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Avatar’s theme of self-determination proves too subversive and successful in China and is abruptly yanked by censors

January 19th, 2010 No comments

I noted in my previous post – Avatar resonates in China – where standing up for property rights (and against “progress”) can be downright subversive – that Avatar had hit a surprising chord in China.

Perhaps not so surprisingly. China’s censors have said they have seen enough of the band-together-and-fend-your homes-by-standing-up-to-bullies movie – which has been playing since January 4 to record breaking audiences – and have ordered all theaters to stop showing it after January 22, weeks ahead of its scheduled February 11 closing.

Avatar will be replaced by a state-approved movie on Confucius. As a result, Avatar will not be shown nationwide. (Avatar can continue to be shown only at the very limited urban locations with a 3-D projector – there is no 3-D version of the Confucius movie).

Most reports are based on the following report from Hong Kong`s Apple Daily (I was unable to find the original) (emphasis added):

China Film instructed all locations to stop showing the ordinary version of Avatar and to show only the 3D version. The Central Publicity Department issued an order to the media prohibiting it from hyping up Avatar. Reportedly, the authorities have two reasons for this check on Avatar:
first, it has taken in too much money and has seized market share from
domestic films, and second, it may lead audiences to think about forced
removal, and may possibly incite violence.

A mainland source close to China Film confirmed that the company had
recently issued instructions ordering the 2D and film version of Avatar to be taken down this week, leaving only the 3D version still showing.

Because there are so few 3D cinemas on the mainland, the order effectively prevents the general distribution of Avatar. The source said that the order had come from SARFT [China’s State Administration of Radio Film and Television]: “It may be a political decision.” Reportedly, even the 3D version will only be able to screen for three to four weeks. Avatar premiered in China on the fourth of the month.

According to the source, the Central Publicity Department has
ordered propaganda departments to ensure that the media does not hype
up Avatar, and that they correctly guide public opinion. At the
same time, it instructed the entertainment news media to shift its
attention to the upcoming domestic blockbuster Confucius. Confucius, starring Hong Kong actor Chow Yun-fat, will premiere across the mainland on the 22nd.

More reports are here and here.

I imagine bootleg copies of Avatar, which were apparently on sale in China even before the movie opened, will soar.

Next up on the censors’ agendaLooks like Google.

Avatar resonates in China – where standing up for property rights (and against "progress") can be downright subversive

January 14th, 2010 No comments

It looks as if James Cameron`s Avatar movie –  which is seen by many in the West as predictibly shallow, anti-capitalist, anti-imperialist, pro-enviro and racially politically correct – has struck a home-owners` rights chord that is resonating in China, and may reinforce popular demands in China for the protection of private property rights against governments and politically well-connected developers.

These are “rebellious undertones“, claims the WSJ in January 11 editorial. This editorial, as well as coverage in WSJ`s China Real Time Report (January 8) and by Xinhua/China.org.cn (January 13), are worth a look.

Here are a few excerpts (emphasis added):

WSJ in January 11 editorial

This is standard politically correct fare for a Western audience,
conveying a message of racial sensitivity and environmental awareness.
In China, however, it has more rebellious undertones.

That’s because Chinese local
governments in cahoots with developers have become infamous for
forcibly seeking to evict residents from their homes with little
compensation and often without their consent. The holdouts are known as
“nail households,” since their homes are sometimes left stranded in the
middle of busy construction sites. More often, however, they are driven
away by paid thugs. Private property is one of the most sensitive
issues in the country today, and “Avatar” has given the resisters a
shot in the arm.

 

WSJ`s China Real Time Report (January 8):

While the plot contains obvious allusions to colonialist
resource-grabbing, Li [Li Chengpeng, an apparently well-known blogger and sports reporter] instead sees “Avatar” as an allegory for the
exploitation of regular people by Chinese real estate companies.

In his post, titled “Avatar: An Epic Nail House Textbook,” Li draws
a comparison between the tree where the Na’vi live and the homes of
people who resist eviction—known in China as “nail houses” because of
the way they stick up out of would-be construction sites (see articles,
with video, on the subject here and here).

Like the Na’vi, China’s nail house residents are often asked to
abandon their homes for little or nothing in return. Chinese real
estate developers, like the company in the film, are typically
quasi-governmental organizations, backed by the rhetoric of progress
and armies of hired thugs that can be brought in when negotiations fall
through.

“The developer sees the tree as an illegal building, its residents
as rabble rousers who don’t support municipal development and aren’t
willing to sacrifice for the greater good,” Li writes.

The post has been viewed more than 200,000 times and attracted
nearly 2500 comments, the vast majority supportive, since he put it up
Monday.

Others have jumped on the idea, including The Beijing News, which called the film “a nail house parable,” and twenty-something literary star Han Han, who defended
the film against charges its plot is weak: “For audiences from other
places, barbaric eviction is something they simply can’t imagine–it’s
the sort of thing that could only happen in outer space and China.”

So what lessons does the film hold for people in China facing
eviction? “Communication is worthless,” Li writes. “You can only fight
fire with fire.”

 

Xinhua/China.org.cn (January 13)

While most of the global audience are enjoying the dazzling 3-D experience of the Hollywood blockbuster Avatar, some Chinese see it from a very different angle: a successful battle against forced eviction. …

But in China, the story has aroused a
sympathetic response among many spectators, as they see in the film a
familiar social conflict — forced demolitions by real estate
developers and urban administrative inspectors.

“They are very much alike. For
instance, the conflict in the film also starts with land,” a posting by
“A Cup of Green Tea” said in an on-line forum operated by the
www.xinhuanet.com.

“When real estate developers want a
piece of land, the local residents must move away; if they decline to
leave, then real estate developers will resort to violent ways,” the
posting said.

Forced demolitions have always led to
opposition and resistance from local residents in China and have given
rise to the term “nail house” in China, in reference to a nail refusing
to be hammered down.

In southwest China’s city of
Chongqing, a couple battled for three years from 2004 to 2007 to stop
developers from razing their home. Their neighbors left one after
another, leaving their two-story brick building standing like a tower
surrounded by a 17-meter deep construction site. Their fight finally
came to an end in April 2007 with a negotiated agreement that
nevertheless saw the demolition of their house.

In June 2008, Pan Rong and her husband
stood on the roof of their house in Shanghai and threw Molotov
cocktails at the approaching bulldozer. Pan’s efforts to protect her
home failed at last when the bulldozer destroyed the walls, forcing the
couple out.

In November last year, a 47-year-old
woman, Tang Fuzhen, in the southwestern city of Chengdu, set herself on
fire to protest the forced demolition of her house and died later.

In both cases, the local governments insisted that the forced demolitions were lawful and accorded with regulations.

“I am wondering whether Cameron had secretly lived in China before coming up with such an idea of writing the story of Avatar, but with a promising ending in the film,” said renowned football reporter, Li Chengpeng, in a blog article on www.sina.com.

“In a word, I think the film is a successful eulogy of the fight of ‘nail houses’ against forced demolitions,” he said.

The Chinese central government is increasingly aware of the negative impact of and public discontent toward forced demolitions.

China passed its landmark property law in 2007, highlighting the protection of private property.

On Dec. 7 last year, five professors
from Peking University claimed in an open letter to the National
People’s Congress, the country’s top legislature, the Regulation on
Urban Housing Demolition Administration was unconstitutional and
violated the property law.

The existing demolition regulation
took effect in 2001, allowing forced demolition. The government has
finished a draft revision to the regulation.

The draft revision, with its content
still unknown, put more restrictions on the government’s administrative
power in demolition procedures, and was aimed at easing growing
tensions caused by forced demolitions, legal experts said.

“To audiences of other countries,
forced demolitions are probably beyond their imagination,” said young
writer Han Han, well known for his always controversial remarks, in one
of his blog articles on www.sina.com.

“So I think Avatar is a great movie. I give it a full mark of 10, also taking into consideration the 3-D and IMAX,” he said. …

However, “A Cup of Green Tea” voiced a
note of warning: “I strongly advise real estate developers and urban
administrative inspectors see the movie and learn from it.”

 

This relatively surprising reception of the Avatar movie in China is obviously something to be welcomed by all those who favor markets and freedom – as well by evil greenies (and Japanese and others downwind/downstream) who want cleaner air and water – since it is clear that  enforceable and transferrable property rights is one of the key mechanisms by which developing societies move along the “Kuznets environmental curve” from pollution to a cleaner environment.

Let`s also hope that the Chinese also start to recognize that their consumer demand is (like that of Western consumers) fuelling Avatar-like destruction elsewhere around the world, and choose to act as responsible consumers, by insisting that indigenous rights elsewhere by protected.

To Ron Bailey: yes, an "invisible hand" controls population, but property rights & rule of law are not universal and, as Mises noted, require effort

June 19th, 2009 No comments

Ron Bailey, science correspondent at ReasonOnline, has a very useful post up that outlines how markets and the institutions that underpin them explain declining fertility in Western societies, and that suggest grounds for optimism when looking at population growth  in the developing world.

However, he leaves a few things out in his ongoing effort to show that the “Neo-Malthusians” are wrong to worry about population, including the following:

  • the West lies at the end of the demand chains that have swamped both unowned commons in the oceans and traditional, community-based property rights systems in developing nations (and that have fuelled kleptocrats for decades);
  • as developing nations grow, until clear and effective property rights systems are established, they will put stresses similar to those that the West did on open-access commons – including on the climate system as their fossil fuel use grows; and
  • establishing property rights and other institutions conducive to markets and wealth don`t spring up magically, but take time and concerted effort (and leave gaps), as Ludwig von Mises noted- and which is the lesson of the “Kuznets” environmental curve.

I remarked on some these in the following, which I posted (or tried to) at Ron`s comment thread:

Ron, in general I think your post is insightful and helpful, as it points the way to property rights and rule of law as ways that human societies can improve their well-being while controlling their population via the choices of individuals. This provides a fruitful focus for all participants in the discussion, including both the “conservative” and the “envirofacist” nature-lover poles.

However, for me at least it`s not a new insight (I studied some population dynamics, carrying capacity & sygmoid growth curves, was long familiar w/ Hardin & noticed in the 80s that the places where pop growth was highest was where property wasn`t adequately protected.

And you might not have not have noticed, but decades before Hardin, Ludwig von Mises explained how environmental problems arise from the lack of clear, appropriate and enforceable property rights.

More importantly, I think you fail to address both the West`s role in ongoing environmental destruction outside of their countries and the need for those concerned about environment and human welfare to continue to push and contend – both property rights on the supply side, and management (consumer pressure, boycotts etc.) are still needed on the demand side. I blogged on this two years ago, here: Too Many or Too Few People: Does the market provide an answer?“.

There are real problems and they aren`t magically solved (as Tierney seems to think, a la Kuznets). Mises pointed not only at the problem of externalities, but also at the transitions that societies make, deliberately or through changes in customs, to reduce externalities.

There is a lot of hard work ahead of us, and preferences and initiative matter greatly. I appreciate your efforts to educate and to push the ball forward.

Sincerely, Tom

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:

    http://mises.org/Community/blogs/tokyotom/search.aspx?q=kuznets
    http://mises.org/Community/blogs/tokyotom/archive/2008/01/22/poor-countries-need-capitalism-not-climate-change-welfare.aspx
    http://mises.org/Community/blogs/tokyotom/archive/2007/09/27/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx

    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.

    TT


  • 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:http://www.thefreemanonline.org/featured/the-commons-tragedy-or-triumph/

    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:http://mises.org/Community/blogs/tokyotom/archive/2009/01/15/for-crashing-fisheries-coalition-of-mainline-us-enviro-groups-calls-for-property-rights.aspx

    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.

Envirofascists at Heritage Foundation worry about China’s environmental problems

September 4th, 2008 No comments

The bleeding-heart liberal do-gooders!  Puzzlingly, this Heritage Foundation essay completely fails to mention the predominant role of the state and the lack of property rights in generating the problem.

They make Tom Friedman seem like the real advocate of freedom.

[Snark alert: high]

Tom Friedman/NYT roots for freedom and property rights as ways to propel Chinese progress along the enviro Kuznets curve

September 1st, 2008 No comments

Here’s the money quote from Tom Friedman‘s interesting op-ed at the Sunday New York Times:

The problem for the ruling Communist Party is this: China can’t have a greener
society without empowering citizens to become watchdogs and allowing them to sue
local businesses and governments that pollute, and it can’t have a more
knowledge-intensive innovation society without a freer flow of information and
experimentation.

Spoken like a true enviro-Nazi!

My prior posts on the environmental Kuznets curve are here.

 

Chris Horner/CEI: Confused or alarmist on Kuznets, China and climate?

August 9th, 2008 No comments

The right-wing Business & Media Institute has published a rather confused piece by Chris Horner, senior fellow at the Competitive Enterprise Institute, in which Horner, while noting China’s progress along the environmental Kuznets curve (as I discuss here), prefers to wring his hands that the West, in order to deal with climate change, may feel compelled to adopt the same strong-arm approach that China has taken to trying to partially clear its filthy skies over Beijing during the Olympics. 

But Horner has his paradigms all mixed up. Environmental Kuznets curves are discussed with respect to particular countries – and for good reason, as a society’s response to externalities is largely dependent upon the particular mix of property rights and other institutions which such society may rely on to protect its people and their property from harms generated by economic activity.  But despite Horner’s worst nightmares, there is no “world government” (even as growing trade and wealth is gradually bringing different countries together and establishing a very interconnected world, a world that encourages China by allowing it to host the Olympics), much less a red-handed governing elite that can impose its will on the rest of a powerless world.

Indeed, while one might very well conceive of a global Kuznets curve, it’s quite obvious that information and transaction costs, political disunity and differences in wealth and perspective across the nations of the world make it very difficult indeed for self interested countries to reach meaningful and enforceable agreements with respect to shared resources like the atmosphere.  Even so, we are more likely to see such a political agreement or resource-management much earlier than we are to see the establishment of a unified global government that is capable of exercising a monopoly on force the way the Chinese government does.

It’s the very difficulty in reaching such agreements that underlies some of the pessimism among many that man is capable of addressing in a coordinated and meaningful way various global and regional problems, from those relating to unowned or open access resources to those relating to development and poor/kleptocratic governance (from Zimbabwe to the USA).

Further, on climate change discussions, the effort has stumbled not because of strong-arming of the kind that alarms Horner, but because Western nations have tried to craft overly sophisticated and bureaucratized trading mechanisms (based in large part on US insistence and experience) that were intended to reduce costs overall.

 

Accordingly, Horner’s “alarmism” is rather surprising.  One would think that the difficulties that the enviros have encountered in trying to coordinate global climate change policy would hearten Horner, who is a strong climate change skeptic, both on the science and on policy grounds.  Is Horner secretly concerned that maybe the enviros are right, and that delay on the policy front is buying us unavoidable future costs – in which case governments might decide to act with greater alacrity that they have shown to date?  If not, what is he worried about?

We’ve encountered “beam me up” Chris Horner before; as previously, I find his views to be puzzling – unless Horner, like “skeptical” scientists Pat Michaels and Chip Knappenberger, is becoming a warmer.  As Michaels and Knappenberger wrote in January:

“First off, it will take nothing short of a miracle for the 50% reduction to take place, and secondly, it probably wouldn’t stop the temperature from rising 2ºC above “natural” levels. …

“But the targets won’t come close to being met as a bits-and-pieces solution will not achieve the goal of halving current global CO2 emissions by the year 2100—much less any year before then. In fact, more than likely, these legislative efforts will not, to any noticeable degree, even begin to separate the blue and the red curves for a long time to come—far too long to avoid elevating global temperature 2 degrees above “natural” levels. 

That’s what the future holds in store. Get used to it.”

 

 

 

"Environmental Kuznets curve" and Onion’s spoof of China’s Status as World’s Number One Air Polluter

July 12th, 2008 No comments

Sorry; this was too good not to share:

China Celebrates Its Status As World’s Number One Air Polluter

China has now outstripped the rest of the world in GHG emissions, as well.

Government ownership of (and favoritism to) much of industry, a lack of clear or enforceable property rights and an inability of injured citizens to seek recourse for damages will all delay Chinese progress along the “environmental Kuznets curve” – which in my mind simply reflects the various information costs and transaction costs within a society in becoming aware of and responding to environmental problems.  Environmental problems are “problems” only because a lack of information or social infrastructure means that certain producers (and consumers of their products) are able to shift costs of production to others, who either may be unaware of the risks, unaware of who is producing them, or unable to organize and lack institutional abilities either to protect their rights or to transact with those who generate the harms.

Institutional deficiencies in China unfortunately mean that China will experience a higher peak in environmental damage than if it openly acknowledges its environmental problems and moves quickly to widely publicize pollution information, and to strengthen property rights, tort rights and access to fair courts (or, alternatively, to follow the Western example by abandoning common law approaches in favor of stronger statutory, regulatory and criminal measures).

John Baden: is this free market enviromentalist stalwart a Mt. Pelerin misanthrope/watermelon?

December 16th, 2007 No comments

[snark meter – medium] 

John Baden, a former logger and oilman, has long been a pillar of the “free-market” environmentalists.  He founded and leads the Foundation for Research on Economics & the Environment (FREE) and founded and headed the Property and Environment Research Center (PERC), both based in Bozeman, Montana. http://en.wikipedia.org/wiki/John_A._Baden; http://en.wikipedia.org/wiki/Property_and_Environment_Research_Center

But don’t let his Mont Pelerin Society (http://www.montpelerin.org/home.cfm) membership fool you; John is very green on the outside and, with so much green, might he not be more than a little pink on the inside?

He recently summarized advice he had given (on request) to policy advisers for a Democratic presidential candidate and a Republican one.  Allow me to quote freely (emphasis added):

“Both parties need help—but in opposite directions. Republicans need sensitivity to Green issues, Democrats sensibility regarding incentives.”

We are … eager to help all candidates develop sound policies, ones we believe will foster responsible liberty, environmental quality, and modest prosperity. Over the decades, we’ve made compelling, well-respected arguments against the Green tradition of greater bureaucratic powers, increased federal control, and heightening paranoia over environmental issues.

“From the Civil War until the first Earth Day in 1970, the West’s politics, culture, and economy were oriented toward the exploitation of its natural resources. But the extractive sector no longer drives the Western economy and hasn’t for several decades. Today’s economic drivers are amenities, services, and symbolic manipulation, not the traditional material stuff of wood, wheat, water, and minerals. …

“Here’s the reality some politicians ignore at their peril: we’ve high-graded our best, most accessible resources. The richest ores, finest timber, and best dam sites have been developed. The easy fruit has been picked and the Western economy can no longer rely on the extractive sector. No ghost dance will bring them back.

“Ray Rasker notes that since 1970, “Montana has added over 150,000 new jobs, and not one of the new net jobs has been in mining, oil and gas, farming, ranching, or the woods products industry.” The extractive industries are notoriously unstable, and commodity prices always undulate. The timber industry, for example, has largely abandoned the West for the Southeast and foreign countries. …

Now, increased opportunities in the West are created by high-tech enterprises and services. The service sector includes professional occupations in law, health care, software, data processing, education, and finance. Although they are not the traditional Western jobs, these occupations, like those in extractive industries, depend upon open space and natural resources.

“Why? Because professionals seek locations rich in environmental amenities, e.g., wilderness, open space, fish and wildlife, and recreational opportunities. Data indicates the West’s roadless public lands, wilderness areas, free-flowing rivers, national parks and forests, open ranges, and healthy wildlife habitats generate much of our economic growth. Folks don’t move here by accident nor do they do so to maximize income—quality of life trumps.

“The GOP and the Democrats compete for well-off and well-educated voters, those David Brooks describes in Bobos in Paradise: The New Upper Class and How They Got There, and the Democrats are clearly winning. This is no accident; the nation has become immensely wealthy, and with wealth and education comes heightened environmental sensitivity. When Americans become wealthy most think, or at least posture, Green.

President Clinton capitalized on these demographic realties when he set aside 40 million acres of National Forest as roadless areas. Many fiscal conservatives and the vast majority of Westerners applauded the decision, even those who disliked Clinton.

These roadless areas were undisturbed for good reason; most have low economic value. Without explicit or implicit subsidies, resource extraction on these lands is infeasible. Federal lands are political lands where heavy subsidies are the norm. Traditional politics have ignored or discounted the full costs of exploitation. Citizens now demand more honest accounting of both economic and environmental costs.

A candidate who hopes to capture the West’s electoral votes should not take seriously any campaign policy that ignores links between ecology and economics. Westerners are Greener, more sophisticated, and better informed than 30 years ago. Few are dependent on traditional resource exploitation. A good candidate will discern the implications and propose appropriate policies.

http://www.free-eco.org/articleDisplay.php?id=573 

Inquiring minds want to know:

– are only those in the American West “Greener, more sophisticated, and better informed than 30 years ago”, or is this true across all developed and emerging economies?

– does “heightened environmental sensitivity” come with “wealth and education”?  Or is such “heightened environmental sensitivity” simply a ploy by the educated wealthy to use the tools of the state to restrict access by brave captains of the extractive industry to the public lands of the West (the better to go fly fishing)?

– outside of the struggle for control over “public lands” in the West, are there any other areas where voters oppose policies that “ignore links between ecology and economics”?

if “heightened environmental sensitivity” does come with “wealth and education”, what do we make of the concern that enviros, scientists, industry leaders, and politicians around the world all express concern about climate change and the pressure of economic activity on unowned commons like the atmosphere, oceans and tropical forests/wildlife?  More uninformed nonsense, led by evil man-haters?

By not stridently demanding privatization of public lands, John Baden sounds like an “incrementalist” rather than a pure libertarian, and by urging policies that favor recognition of the relatively higher values in environmental amenities than in extractive industries, he sounds very much like an environmentalist statist.  

Does it help us to better understand him, or the problems that concern him, if we call him a misanthropic “watermelon”?

 

Warning:  If you are an Austrian, you have just been gravely polluted by reading this.  Seek help immediately, and recite the “Corrigan Creed” (or as some may have it, the “Reisman Rule”) at least five times.

(If you missed it, the Corrigan Creed is here: http://mises.org/Community/blogs/tokyotom/archive/2007/12/17/holiday-joy-quot-watermelons-quot-roasting-on-an-open-pyre.aspx.)

Mises on fixing externalities: progress along the Kuznets curve is not magic, but the result of institution-building

October 11th, 2007 No comments

“Not all externalities are crimes, and as long as CO2 does not make clear victims, it should be left as an externality for people to adapt to ….”

In response to this statement on a recent thread (http://blog.mises.org/archives/007152.asp#comments), I observed, in the context of the impact of man’s activities on the climate, that:

But Mises, Yandle and others speak of transition points, that are reached when demand pressure grows as a result of social changes (including new forms of organization) or technological advances (which might also enable greater protection), when open-access resources fall first under common property regimes and then later under private property rights.

I think we are at one of those points now. (emphasis added)

When another remarked that a transition might seem to involve “mob rule”, I noted that Mises had expressly acknowledged the need for transitions and implied that the state could be used to address them, and briefly quoted Mises.  I take this opportunity quote more extensively Mises’ view on externalities, evolving property rights and the state (emphasis added):

Property rights as they are circumscribed by laws and protected by courts and the police, are the outgrowth of an age-long evolution.The legal concepts of property do not fully take account of the social function of private property. There are certain inadequacies and incongruities which are reflected in the determination of the market phenomena.

Carried through consistently, the right of property would entitle the proprietor to claim all the advantages which the good’s employment may generate on the one hand and would burden him with all the disadvantages resulting from its employment on the other hand. Then the proprietor alone would be fully responsible for the outcome. In dealing with his property he would take into account all the expected results of his action, those considered favorable as well as those considered unfavorable. But if some of the consequences of his action are outside of the sphere of the benefits he is entitled to reap and of the drawbacks that are put to his debit, he will not bother in his planning about all the effects of his action. He will disregard those benefits which do not increase his own satisfaction and those costs which do not burden him. His conduct will deviate from the line which it would have followed if the laws were better adjusted to the economic objectives of private ownership. He will embark upon certain projects only because the laws release him from responsibility for some of the costs incurred. He will abstain from other projects merely because the laws prevent him from harvesting all the advantages derivable.

The laws concerning liability and indemnification for damages caused were and still are in some respects deficient. By and large the principle is accepted that everybody is liable to damages which his actions have inflicted upon other people. But there were loopholes left which the legislators were slow to fill. In some cases this tardiness was intentional because the imperfections agreed with the plans of the authorities. When in the past in many countries the owners of factories and railroads were not held liable for the damages which the conduct of their enterprises inflicted on the property and health of neighbors, patrons, employees, and other people through smoke, soot, noise, water pollution, and accidents caused by defective or inappropriate equipment, the idea was that one should not undermine the progress of industrialization and the development of transportation facilities. The same doctrines which prompted and still are prompting many governments to encourage investment in factories and railroads through subsidies, tax exemption, tariffs, and cheap credit were at work in the emergence of a legal state of affairs in which the liability of such enterprises was either formally or practically abated.”

Whether the proprietor’s relief from responsibility for some of the disadvantages resulting from his conduct of affairs is the outcome of a deliberate policy on the part of governments and legislators or whether it is an unintentional effect of the traditional working of laws, it is at any rate a datum which the actors must take into account. They are faced with the problem of external costs. Then some people choose certain modes of want-satisfaction merely on account of the fact that a part of the costs incurred are debited not to them but to other people.

The extreme instance is provided by the case of no-man’s property referred to above. 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 repopulation of the hunting and fishing grounds. In the early days of human civilization, when soil of a quality not inferior to that of the utilized pieces was still abundant, people did not find any fault with such predatory methods. When their effects appeared in a decrease in the net returns, the ploughman abandoned his farm and moved to another place. It was only when a country was more densely settled and unoccupied first class land was no longer available for appropriation, that people began to consider such predatory methods wasteful. At that time they consolidated the institution of private property in land. They started with arable land and then, step by step, included pastures, forests, and fisheries. The newly settled colonial countries overseas, especially the vast spaces of the United States, whose marvelous agricultural potentialities were almost untouched when the first colonists from Europe arrived, passed through the same stages. Until the last decades of the nineteenth century there was always a geographic zone open to newcomers–the frontier. Neither the existence of the frontier nor its passing was peculiar to America. What characterizes American conditions is the fact that at the time the frontier disappeared ideological and institutional factors impeded the adjustment of the methods of land utilization to the change in the data. …

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.

http://mises.org/humanaction/chap23sec6.asp

Ludwig von Mises, Part IV (Das Handeln in der Marktwirtschaft), Chapter 10 (Kapitel: Die Daten der Marktlage), Sec. VI (Die Grenzen des Sondereigentums und das Problem der external costs und external economies), Nationalökonomie: Theorie des Handelns und Wirtschaftens (Geneva: Editions Union, 1940). The quote provided is from Mises’s expanded English translation, Chapter XXIII: “The Data of the Market,” Sec. 6: “The Limits of Property Rights and the Problems of External Costs and External Economies,” Human Action: A Treatise on Economics (New Haven: Yale University Press, 1949).

 

By the way, it has has elsewhere been noted on LvMI that with this essay, Mises explained how environmental problems arise from the lack of clear, appropriate and enforceable property rights some decades before bioethicist Garrett Hardin in his famous 1968 essay,  “The Tragedy of the Commons”http://mises.org/daily/1373But we should not ignore that Mises pointed not only at the problem of externalities, but also at the transitions that societies make, deliberately or through changes in customs, to reduce externalities.