Home > Uncategorized > Corporations uber Alles: Conveniently inconsistent on "abstractions" like "the environment", Austrians overlook their preference for "corporations" over individuals,& their lack of interest in problem-solving

Corporations uber Alles: Conveniently inconsistent on "abstractions" like "the environment", Austrians overlook their preference for "corporations" over individuals,& their lack of interest in problem-solving

I have already criticized Lew Rockwell’s May 5, 2010 piece, “Feel Sorry for BP?”; and commented on a response that I received from Stephan Kinsella; I’d like here to  focus on a curious inconsistency.

1. I note that Lew Rockwell asserted that: (emphasis added)

The abstraction called the “ecosystem” — which never seems to include mankind or civilization — has done far less for us than the oil industry, and the factories, planes, trains, and automobiles it fuels.”


the environmentalists went nuts yet again, using the occasion to flail a private corporation and wail about the plight of the “ecosystem,” which somehow managed to survive and thrive after the Exxon debacle.”

While I questioned whether Lew really intended to assert that resources like air, that we use freely from the atmosphere are “far less” important to us than the oil-derived energy we use and disagreed with his facts about the continuing effect s of the Exxon Valdez spill), I agreed with him that the “ecosystem” is an abstraction that may often be unhelpful (emphasis added):

Austrians understand that focussing on the “ecosystem” is often an unhelpful abstraction and distraction from the fact that there are competing and conflicting interests held by people in resources that are not effectively owned or managed. The Austrian focus is on how to enable those with conflicting desires to coordinate their planning …

This perspective was neatly summarized by Roy Cordato, who said (emphasis added)

“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 “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.”

“pollution 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.”

Even while I agree with Cordato about he focus on plan formation, concepts such as “ecosystems” and the “environment” may still be useful, and are often simply short-hand for resources “in the commons”, that is, resources that people value but are either unowned, partially-owned, commonly-/community-owned or government-owned. Some readers may recall that Elinor Ostrom the winner of the Nobel Prize in Economics last year, is a political scientist in the Austrian tradition who has devoted her career to studying human management of common resources? Lew himself expressly recognized the usefulness of “environment” in this case:

in a world in which government owns vast swaths, and the oceans are considered the commons of everyone? It becomes extremely difficult to assess damages to the environment at all.

2. Despite Lew’s focus on the abstraction of the “ecosystem”, it was curious that Lew (a) asserted that BP is by far the leading victim” (my emphasis)  and that “The incident is a tragedy for BP and all the subcontractors involved while (b) severely castigating what I referred to in my post as “those nasty enviros” and their nature-loving, misanthropic motives. Lew’s words:

torrents of environmental hysteria.

the environmentalists went nuts yet again

he environmentalists, with their fear mongering and hatred of modern life [are happy about the disaster]

The environmentalists are thrilled because they get yet another chance to wail and moan about the plight of their beloved marshes and other allegedly sensitive land

The main advantage to the environmentalists is their propaganda victory in having yet another chance to rail against the evils of oil producers and ocean drilling. If they have their way, oil prices would be double or triple, there would never be another refinery built, and all development of the oceans would stop in the name of “protecting” things that do human beings not one bit of good.

But as I noted in my response, Lew fails to follow the Austrian insight that the focus should be on human plan formation and conflict resolution. What does he mean by the abstract term “environmentalists” – just who are they and what do they want, and how can Austrians provide advice on how to enable parties with conflicting goals and preferences to resolve their conflicts? In the case of the BP oil spill, there is very ;little room between the “environmentalists” and ordinary Gulf coast resident. In any case, as I noted previously,
Surely any clear-thinking Austrian can see that, just as Austrians hate our modern kleptocratic, incompetent and moral-hazard-enabling government, many enviros are relatively well-off people who dislike how “modern life” seems to take for granted the way government-ordered “capitalism” enables a systemic shifting of risks from manufacturers to those downwind and downstream, and to all who enjoy what remains of commons or government-owned property.
The Austrian focus is on how to enable those with conflicting desires to coordinate their planning, not to engage in some muddle-headed balancing of collective “utility” that says one powerful group of users is “right”, so other claimants should be scoffed at and chased away.
Lew, of course, is entitled to his own preferences, but it is fairly clear that his purposes are NOT to aid conflict resolution, but to bash one group of people whose preferences regarding common and government-owned resources conflict with those of another group whose interests he favors.
3.  And so I arrive at my principal point:  In pushing his preferences, Lew has not only failed to help any of us understand who “environmentalists” are and what they want, but he has also fail to identify just who  “BP” is, that we are supposed to feel so sorry for.
“BP” is corporation – a legal entity created by the state – and is not itself any one person, but a complex organization of very many people. Sure, we should feel sorry for the families  those who lost their lives (employees of contractors) – but they receive only passing mention from Lew. Who is left to feel sorry for –  BP’s highly paid executives, who like those of Halliburton and Transocean, are busy trying to find someone else to blame for the blowout, failed shutoff valve, lack of response preparation, and resultant enormous and continuing spill (that even now – with the complicity of the Administration) – they continue to low ball by orders of magnitude)? Other employees, some of whose routine has been interrupted by the damage control efforts, but remain gainfully employed? Or are we to feel sorry for the mass of shareholders, whose dividends might be cut, but not by the full amount of losses that others will suffer? Employees who feel some psychic pain at the blow to their company’s reputation (direct or indirect moral suasion from those injured or who feel enough stake in the matter to be upset)?
Lew refers to the government viewing “every capitalist producer as a bird to be plucked” – but none of BP’s shareholders is a capitalist producer. Someone may be plucked by government from time to time, but this time, pray-tell who is plucking whom?  Sure, Obama’s press secretary, Robert Gibbs, can make unsavory boasts like the government plans to keep “its boot on BP’s neck” but as BP HAS no neck, a little specificity as to whom the government may be oppressing would be helpful in weighing Lew’s arguments.
Without any specificity of whom we are to see as they “biggest victim”, it seems that Lew’s complaint amounts to little more than sympathy for executives and shareholders under our current system of statist corporations, firms that exploit government and then whine about the groups of citizens who inevitably feel they have to seek redress from government. If this is the defense that Lew intends, then it is one I’d be grateful to see him elucidate more carefully, in response to my reply to Stephan Kinsella. I think Sheldon Richman and Kevin Carson would also be grateful.
While corporations are composed of people, they themselves are not people. Accordingly, while I certainly agree with Lew that “there is every reason to express great sadness for what has happened”, Lew is ALSO right that “the idea that BP should be hated and denounced is preposterous” – because BP is just a thing, a legal fiction, and not any particular person. For that reason, the very idea that BP is the “leading victim” or that we should “feel sorry for BP” is, as Lew says, preposterous.
4. In this context, let me note my ongoing strong disagreement with Stephan Kinsella about the state grant of limited liability to shareholders. Stephan seems to think that the grant is irrelevant (despite the fact that it is one of the chief reasons why investors choose the corporate form) since, under the system of large public corporations that has arisen as a result, it would be unfair to ascribe any liability to shareholders who did not personally direct any action that damages others. (This, is of course, besides the point – the grant itself is cannot be justified on libertarian grounds, and it clearly affects choices of corporate form and subsequent corporate behavior and oversight dynamics.)  I agree with Stephan that it is crucial that libertarians not lose their focus on individuals when examining any organization – but note that the slippage in focus from individuals to large, impersonal organizations where personal responsibility is extremely difficult to locate is precisely one of the salient consequences of the state grant of limited liability corporate status.
I also note that despite Stephan’s insistence that only managers and employees who caused damage to third persons or their property should have any liability (and individual shareholders carry no burden of responsibility without any direct involvement in particular decisions), Stephan too falls easily into defending an impersonal”BP” while bashing the perennially undefined “enviros“, whom he sees generally as “cancer on the earth … anti-human, anti-industrialist sickos [who] are the real enemies of humanity.”  Is it too hard to expect some consistency in focus on individuals, both in and out of corporations, instead of a lumping of groups into “good” and “evil”?
5. Let me make a final reference to Cordato, who states (emphasis added):
“The Austrian focus is on how to enable those with conflicting desires to coordinate their planning …”
“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.”
“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.”
In the case of the BP spill or other “environmental” issues, are either Lew Rockwell or Stephan Kinsella remotely interested finding ways to solve interpersonal conflicts over common resources or resources with poorly defined property rights? Or are they simply engaged in a reflexive tribal defense of “corporations” against malevolent, grasping citizens – the so-called “enviro-fascists”?
And am I the only one who thinks it is no small disgrace that so many Austrians prefer “smashing watermelons” to hard work, and is left wondering – if we must use terms like “misanthrope” – just who the misanthropes are?
Scratch that last thought – clearly peppering one’s speech with fulminations about the evil intentions or actions of other is not an effective approach to discourse, trust-building or problem-solving. This misanthrope refuses to further cloud his own mind or to impair his feeble powers of persuasion.


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