Archive for the ‘cordato’ Category

More stupid from Tierney; this time on "Kuznets curve" and the dynamics of "wealthier and greener"

May 11th, 2009 No comments

In addressing in a recent post Rob Bradley`s claim to have a “high” level of readers, I was reminded that one of his best and most frequent commenters was a budding conservative, war-supporting “libertarian” who actually, in the past month that I`ve been banned from the blog, has just graduated from high school.  A  “high” level of readership, indeed!

But as this young reader seemed interested in hearing more about libertarian views, I visited his blog (courtesy of Bradley, no longer being able to continue a conversation on MasterResource) and found that he was being led astray by New York Times` in-house “skeptic” science reporter, John Tierney, who had just devoted a long article – “Use Energy, Get Rich and Save the Planet” – to conclusively demonstrate that he had NO CLUE about the dynamics underlying the environmental Kuznets curve (EKC).  

Tierney seems to believe that the Kuznets curve means that greater wealth magically makes for a cleaner environment.  To the contrary, it is the hard work of people, expressing their desires to protect their own property and to realize other preferences regarding shared resources, to increase wealth by finding means (property rights institutions, litigation and government regulation) to end tragedy of the commons-type situtations, who improve their environment.  That is, working to close externalities leads to both wealthier and greener societies.  

(I`ve remarked on the Kuznets curve before; interestingly, conservatives seem to misunderstand it more than liberals.)

So I tried to offer a more libertarian understanding, which I`ve taken the liberty of memorializing here (with typo correction and emphasis and further links added):

  • Andrew, food for thought on enviro Kuznets:

    Unfortunately, Tierney simply fails to understand that the enviro Kuznets curve does not tell us that problems relating to environmental cost-shifting or to the over-exploitation of unowned commons are best resolved by ignoring them and simply hoping for the best. Rather, it affirms that as people become more wealthy, they care more about protecting the environment and put more elbow grease into achieving improvements – via improved property rights protection, improved information disclosure, greater consumer pressure and even through greater regulation (which is the path the West has largely followed), and reaching agreements with others sharing the relevant resource).

    In other words, the work relating to global, regional and various national commons (atmosphere, seas, forests, water, etc.) is still ahead of us. Libertarians can advocate for property rights (and privatization of public lands) as ways to have a more efficient (and just) path on the curve, or they provide implicit support for powerful and dirty industries by standing by and waiting until citizen pressure groups force government to act in heavy-handed ways.


  • timetochooseagain

    Tom, I disagree. The way that richer leads to cleaner is through improved technology, not with the government creating artificial markets and new definitions of property. How exactly is it you think that you can extend property rights to the atmosphere? And what would that do? Spawn lawsuits? Why would you want to do that? You would just jack up energy prices. I am trying to understand your suggestions, but they just don’t make sense to me.

  • Andrew. I suggest that you start with this short article by Yandle:

    I have plenty more links on my blog to him, Terry Anderson, Mises, Cordato, Block, Rothbard and others on Austrian approaches to environmental issues, fisheries, and climate. Ron Bailey (at Reason) has good posts on fisheries; leading enviro groups all agree that more privatization is desirable:

    Commons remain commons either because government ownership prevents privatization (as in the Amazon, US public lands and most fisheries management) or because full privatization is difficult. There are many examples of the latter case that involve semi-privatization and commons management, like traditional forestries, fisheries and water rights. Elinor Ostrom is the expert on commons; I have plenty of links to her too.

    By the way, you really should read Rothbard and Block on the history of air pollution and the undermining of the common law by industrial interests. The result has been and remains, on net, a subsidy to large polluters, particularly utilities, who have a license to pollute and immunity from most suits from injured persons. If coal was paying its true costs it would have been much cleaner years ago. The American Lung Assn said in 2004 that power plant pollution causes 24,000 premature deaths each year (at least 50% more than annual homicides), as well as over 550,000 asthma attacks and 38,000 heart attacks annually.

  • timetochooseagain

    “If coal was paying its true costs it would have been much cleaner years ago.”

    And how would it do that without technological development exactly? There are natural incentives in the market to reduce pollution-one can’t sell electricity to dead people, after all. But if the technology to clean up energy does not exist, how are they helped to find it by being sued by people who use their energy and then complain about the pollution? There is not just the property rights of those with a stake in the commons to consider, but the rights of the energy producer, too. What your suggesting, the way I see it, would be defacto regulation of the right of producers to do what they do best-produce. In the Laissez Faire approach, everyone gets richer, they invest in energy research (of their own free will) to develop cleaner energy. Then pollution goes down. What is wrong with that? It seems anything else added on to that is ad hoc…

  • Easy, Andrew. People and firms invest all the time in doing things in response to incentives, both positive and negative; viz. they also try to reduce costs, including the costs their activities impose on others if those they injured have rights of recourse. The effort to reduce costs is one of the chief factors driving technological advances.

    Surely you`re not suggesting that the best way to encourage wealthier societies is to free people from responsibility for the damages they cause others? That`s hardly a Lockean or libertarian view. A “Laissez Faire approach” leaves government out, in favor of voluntary transactions and enforecment of property rights, including rights not to be injured. The regulatory state has in fact been a boon to the most powerful producers, by giving them rights to pollute, often grandfafthering dirty plants, while forcing the highest costs on more nimble and cleaner producers. If you^re interested in learning about libertarian approaches to the environment, again, I suggest you look at Rothbard, Cordato, Block and others, whom I link to on my blog.

    You seem to make reference to the enviro Kuznets curve, and how wealthier societies bring pollution dow, while completely missing the dynamics. Wealthier societies clean up because they insist on bringing an end to tragedy of the commons-type exploitation of resources. A society that focusses on property rights typically has a lower curve than societies that fail to enforce property rights (needed for Coasean bargaining) in favor of government regulatory approaches. Our own curve remains too high, because wealtheir investors prefer to use regulation to shift costs to the rest of society.

  • timetochooseagain

    Alright, Tom, I will look into the things you are talking about more thoroughly. You seem to know a lot about this topic.

UK jury approves damage to power plant in defense of a commons/ other private property; libertarians and conservatives freak out

September 12th, 2008 6 comments

See this surprising decision in the UK, letting climate-change protesters/trespassers off the hook for damages resulting from spray-painting a coal plant smokestack, on the grounds that a UK law “allows damage to be caused to property to prevent even greater damage.”

Why is this single jury verdict supposedly the end of the world (as Iain Murray of CEI, blogging at NRO’s Planet Gore would have it)?  Libertarians (Rothbard, Block, Bratland, Cordato) have long argued that:

– we should move away from the statist regulation of polluters and return to a simpler world of a resort towards common law and courts (permitting injunctions on industrial activity for the slightest damage) to defend property; and that

– the issuance of a license allowing a firm lawfully “to pollute and, hence, invade or damage property of other parties” “entail[s} a fundamental and pervasive violation of property rights”; that

– one “observes that any detectable man-made climate change has occurred during periods of inadequate or nonexistent tort protection from air pollution”; and that

– “A sensible and thoughtful first crucial step in assuring a sustainable atmosphere for future generations is to assure adequate tort protection of the personal property rights for current generations“?

It is clear that I am on firm ground in expecting in response to this decision a rush by “skeptical” libertarians and conservatives to demand MORE action by government, rather than less of it.  After all, the defense offered by the greenies in the UK was based on a statute that can be simply amended, and thereby order restored (with nary a pang of concern for fusty old common-law doctrines).

And if this is what we get from libertarians, is there any wonder that greenies – including radicals like Austrian Ed Dolan and libertarians Jon Adler and Ron Bailey – think that resort to some sort of globally coordinated multi-state action is needed to deal with a global issue?

Oh, and let me add – it seems like a “wrong” decision to me, too.

Does Cordato favor carbon taxes? McKitrick’s "innovative carbon tax proposal"

December 10th, 2007 4 comments

[Snark level – medium] 

[update below]

Austrian economist Roy Cordato is playing at collectivism by bringing favorable attention to Ross McKitrick’s “T3” carbon tax proposal on Cordato’s blog, Environment NC (hosted by the John Locke Foundation, where he is Vice President for Research & Resident Scholar). 

Says Dr. Cordato:

“Canadian economist/statistician Ross McKitrick has a good article in the Christian Science Monitor describing his innovative carbon tax proposal. The tax is tied to actual temperatures as measured in the tropical troposphere. It is an interesting approach in that it does not involve betting on the science coming from either side of debate.”

 McKitrick raised his intriguing carbon tax idea six months ago at the Financial Post

Steve McIntyre put the proposal up at the Climate Audit blog – in a post which is apparently still open for comment.  This tax was discussed on ealier on the Mises blog here. Some comments by yours truly litter both sites.

I’m not sure Dr. Cordato fully understands what he is up to – give the misanthropic enviros, “alternative energy” rent-seekers and their political gatekeepers an inch, and they’re guaranteed to take a mile.  If McKitrick’s idea gets any play at all, it’s probably to the effect that, despite his criticism of some scientific work, McKitrick thinks that climate change IS something to be taken seriously and that TAXES are an appropriate policy tool. 

Dr. Cordato seems determined to help move the Overton Window further in the direction of the Warmers.  Is he intentionally yielding ground?


I note that Austrians who oppose environmental measures that involve the coercive machnery of the state would probably dismiss such measures as “faux environmentalism”.  Here, the T3 proposal of McKitrick and favorably commented on by Dr. Cordato is an example of such “faux environmentalism”.  I guess that makes ME the “faux environmentalist” for drawing our dear readers’ attention to Dr. Cordato’s post.  My humble apologies!]

Categories: climate, cordato, enviros, mcintyre, mckitrick, tax Tags:

Sophomoric optimism?

October 15th, 2007 6 comments

Jon Bostwick agrees on another post that “Man is clever but not wise (“homo sapiens” is a misnomer)”, but further comments (emphasis added):

“True. But humanity is wise. Men create cultures, economies and law.

“Man’s flaw is that he is over confident of his own intelligence. He tries to control things he doesn’t understand, like culture, economies, and law.

You have just made an excellent case for why government involvement will not improve the environment. Because governments, like man, are not wise.” 

This is too simple, as well as self-contradictory. Humanity is wise because he collectively (but non-deliberately?) creates “cultures, economies and law” (let’s not forget governments), but individuals are foolish when they seek to use institutions to achieve particular purposes?

Our states are merely one subset of the wide universe of formal and informal institutions through which we cooperate with one another.  States are not a market, to be sure, but then neither are corporations, and there is a spectrum of ownership types between the two.  We can study all of these institutions and use that knowledge to direct how we make use of them.  Such study has informed, for example, the deliberate shifts in policy that have led to the ongoing (yet incomplete) privatization of the former USSR and of China. 

A study of institutions governing common pool resources by guru Elinor Ostrom makes the following point:

 “Whether people are able to self-organize and manage CPRs also depends on the broader social setting within which they work. National governments can help or hinder local self-organization. “Higher” levels of government can facilitate the assembly of users of a CPR in organizational meetings, provide information that helps identify the problem and possible solutions, and legitimize and help enforce agreements reached by local users. National governments can at times, however, hinder local self-organization by defending rights that lead to overuse or maintaining that the state has ultimate control over resources without actually monitoring and enforcing existing regulations.

“Participants are more likely to adopt effective rules in macro-regimes that facilitate their efforts than in regimes that ignore resource problems entirely or that presume that central authorities must make all decisions.If local authority is not formally recognized by larger regimes, it is difficult for users to establish enforceable rules.

Elinor Ostrom et al., Revisiting the Commons: Local Lessons, Global Challenges, Science, 04/09/99

Was von Mises foolish to suggest we can use the state to reform our institutions?

“It is true that where a considerable part of the costs incurred are external costs from the point of view of the acting individuals or firms, the economic calculation established by them is manifestly defective and their results deceptive. But this is not the outcome of alleged deficiencies inherent in the system of private ownership of the means of production. It is on the contrary a consequence of loopholes left in this system. It could be removed by a reform of the laws concerning liability for damages inflicted and by rescinding the institutional barriers preventing the full operation of private ownership.

And Cordato, for suggesting that Austrians take particular policy approaches to environmental issues?

“For Austrians then, public policy in the area of the environment must focus on resolving these conflicts over the use of resources that define pollution, not on obtaining an ultimately unobtainable “efficient” allocation of resources. … For Austrians, whose goal is to resolve conflicts, the focus is on clarifying titles to property and rights enforcement.

Sorry, but I cannot believe that we are condemned always to repeat all mistakes, despite our rather constant human nature.  Rather, as Yandle notes, our very history as a species is about our success in evolving, devising and adopting ways to manage shared problems.

This is a message of profound optimism, not cynicism — said the fool.

Cordato summarizes Austrian environmentalism

October 11th, 2007 No comments

Roy Cordato has cogently summarized his views and the work of his Austrian colleagues here:  Thoughts on what this framework implies for modern issues are welcome.

Below are some favorite excerpts, with emphasis added:

“Austrian economics lacks a formalized, self-conscious theory of environmental economics. But in fact all of the major elements of such a theory already exist and in that sense what is needed is to piece together the relevant aspects of Austrian economics in order to draw out and focus a theory that is already there. … In developing an Austrian theory of environmental economics, very little new theoretical ground will be plowed. But 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.

The concept of social costs, as typically invoked, completely disembodies and impersonalizes costs.  … The “social cost” approach to environmental economics has led to the “dehumanization” of issues related to the environment [where] [p]ollution or “tragedy of the commons” problems are not problems because of the damage that some people may or may not be inflicting on others, but because they create what amounts to disembodied harms. A problem occurs because some goods are “overproduced” while other goods are “underproduced.” In its more extreme form this has led to a separation of the concepts of costs and harm from human beings completely, substituting notions such as “costs to the environment,” and damage to the ecosystem.”

Economic analysis of the environment that starts from a praxeological perspective shifts the focus from maximizing the social value of output or equating price to marginal social cost, to efficient intra- and inter-personal plan formulation and execution, i.e., the internal consistency between the means that people use and the ends that they desire to achieve. Within this context, pollution problems that are indeed problems create an interpersonal conflict over the use of means and therefore obstruct efficient plan formulation and execution. Pollution is therefore not about harming the environment but about human conflict over the use of physical resources.”

“Humans cannot harm the environment. Instead, they can change the environment in such a way that it harms others who might be planning to use it for conflicting purposes.”

“The focus of the Austrian approach to environmental economics is conflict resolution. The purpose of focusing on issues related to property rights is to describe the source of the conflict and to identify possible ways of resolving it.”

“If a pollution problem exists then its solution must be found in either a clearer definition of property rights to the relevant resources or in the stricter enforcement of rights that already exist. This has been the approach taken to environmental problems by nearly all Austrians who have addressed these kinds of issues (see Mises 1998; Rothbard 1982; Lewin 1982; Cordato 1997). This shifts the perspective on pollution from one of “market failure” where the free market is seen as failing to generate an efficient outcome, to legal failure where the market process is prevented from proceeding efficiently because the necessary institutional framework, clearly defined and enforced property rights, is not in place.

“The starting point for all Austrian welfare economics is the goal seeking individual and the ability of actors to formulate and execute plans within the context of their goals. Furthermore, in all three approaches, social welfare or efficiency problems arise because of interpersonal conflict.  [C]onflict, that similarly cannot be resolved by the market process, gives rise to catallactic inefficiency by preventing useful information from being captured by prices. … A theory of environmental economics and pollution that evolves from problems associated with human conflict then would be a natural implication of each of these welfare standards.”

[I]rresolvable inefficiencies, i.e., inefficiencies that cannot find a solution in the entrepreneurial workings of the market process, arise because of institutional defects associated with the lack of clearly defined or well enforced property rights. In a setting where rights are clearly defined and strictly enforced, plans may conflict but the resolution to that conflict is embedded in the exchange process. … In the absence of clearly defined and strictly enforced property rights this process breaks down and the conflict becomes irresolvable through the market process. Under … Austrian approaches to welfare economics, therefore, the solution to pollution problems, defined as a conflict over the use of resources, is to be found in either clearly defining or more diligently enforcing property rights.”

“[W]e have integrated the Austrian focus on the actor’s means-ends framework, including its emphasis on the subjective nature of value and therefore costs, with the definition of what constitutes an environmental problem. By defining such problems in these terms, both the nature of pollution and the definition of a polluter take on new meaning. Environmental problems are brought to light as striking at the heart of the efficiency problem as typically seen by Austrians, that is, they generate human conflict and disrupt inter- and intra-personal plan formulation and execution.”

“[T]he Austrian approach to solving pollution problems may face implementation problems at the margin, i.e., with certain “tough cases,” defining and enforcing property rights already stands as the fundamental way in which interpersonal conflicts of all kinds are avoided or dealt with. …This is not to suggest that the clear definition of property rights is an easily achievable goal in all situations. It is not. But, while the Austrian approach to solving pollution problems may face implementation problems at the margin, i.e., with certain “tough cases,” defining and enforcing property rights already stands as the fundamental way in which interpersonal conflicts of all kinds are avoided or dealt with. This approach is clearly operational as it has been in operation, to one extent or another, throughout human history. The challenge for Austrians is to explain how we apply the theory in certain tough cases, not to explain, in reality, how it can be applied at all.”

— Okay – this sounds like a productive framework for approaching environmental issues. 

But on tough cases, let’s start off by hating the enviro-nazi watermelons (green on the outside, red on the inside) and by letting them know exactly what we think about them.  Not because that is productive, but because it satisfies other visceral needs.  Besides, we can always rationalize that the best form of progress is stalemate, while various parts of the global environment are trashed.


Environmental Markets? Links to Austrians

October 2nd, 2007 3 comments

Here’s a partial list of useful articles, alphabetically by author:

Terry L. Anderson and J. Bishop Grewell
Property Rights Solutions for the Global Commons: Bottom-Up or Top-Down?’y+F.+73+pdf

H. Barnett and Bruce Yandle
The End of the Externality Revolution

Walter Block 
Environmentalism and Economic Freedom: the Case for Private Property Rights

Robert W. McGee and Walter E. Block
Pollution Trading Permits as a Form of Market Socialism and the Search for a Real Market Solution to Environmental Pollution
John Bratland
Toward a Calculational Theory and Policy of Intergenerational Sustainability

Roy E. Cordato
Toward An Austrian Theory of Environmental Economics

The Common Law Approach to Pollution Prevention; a Roundtable Discussion (1997) ( Hope Babcock, Elizabeth Brubaker, David Schoenbrod, Bruce Yandle, Michael Krauss )

Peter J. Hill

Market-Based Environmentalism and the Free Market; they’re Not the Same

Murray N. Rothbard 
Law, Property Rights, and Air Pollution

Fred L. Smith Jr 
The Bankruptcy of Collectivist Environmental Policy

Fred L. Smith, Jr. 
Eco-Socialism: Threat to Liberty around the World

Robert J. Smith 
Resolving the Tragedy of the Commons by Creating Private Property Rights in Wildlife

Ludwig von Mises 
“The Limits of Property Rights and the Problems of External Costs and External Economies”, in Human Action

Bruce Yandle
Coase, Pigou, and Environmental Rights

Bruce Yandle
The Commons: Tragedy or Triumph?