Archive for the ‘externalities’ Category

Avatar, tragedy of the socialized commons and crashing salmon stocks; how the dirty hands of government destroy wild resources

February 17th, 2010 No comments

It’s a sad, sad story, now being played out practically wherever wild salmon stocks once were abundant. (This version refers to the Pacific Northwest, particularly to events in British Columbia).

First, national governments wrest control over salmon fisheries from native peoples, and eliminate low-level, community-based management systems.

With new socialized ownership, it becomes eternal “open season” on salmon and newcomers (whites or whatnot) go hog wild, resulting in the classic “tragedy of the commons” race to catch salmon before others do, without regard to others or to future harvests.

The state steps in to regulate take, banning nets at river mouths — smart fishermen take their nets to sea. Governments find themselves compelled to further regulate seasons and fishing gear, as fishermen who have no ownership stake in the resource look for ways to beat restrictions and to beat out competitors for unowned fish. Natives who don’t join in the race are left with ever slimmer takes.

As no one owns the salmon and has no legal rights that can be enforced against upstream users, governments build dams to benefit farmers (and nuclear bomb production sites and industry), and developers and loggers begin to trash streams and rivers. Reacting to howls from interested citizens, states begin to pass laws limiting the rights of property owners to use and manage their properties.

Governments get into the salmon hatchery business as salmon stocks start to plummet, and endangered species protection laws get passed. Loggers, developers, farmers and industries with cheap hydropower vent anger over “capitalism-hating” enviros and legislators, even as governments eager to please favored constituencies (farmers over natives, naturally) divert water in summer from dams to farmers, leading to large fish kills in lower and warmer rivers.

As fish stocks continue to fall, enterprising businesses get licenses from regional governments to “farm” salmon by raising them in pens (using ocean water flows, and catching and grinding up five pounds of other fish to raise one pound of salmon). Farms begin to proliferate – and begin to be seen by fishermen as externality-generating machines: farmed salmon become plagued with sea lice, which spreads to migrating wild populations, concentrations of salmon pollute neighboring waters, wild salmon populations begin to fall drastically, and other “feed stocks” of salmon are adversely affected.

Alarmed local people and adversely affected fishermen and natives organize, try to get consumers to stop buying farmed salmon, and go, hat in hand, to petition (1) governments to stop licensing new “farms” and (2) farms to adopt much more expensive methods that would seal of the farms from the wild environment. Salmon farming companies assert that they have rights to pollute, and no legal responsibility for damages suffered by others – that licensing regimes eliminated common-law rights to sue for nuisance, etc. Farmers tell governments to be “fair” and that governments should “co-invest” to subsidize any new farming methods.

Predictably, as wild salmon dwindle and temperatures rise, no one seems to wonder what things would be like if governments stopped trying to “manage” the salmon and playing the middleman, but found some way to recognize property/harvesting rights and to enforce basic common law rights against nuisance, and stepped out of the way.

I made some of these points in an email I sent today to some parties at interest:

I sent the following note to when I joined their mailing list; some of you might be interested:
Yes, one of your chief enemies are the salmon farmers, but the
real reason for the problem is that the government – and not the First
Nation or any other fishermen – owns the wild salmon.
As a result, the First Nations, commercial and sports fisherment
and other supporters of wild slmon and natural ecosystems have NO
direct rights to protect the wild salmon and are largely relegated to
feebly petitioning government (and the farming companies, whose
managers are obliged to care first and foremost for profits generated
for owners), and have little or no ability to directly sue the
salmon-farming interlopers whose pollution is damaging your livelihood
and the greater Northwest ecosystem.
This is exactly the problem we see with many other
government-owned/managed resources – in Canada, the US, China, the
Amazon, developing countries – and it’s why Elinor Ostrom was given the
2009 Nobel Prize in Economics
. Solutions regarding common resources lie
in resource users having recognized rights and an ability to bargain
with others in the community. Where governments own resources, then
they deny to those whose livelihoods and ways of life are at stake a
voice in their own present and future. (In the case of salmon, this has
deep, “Avatar”-like roots in the historical pushing aside of native
and resource management practices in favor of new,
Western-dominated governments.)
So, to First Nations and fishermen, I say – sue the farmers
directly for nuisance pollution – assert your rights! Don’t leave them
simply as another interest group petitioning government.
But also start pushing for direct, recognized property rights
in the wild salmon, which would end the “tragedy of the
commons” resulting from a free-for-all ocean take. Ending ocean take
and replacing it with traditional river-mouth-based harvests will
better protect the wild resource and give you stronger rights to make
claims on those upstream who poison and damage habitat. And take a page
out of the book of Target US, and organize a CONSUMER BOYCOTT OF ALL
FARMED SALMON. And work to eliminate all legislative grants to insiders of immunity to lawsuits for activities that damage the economic interests of others (i.e., that produce “nuisances”).

MasterResource/Tom Tanton: another muddle-headed "free-marketer" who thinks it’s fine that coal gets to shift pollution costs to others

March 6th, 2009 6 comments

Sadly, so-called “free-marketers” are often so busy smacking down bad arguments from greens that they fail to note, much less acknowledge, that they’re fairly frequently making bad arguments themselves or ignoring gaping inconsistencies in their own positions.  Of course it IS awfully easy to get caught up in partisan conflict, which provides a nice rush of self-righteousness, but it probably also helps if you’re being paid to post by fossil fuel interests, like the folks over at the supposedly “free-market” MasterResource energy blog, of Rob Bradley‘s Institute for Energy Research.  In any case, it’s disappointing, not solely because it comes from “free-marketers”, but because it offers no hope of engaging productively with those with whom they disagree.  In other words, more of Culture Wars “R” Us.

I’ve already commented quite a number of times here about Rob Bradley and his co-bloggers at MasterResource, but I continue to be astonished by the inability of the bloggers (and some commenters) to notice when they are being inconsistent or are taking anti-market/anti-lbertarian positions.  A recent post by Rob Bradley on the limitations of wind power, with follow-on comments by others, is a case in point.  In his post, Rob trots out some very old literature to make some perfectly fine – if rather obvious and well-known – points about the limitations of wind power; I observed that of course one can make similar observations about the short-comings of other energy sources, such as the social costs of coal. 

While Rob fails to respond, a visitor and one of his guest bloggers, Tom Stanton, senior energy fellow at the Pacific Research Institute (which bills itself as a “champion [of] freedom,
opportunity, and personal responsibility for all individuals by
advancing free-market policy solutions”) ride to his rescue, with strawmen and astonishingly non-libertarian (indeed, utilitarian) commentary.  Why can’t the right do better than this?

For the interested, I excerpt the relevant comments below (emphasis added):

TokyoTom { 03.04.09 at 12:09 pm }

Rob, thanks for this; you are right of course about the drawbacks to wind.

Now can I interest you in some very, very old tracts on how dirty
coal is, both in mining and combustion, or newer ones about deaths,
health costs, damages to property that are still ongoing and
BTW, while you are obviously an advocate for coal, are you also an
advocate that coal producers and consumers bear their own costs? Or is
shifting those costs to others a right that they have homesteaded?

Andrew { 03.04.09 at 6:45 pm }

the question isn’t “is coal bad?” its “is it better than (essentially)
nothing?” It is. Coal, I submit, has save far more lives than it has
cost, and has improved quality of life more than damaged it.

TokyoTom { 03.05.09 at 3:58 am }

the question is NOT whether “coal is it better than (essentially)
nothing?”, just as it is not whether wind or any other energy source is
perfect or preferable.

The question is whether those who engage in economic activities are
bearing the costs or risks of those activities, or whether those
activities appear relatively preferable to the people involved because
they are able to shift damages, costs, risks and/or responsibilities
for consequences to others.

True libertarians insist that individuals (and firms) bear full
responsibility for harms caused to others; some in fact insist that
those who are harmed without their consent have the right to use courts
to enjoin the damaging activity. Maybe this all seems a little quaint
to you?

My point is simply that Rob is ignoring, rather obviously and perhaps deliberately, the human costs of the use of coal.

Tom Tanton { 03.05.09 at 9:15 am }

“human cost of coal” has been extensively studied as have most other
energy (nay, all economic) technologies. That study are most often
referred to as “externalities”–Guess what? The economic ‘costs’ of coal
are mostly, if not completely, offset by the economic benefits.
negative externalities are NOT enough to offset the higher cost
premiums of technologies like wind that never quite mature (most likely
because of the heavy per unit subsidy they’ve become dependent on after
35+ years.)
Now let’s see about human costs–in countries with coal (or nuclear or
any meaningful) baseload power isn’t the average life span about twice
that of folks living in countries with no or primitive energy? Aren’t
THOSE folks also less educated, and less free? Do they even have 15
minutes a day of “leisure time”?Aren’t those folks also burdened with
spending every daylight hour finding a piece of wood (or dung) to cook
their measly daily bread and using unsanitary water to boot?
I don’t believe Rob is ignoring the costs of coal. I believe Sir you’re
ignoring the economic and human benefits of coal and modern energy

TokyoTom { 03.05.09 at 12:08 pm } [links added]

it seems that you understand little, if anything, about free markets or
libertarian principles. Murray Rothbard`s paper on air pollution makes
it clear that it was utilitarian arguments like yours – “the damage my
pollution does to you is fine because people want to but my products” –
that industry used in the 1800s to subvert the common law and run
roughshod over property rights, leading to the “pollution is free”
philosophy and ruinous competition where the non-polluter went
bankrupt. The upshot was the horrible pollution in the 50s, 60s and 70s
that led to tremendous citizens` movements to use government to bring
pollution under control – with laws signed by Republican presidents.

No externalities? Where were you? What motivated the Clean Air Act, Clean Water Act, SuperFund?

As for coal vs. wind, please spare me the strawman. I`m not at all
suggesting that wind OUGHT to be subsidized. I`m just asking for a
little intellectual honesty that will recognize that coal use IS
subsidized, by being allowed to shift real and significant costs to
others, and that we`d all be better off if those socialized costs were

Perhaps someday it will occur to those who (correctly) want to bash
greens for their stupid proposals that they might be more successful if
they were a little more consistent themselves and started exploring
common ground. Where`s the post praising the federal court decision
forcing TVA to do a better job at cleaning flue gases than required by
the CAA in order to limit harm caused in NC, for example? Where`s the
post calling for the privatization of the bumbling, polluting TVA,
which keeps generating costs for taxpayers and ratepayers?

But that`s not what this blog is all about, is it? You guys are more
into making enemies and fighting over government than in truly shifting
risks and regulation back to markets and the courts.

As for countries abroad, this is of course unrelated to a discussion
local/regional costs and energy alternatives in the US. But since you
bring it up, don`t forget that the real reason why these other nations
aren`t developed yet is that they`re still kleptocracies that don`t
sufficiently protect private property rights and returns on
investments.  Why are you cheering on poor governance, instead of
suggesting that they could become wealthier sooner by accelerating
their move up the Kuznets curve
(which is an artifact not only of
preferences, but of insufficient information and laws that protect the
elites over private property of the masses)?