannot be partially intentional; therefore, the damages inflicted (or extracted) have to be reduced to make the punishment more proportionate.”[7]

Kinsella’s interpretation of torts creates a justification for punishment in the event of a “partially intentional” property rights violation. Moreover, it demonstrates why an “eye for an eye” punishment is inappropriate when applied to such cases where negligence is the cause of a property rights violation. For instance, if Peter were to, with full intention, run over and kill Bill, then executing Peter would be a justifiable punishment due to its symmetry with the crime. However, if Peter were to run over and kill Bill due to negligence, then executing Peter as punishment would be unjustified. This is because the act of executing Peter is not symmetrical with Peter’s act of involuntary manslaughter.

Action is defined as the deliberate use of means aimed at achieving a certain end(s). An action aimed towards execution is not commensurate with an action aimed away from killing that yields this unfortunate result nonetheless. Though Peter’s action was not explicitly aimed at killing Bill, his act is still considered “partially intentional” towards this end as it did involve the deliberate use of means to achieve an end which necessarily put Bill at risk (otherwise Bill could not have been killed as a result of the action). Thus, it would be more appropriate to reduce Peter’s punishment to a level commensurate with the degree of risk he placed on Bill’s life. If Peter’s act placed Bill’s life at a 25% chance of being extinguished, then Peter’s punishment should at least be reduced 75% with respect to the ultimate penalty of execution. How one’s level of intentionality is to be determined,  the percentage of risk his actions placed on others assessed, and what punishments correspond with negligence related reductions cannot be known for certain in advance, and, as such, would be determined by arbitration, available evidence, and case precedent.

Of course, there are other mitigating factors to consider where Peter could run over and kill Bill, but he might be held less liable, or not be held liable at all. For instance, if Bill jumped in front of Peter’s car, then Peter would likely not be held legally liable as Bill would be assessed as the cause of his own death. Alternatively, if Charlie ran Peter off the road, causing Peter to run over and kill Bill, then Charlie would be held liable for Bill’s death, not Peter despite the fact that he was the one who ran Bill down. Finally, should Peter have suffered from an unforeseeable seizure while driving that caused him to swerve and crush Bill, then he should not be held liable, as this would be the result of Peter’s completely unintentional behavior as opposed to his “actions” (intentional behavior). Thus, one’s criminal or tortious liability is contingent upon whether or not his actionsare judged to be the cause of a property rights violation.

Externalities

Often times, environmental damages such as pollution and ozone depletion are referred to as “externalities”: external effects of one’s private actions. Many argue negative environmental externalities warrant the intervention of the State, as their very existence supposedly reflects shortfalls of free markets (i.e. “market failures”). In short, the theory of externalities refers to those

… cases where some of the costs or benefits of activities ‘spill over’ onto third parties. When it is a cost that is imposed on third parties, it is called a negative externality. When third parties benefit from an activity in which they are not directly involved, the benefit is called a positive externality.[8]

Thus, the common rationale for State intervention is to use its legislative powers for the purpose of restricting negative externalities, such as pollution, and promoting positive externalities via subsidies, such as public education. However, what is often overlooked are the means required to take such measures, and the externalities these means produce. The true cost (or benefit) of any given action to another individual is impossible to objectively determine; this follows from the fact that one cannot compare value interpersonally. One may determine that the actors involved in a voluntary trade must see it as mutually beneficial, but one cannot ascertain the exact degree of benefit each party gained, much less the negative or positive effects the transaction had on uninvolved third parties. Therefore, to promote aggressive State solutions to remedy negative externalities is to impose a concretely destructive and unjustified activity for the pursuit of an outcome whose net beneficial or destructive effects cannot be known.[9]

Ironically, however, the common law legal mechanisms which were used to effectively defend against negative externalities were curtailed by the State centuries ago in pursuit of the “greater public good.” The prior legal mechanisms were simple, consistent, justified, and effective as they were guided by the ultimate end of upholding private property rights. Walter Block describes the solution:

There was a way to force private polluters to bear the social cost of their operations’: sue them, make them pay for their past transgressions, and get a court order prohibiting them from such invasions in the future.

Upholding property rights in this manner had several salutary effects. First of all, there was an incentive to use clean burning, but slightly more expensive anthracite coal rather than the cheaper but dirtier high sulfur content variety; less risk of lawsuits. Second, it paid to install scrubbers, and other techniques for reducing pollution output. Third there was an impetus to engage in research and development of new and better methods for the internalization of externalities: keeping one’s pollutants to oneself. Fourth, there was a movement toward the use of better chimneys and other smoke prevention devices. Fifth, an incipient forensic pollution industry was in the process of being developed. Sixth, the locational decisions of manufacturing firms were intimately affected. The law implied that it would be more profitable to establish a plant in an area with very few people, or none at all; setting up shop in a residential area, for example, would subject the firm to debilitating lawsuits.[10]

Preserving the Earth’s Natural Treasures

When one discusses the privatization of any currently socialized service, one of the most common objections levied is that doing so would diminish the capacity to preserve and maintain the resources involved for posterity. What is implicit in this objection is the unproven premise that the State is indeed better suited at taking care of these resources than any private owners could be. As illustrated by the tragedy of the commons, the incentive structure for agents of the State to take care of public lands and properties is simply not as compelling as the incentive structure of private ownership where the owner stands to directly benefit from maintaining and building on the capital value of these goods.

For example, say a wealthy businessman acquires Yellowstone National Park. In a genuinely free market, the incentives he faces support a more productive use of those resources. Perhaps tourism to an ecological preservation is less rewarding to all parties than transforming the land into a space center, an amusement park, a sports stadium, selling parcels of it for residential purposes, etc. While the maintenance of Yellowstone as an ecological site is visible under State care, it is not clear that such a purpose is the most value-productive end to which it could be put – only the interactions between individuals in a marketplace can tend to arrive at the most productive use. Because money is able to purchase an entire spectrum of goods and services, transforming the land – or carefully preserving it as a preservation – will tend to follow from his desire to act in ways which he believes will yield him the greatest monetary profits. Thus, if the owner appraises that the most profitable use of the land is to preserve it for recreational use and appreciation, then he may spend resources to preserve its integrity and he may charge visitors admission.

It is also important to recall that, in most cases, for someone to acquire the wealth needed to purchase a landmass such as Yellowstone, he would first need to sell goods or services that people valued more than the price he asked for them. The desires of others in society would have already played a large factor in this person’s decisions regarding how to allocate his resources. This is due to the effects of free trade; arranging his property in a way that benefits society is how he would have generated his great wealth in the first place. In the alternative case where someone merely inherits wealth or wins it in a lottery, if such people do not allocate their resources wisely, they will incur losses and progressively lose control over a wider range of resources unless and until they start taking into account the preferences of others in their allocation. This same analysis may be applied to lakes, rivers, and any other owned thing.

Walter Block illustrates this with his lake example. If the owner believes his lake is more profitable when used for dumping, he will likely convert the lake accordingly and charge customers to dump. Conversely, if he views the most profitable use of the lake to be recreation, he will use it towards this end, charging people admission for its enjoyment. When deciding between the two uses, the owner will also likely take into account that he can switch his lake from a recreational use to a dumping one but that it would be far more difficult (if not impossible) to do the reverse. On the surface, some may find this disturbing as it would undoubtedly result in some lakes being used for dumping. However, the supply and demand forces of the market will direct lake owners away from creating too many dumping lakes by means of the profit/loss system. As more lakes would be used for dumping, there would be relatively fewer lakes for recreation. Due to the shortage, recreational lake owners may be able to charge higher prices for admissions, generating more profits, causing future lake owners to act in kind, and even to convince dumping owners and other non-owners to join the recreational lake market, pushing the price down further.[11] This, of course, is also equally and simultaneously true with regards to lakes for fishing, exploration, scientific testing, ecological preservation, and any other end to which lakes can be put.

The motive to maintain the capital value of one’s property will also serve to prevent an over-harvesting of trees from a forest or fish from the sea. If a landmass is valuable due to its lumber, then one has a natural incentive to not harvest more than he is able to replenish, so that he may maintain his future cash flow. Likewise, if one’s section of ocean or lake derives value from the number of its inhabitants, it will be in the owner’s best financial interest to not consume more of them than he is able to replenish.

Pricing Mechanism

The subject of an untainted pricing mechanism warrants specific mention as it has great implications for the advocacy of private control. As prices reflect the relative scarcities, demands, and opportunity costs of using resources in particular ways, they represent a quantitative metric by which easy assessment of the value of one’s actions is possible – by monetary profits and losses. An entrepreneur experiencing losses indicates he is employing his resources in a way that members of society value less than they did prior to the entrepreneur employing them in such a manner. The reverse is true for profits. An owner profiting from his employment of resources means that he is transforming existing resources in a manner that members of the market value more than they valued the state of their previous arrangement.

Naturally, then, the existence of money and money prices allows for rational economic calculation; entrepreneurs have something real by which they can measure their performance. The driving force of the entrepreneur is the desire to create value and give others a reason to part with their money. If he earns more than it cost him to start the project, it’s a success – if not, it’s a loss. With prices derived from private ownership, it’s possible to examine the economic configuration of one’s resources. One can examine not simply what to produce, but how to produce it. Thus, the central error with State or public ownership remains that no such objective and accurate pricing mechanism exists to guide the actions of State actors to employ resources under their command in the most efficient manner possible, i.e., in a manner that generates the lowest opportunity costs for those resources.

This is because the State’s income is not voluntarily provided; it is provided via coercive and aggressive mandate. When people are compelled by force to hand over their money, it becomes impossible to determine their actual preferences as the amount of income received is not commensurate with the level of desirability of a given good or service.[12] Contrast this with entrepreneurs in a free market where contributions are entirely voluntary and, therefore, do reflect such desirability.

When politicians regulate the uses of public resources, they are more compelled to employ them in the direction of special interests and political pursuits as opposed to employing them in such a way as to maximize their capital value. This, of course, results in over-consumption and misallocations as their command over such resources is temporary yet their positions do not allow them to reap direct benefits from their capital value. This leaves the politicians with only one personally advantageous course of action: to exploit and consume the resources under their command as much and as quickly as possible.

Water Privatization

Today, unfortunately, most aqueous resources are owned by the State:

First, the rivers. The rivers, and the oceans too, are generally owned by the government; private property, certainly complete private property, has not been permitted in the water. In essence, then, government owns the rivers. But government ownership is not true ownership, because the government officials, while able to control the resource cannot themselves reap their capital value on the market. Government officials cannot sell the rivers or sell stock in them. Hence, they have no economic incentive to preserve the purity and value of the rivers. Rivers are, then, in the economic sense, ‘unowned’; therefore government officials have permitted their corruption and pollution. Anyone has been able to dump polluting garbage and wastes in the waters.[13]

Because many aqueous resources are not privately owned, the tragedy of the commons plagues their use and integrity. Over-fishing, dumping, oil spills, and other forms of pollution abound as no one has a direct and exclusive means to privatize the benefits of taking measures to maintain the integrity of the water. This contrasts with the incentives private owners have to prevent others from unjustly dumping trash or otherwise polluting their water. The cleaner one’s water resources, the greater market value they have. The private owners would have a more direct and vested interest in preserving the quality of the aqueous resource for whatever end they deem to be most profitable in the long run.

Furthermore, geographic coordinates can serve as barriers for adjacent, contiguous water resources. Despite the water moving in and out of one’s territory, it is possible to homestead sea space and establish norms governing pollution of that space. If Sarah purchases a property with a river running through it that has pollutant level X, and her neighbor upstream begins to dump in the river such that the pollutant level exceeds X, she will have legal grounds to enjoin her neighbor’s polluting activities. Of course, such legal means would only be necessary if Sarah and her neighbor had not or could not work out some voluntary arrangement, such as payment for the excess dumping.

As for the question of how one may create borders in such aqueous resources, this is merely a technical problem. Walter Block suggests the law should consider future scenarios openly:

This scenario assumes, of course, that the necessary complementary technological breakthroughs occur, such as either genetic branding, or perhaps better yet, electrified fences, which can keep the denizens of the deep penned in where deep sea fish farmers want them. Yes, this seems unlikely at present, given that under present law there would be no economic benefit to such inventions. But this is due, in turn, not to any primordial fact of nature or law. Rather, it is because the law has not yet been changed so as to recognize even the possible future scenario where ocean privatization would be economic. The public policy recommendation stemming from this analysis is merely that the law should now be changed so as to recognize fish ownership in a given cubic area of ocean when and if such an act becomes technically viable. Then, whether or not it actually occurs is only an empirical question. It will, if and only if the complementary technology is forthcoming to make it feasible. But under this ideal state of affairs, there would be no legal impediment, as there now is, in this direction. That is, suppose that the needed innovations never occur, or are always too expensive, compared to the gains to be made by herding fish instead of hunting them. Then, of course, there can be no private property rights used in this manner in the ocean, as a matter of fact. But as a matter of law, things would still be different under the present proposal. There would always be the contrary to fact conditional in operation that if technology were such, then it would be legal to fence in parts of the ocean for these purposes. Under this state of affairs, there would be no legal impediments to the development of the requisite technology.[14]

One other benefit of privatizing water resources is that doing so would create an additional incentive to implement and invent non-water polluting industrial activities and technology.  Moreover, the development of water polluting forensics would also take place to assist damaged parties in acquiring evidence regarding whom exactly is causing harm to whose property. These go hand in hand; as more effective forensic techniques are developed, so too are the incentives for would-be polluters to not pollute so that they may avoid any potential legal liability.

In regards to oil spills, for example, people who own certain portions of shipping lanes in the ocean may charge more for the passage of single hulled oil tankers than double hulled ones, as the former present a larger risk for spillage which will have a direct impact on the value of their owned section of the ocean. This is yet another way in which terrible environmental externalities, like oil spills, may be mitigated by market forces.

Air Pollution

Rothbard writes of Robert Poole, that he:

cogently defines pollution ‘as the transfer of harmful matter or energy to the person or property of another, without the latter’s consent.’ The libertarian — and the only complete — solution to the problem of air pollution is to use the courts and the legal structure to combat and prevent such invasion.[15]

Much of the same reasoning applied to water pollution also applies to air pollution. Polluting the air on another’s property without invitation is considered either a trespass or harmful nuisance (provided an easement to pollute in such a manner was not previously attained), and, as such, may be stopped or enjoined by court order. Just like water pollution, upholding private property rights will: deter dirty companies from establishing their facilities near residential communities, incentivize such companies to devise ways to mitigate their pollution, and create a greater demand for the development of forensic techniques to help identify polluting culprits. Rothbard summarizes the criteria to be met before someone may justifiably be held liable for air pollution:

We have established that everyone may do as he wishes provided he does not initiate an overt act of aggression against the person or property of anyone else. Anyone who initiates such aggression must be strictly liable for damages against the victim, even if the action is ‘reasonable’ or accidental. Finally, such aggression may take the form of pollution of someone else’s air, including his owned effective airspace, injury against his person, or a nuisance interfering with his possession or use of his land.

This is the case, provided that:

[1] the polluter has not previously established a homestead easement;

[2] while visible pollutants or noxious odors are per seaggression, in the case of invisible and insensible pollutants, the plaintiff must prove actual harm;

[3] the burden of proof of such aggression rests upon the plaintiff;

[4] the plaintiff must prove strict causality from the actions of the defendant to the victimization of the plaintiff;

[5] the plaintiff must prove such causality and aggression beyond a reasonable doubt; and there is no vicarious liability, but only liability for those who actually commit the deed. [16]

Many may object to this methodology by citing the current day technical limitations in determining which emitters are responsible for pollution and to what degree they are responsible. This is, of course, a genuine concern, but is, once again, merely a technical one, and technical limitations do not justify imposing aggressive measures to compensate for their shortfalls. Even from a utilitarian standpoint, such aggressive measures create a slew of effects which contribute to the deterioration of the overall standard of living for society and cannot, without arbitrary decree, be said to mend more issues than they create. To employ them also sets a dangerous precedent upon which more may be imposed for similar ends.[17] Rothbard warns against implementing such measures:

The prevalence of multiple sources of pollution emissions is a problem. How are we to blame emitter A if there are other emitters or if there are natural sources of emission? Whatever the answer, it must not come at the expense of throwing out proper standards of proof, and conferring unjust special privileges on plaintiffs and special burdens on defendants.[18]

Animal Extinction 

Animals, like all other scarce goods, are subject to the destructive effects of the Tragedy of the Commons. If they are prohibited from being privately owned, then humans will invariably tend to consume them in an uneconomic manner. Walter Block uses the Cow and Buffalo analogy to illustrate this concept:

It is a well-known fact, at least within the free market environmental community, that the cow prospered, due to private property rights which could avert the tragedy of the commons, while the bison almost perished as a species due to lack of the same. Nowadays, happily, this problem has been remedied with regard to the buffalo. But the whale, the porpoise, edible fish and other sea species are dealt with, at present, in precisely the same manner which almost accounted for the disappearance of the bison.[19]

Of course, certain species may go extinct if they are viewed as a nuisance to the great majority of humans e.g., locusts, mosquitoes, etc. This being a work on environmental economics and not biology, there will be no attempt to identify which species has the potential to benefit mankind on net and which ones do not. However, for those species appraised to have some market value, there will be a demand to maintain their populations. Perhaps universities may want to acquire certain species of reptiles or insects for medical research, or someone else may want to preserve populations of deer for sport, etc.

There is also, of course, the opportunity for strict preservationists to pool their money or resources and purchase land for the mere sake of preventing other humans from using it in a way they feel is destructive of its natural integrity. This method may be used to preserve lands, waters, certain animal species, mineral resources, and more. Some people prefer themselves and others to abstain from consuming certain animals or other resources, and, for this reason, may receive the greatest amount of psychic profit from establishing such preserves. Nothing about setting up such preserves would be in any way incompatible with private property rights or free enterprise.

Waste Disposal

The negative externalities associated with waste disposal may also be internalized if free people are permitted to perform these services and to own dump sites privately. Private, in this context, is not intended to reference the present relationship of waste management firms being contracted out for public use paid with tax dollars. This setup creates moral hazard for the consumer when deciding what types of items to buy – and how to dispose of his unwanted goods – as the bill for disposing them has already been paid despite how much he or she dumps. Truly private dump site owners may be inclined to charge more for materials which are scientifically shown to be more toxic or harmful. Such higher charges may be used to compensate the owner for potential liability costs or for the mitigation of his property’s value by their contamination.

Likewise, consumers may be charged more to dispose of items containing Styrofoam or plastic, and they may become more inclined to purchase products packaged in less environmentally destructive materials to reduce disposal costs. This, of course, does not mean that people will stop using plastic and Styrofoam altogether, but rather that such materials would only be used when one subjectively determines that the unique benefits of their usage exceeds the high costs of their disposal, as he will now be bearing its full cost. In this way, the self-interest of the dump site owner to make as much money as possible coincides with the consumer’s desire to save as much money as possible; they are harmonized with the actions requisite to maintain the environmental integrity of the Earth. This is not to say that such a paradigm will create an environmentally pure utopia, but merely that the incentive structures would be much more appropriately aligned toward promoting behavior which is more environmentally friendly than the incentive structure present in today’s State managed paradigm. Andrea Santoriello explains in concrete terms:

In the case of solid-waste management, plastic companies and their customers escape from the cost of disposing of plastic after the consumer is finished with it. This is because most garbage collection is organized through the public sector. The cost of disposing of the plastic and the other waste is undertaken by the government, and a citizen is typically taxed without regard to the amount of trash he generates. Once the citizen pays his taxes, he has no incentive to choose environmentally sound goods because disposal costs are in effect free to him. If, instead, there were complete privatization of the garbage disposal industry, those who generate trash would directly pay for disposal costs. The owner of a private dump tends to charge tipping fees that vary with different kinds of trash. The price will be significantly higher for material that creates toxic waste because the dump owner will be liable for any harmful leaks from his site. The hauling firm, which collects the garbage from the homeowner and must pay the tipping fee, will pass the price onto consumers. Consumers, knowing that they will have to pay more for the disposal of more plastic, will tend to substitute toward less costly, and thus more environmentally sound, containers. In the jargon of economists, the negative externality will disappear; the cost of trash disposal will be internalized, brought to bear on the responsible parties.[20]

Conclusion

Freeing markets and protecting the environment are not mutually exclusive, in fact, they both operate under the same principles and are managed in the same organic and decentralized manner. There is no bureaucrat, technocrat, or politician who effectively manages all of Nature’s functions, nor is there any single component of Nature which handles this task alone. What do exist are voluntary groupings of animals with symbiotic relations whose members have the capacity to divorce themselves from such relationships as soon as they deem prudent. There is also predator and prey. Though these animals are not bound by concepts like the Non-Aggression Principle – as they have little to no capacity to recognize and understand its meaning – we can still bear witness to the beauty and complexity of the spontaneous order that results absent a central director with the sole legal power to violently impose its will upon all others.

If the population of a predator species grows too large, its food supply will diminish, which will, in turn, diminish the population of said predator species. Even the plants which survive harmoniously with their surroundings will thrive and multiply while the ones that do not will die off and give way to more suitable vegetation. Thus, Nature is not the antithesis of a free market society; it is, instead, a reflection of its efficacy in the non-human realm. Nature has no opinion or volition. It must operate according to its own laws where the system that results is one which is bottom-up, not top-down, and which responds immediately and perpetually to the ever-changing variables of its inhabitants. No single individual or group of individuals could ever hope to artificially replicate such an efficient and adaptable system. Thus, proponents of a free market do not seek to arrogantly replace Nature with a superior man-made system, but rather to operate under a set of principles whose prototype is Nature itself.

It should be telling that the only assumption those who advocate free markets make regarding human beings is that they act in ways to secure satisfaction, utility, and profit. The concept of a free market is not a theory for idealists, but a perspective that recognizes and orients itself according to what is known about human nature, contrariwise to the assumptions advocates of State management make, who must assume their authority figures have a greater economic awareness and/or more benevolent intentions than the private citizens over which they preside. Rothbard elaborates:

Thus, when we peel away the confusions and the unsound philosophy of the modern ecologists, we find an important bedrock case against the existing system; but the case turns out to be not against capitalism, private property, growth, or technology per se. It is a case against the failure of government to allow and to defend the rights of private property against invasion. If property rights were to be defended fully, against private and governmental invasion alike, we would find here, as in other areas of our economy and society, that private enterprise and modern technology would come to mankind not as a curse but as its salvation.[21]

References

[1] Mises, Human Action, 652.

[2] Hoppe, ibid, 8.

[3] William Prosser and Werdner Keeton, Prosser and Keeton on the Law of Torts(St. Paul: West Publishing Company, 1984), 595.

[4] Murray N. Rothbard, “Law, Property Rights, and Air Pollution,” Cato Journal 2, No. 1 Spring (1982): 55-99.

[5] Stephan Kinsella, “The Libertarian Approach to Negligence, Tort, and Strict Liability: Wergeld and Partial Wergeld” (published in a blog post on stephankinsella.com, September 1, 2009), <http://www.stephankinsella.com/2009/09/the-libertarian-approach-to-negligence-tort-and-strict-liability-wergeld-and-partial-wergeld/&gt;

[6] Cornell University Law School defines torts as “civil wrongs recognized by law as grounds for a lawsuit. These wrongs result in an injury or harm constituting the basis for a claim by the injured party. While some torts are also crimes punishable with imprisonment, the primary aim of tort law is to provide relief for the damages incurred and deter others from committing the same harms. The injured person may sue for an injunction to prevent the continuation of the tortious conduct or for monetary damages.”

[7] Kinsella, “The Libertarian Approach to Negligence, Tort, and Strict Liability: Wergeld and Partial Wergeld.”

[8] Gene Callahan, “What Is an Externality?” The Free Market 8th ser. 19 (2001).

[9] For an advanced overview of the Austrian perspective on value and utility, see Jeffrey Herbener, “Further Explorations in Austrian Value and Utility Theory” (lecture presented at Mises University, Ludwig Von Mises Institute, Auburn, Alabama, August, 2005).

[10] Walter Block, “Environmentalism and Economic Freedom: The Case for Private Property Rights,” in Journal of Business Ethics 17 (1998): 1887-99.

[11] Walter Block, “Economics and the Environment: A Reconciliation,” (interview, 1985). https://youtu.be/XMxgYY_q-AI

[12] Murray N. Rothbard, “Toward a Reconstruction of Utility and Welfare Economics,” in On Freedom and Free Enterprise, edit. Mary Sennholz. (Princeton: Van Nostrand, 1956), 23.

[13] Murray N. Rothbard, “Conservation, Ecology, and Growth,” in For a New Liberty: The Libertarian Manifesto (New York: Macmillan, 1973), 317-18.

[14] Walter Block, “Water Privatization,” (unpublished manuscript) http://thelibertycaucus.com/wp-content/uploads/2014/01/waterprivate.pdf

[15] Rothbard, For a New Liberty.

 [16] Rothbard, “Law, Property Rights, and Air Pollution.”

[17] Today’s positivistic State-supported legal system is a prime example of what may result from this line of thinking.

[18] Rothbard, ibid.

[19] Block, ibid.

[20] Andrea Santoriello, “Externalities and the Environment,” in The Freeman(Foundation for Economic Education: Nov. 1996. <http://www.fee.org/the_freeman/detail/externalities-and-the-environment&gt;.

[21] Rothbard, For a New Liberty, 327.

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