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Sheldon Richman joins Gene Callahan in naively arguing that, IF man's activities are responsible for climate change, we need not government but simply louder and more obnoxious enviros

June 16th, 2010 3 comments

1. I noted in November 2007 Gene Callahan’s interesting post, entitled How a Free Society Could Solve Global Warming“, in the October 2007 issue of The Freeman: Ideas on Liberty, at the website of The Foundation for Economic Education (FEE). To reprise briefly, one of Callahan`s chief arguments is that public moral pressure is a perfectly appropriate way by which concerned citizens, acting in the market of public opinion, can influence behavior that generates externalities:

Even when economic transactions generate so-called negative externalities (activities that shower harms on third parties), I still contend that the free market is the best institution for identifying and reducing the problems.

One way negative externalities can be addressed without turning to state coercion is public censure of individuals or groups widely perceived to be flouting core moral principles or trampling the common good, even if their actions are not technically illegal. Large, private companies and prominent, wealthy individuals are generally quite sensitive to public pressure campaigns.

2. Sheldon Richman (editor of The Freeman and TheFreemanOnline.org, and author of Tethered Citizens) has now joined Callahan in offering to libertarians the argument that coordinated, mass moral suasion is a viable, efficacious alternative to the use of the state to address global warming. I excerpt below portions of Sheldon’s argument in “Fixing Global Warming for Fun If Not Profit; Free-rider problem overcome” (June 04, 2010)(emphasis added):

[Some] free-market advocates … in effect throw up their arms and say there is no way voluntary efforts could address catastrophic global warming. It’s the standard case regarding public goods: Free riders and prisoner’s dilemmas would thwart voluntary remedial efforts. Each individual would rationally calculate that he can let others make the sacrifices necessary to bringing about the improvement while continuing to do what he has been doing. That way he’ll get the benefits for free. The problem is that if everyone, or most everyone, follows this strategy the public good is never produced.

To be specific, if we stipulate that catastrophic (but reversible) global warming is happening, why would anyone voluntarily change his behavior to mitigate it? One person’s effort would make no difference anyway, so why be the chump? Let the others do it.

We’re doomed.

Unless there’s something wrong with the public-goods argument, as I and others think there is. (See, for example, Gene Callahan’s Freeman article “How a Free Society Could Solve Global Warming.”)

What About Government Failure?

It’s really odd to hear a free-market advocate resign himself to a government solution to the supposed global-warming “market failure.” In every other area where government is proffered as the fix for market failure, free-market advocates immediately fire back that government is itself riddled with free-rider problems. There’s a growing if belated literature on government failure. How can government be the answer to a public-goods problem when it suffers the same defect that allegedly plagues the thing to which it is supposed to be superior? How can government solve the public-goods problem when it itself is a public “good.” (I mean that strictly in the technical sense, of course.)

All the goods that government in theory is said to produce are public in nature; they would benefit most everyone. But that means the benefits would redound not only to those who contribute to their production but also to those who don’t, the free riders. Therefore, special interests should never fail to trump the general interest, since smaller groups are less affected by the free-rider problem than larger groups.

Income-tax rate cuts, for example, would benefit everyone, even people who did nothing to help achieve them, say, by contributing money to taxpayer organizations. In theory, then, income-tax cuts should be virtually impossible to achieve.

But income-tax cuts have been enacted in the past. In fact, far bigger things that should have been fatally plagued by the free-rider problem have happened, such as revolutions. They should have been impossible according to the theory. Everyone should have been hanging back waiting for everyone else to overthrow the oppressor. It’s a great way to gain freedom without taking any risks—except if everyone thought that way, no revolution would have occurred. But revolutions have occurred.

So in the political realm the free-rider problem can be overcome. We know it. It’s in the history books. But if it can be overcome in that realm, why not in others? It seems hasty to say it can’t happen. In fact, it has, for example in the effort to end the slave trade, which required a change in public sentiment. So global warming might be amenable to purely voluntary remedies, perhaps not via the traditional for-profit business plan but rather through a voluntary social movement that promoted an ethic encouraging and pressuring people and firms to cease their destructive activities.

The key is ideology, the set of explicit or implicit beliefs that motivates people to act one way or another in public matters even though individually they may reap minimal if any concrete benefits from their own marginal efforts. People are capable of acting to achieve things other than personal monetary profits. Homo economicus is an inadequate picture of the human race, a gross and misleading oversimplification.

“Ideology therefore becomes the wild card that accounts for public spirited mass movements that overcome the free-rider problem…, for ideology can motivate people to do more to effect social change than the material rewards to each individual would justify,” Jeffrey Rogers Hummel wrote (pdf) in another context.

Obviously there’s much more to say on the matter, but for now be aware that serious global warming would be no reason to abandon economic (or other) freedom. We can have our scientific objectivity and our liberty too.

3. In response, let me make the following observations:

3.1  Callahan and Richman want MORE moral outrage and arm-twisting from the enviros that Austrians and other lovers of so-called “free markets” seem to love to hate? Sure, I can see all the libertarians and right-wingers signing up in droves, to lead enviro-fascists in a holy war against fossil fuels!

But even if were libertarians WERE to wish to lead such a voluntary movement, how likely is it, given the long hostility that libertarians have expressed towards enviros, that enviros would put any credence in what such libertarians have to say?

3.2  Given what we know (from Elinor Ostrom’s research, etc.) regarding the conditions for voluntary coordinated action, even though it is very clear that we see attempts at moral suasion at play in local, state, federal and international climate-change-directed regulatory efforts, it seems very unlikely that moral suasion alone can be expected to prove efficacious at an international or global scale. Far too many communities, nations and economic interests are involved.

3.3  Moral pressure via an ideology is likely to be blunt.  As Silas Barta noted on a comment thread,

public boycott/suasion campaigns will only give a very noisy signal to corporations of how damaging their activities are to the environment, and it will be skewed toward more visible ones.

You’ve seen environmentalists (like the “Green Lantern” on Slate) try to calculate which activity is “truly” more damaging to the environment.  It manifests in, for example, the debates over whether shipping organic food a long distance is worse than shipping factory farm food over a short distance.

The fact is, even for very basic calculations, it gets complicated, and environmentalists will almost certainly have biased calculations and use them for non-climate purposes when wielding their power — that’s what they already do.

3.4  I think that Callahan and Richman are very right that societies can and do address public goods/commons without using formal legal mechanisms. In this, both echo Nobel-Prizewinner commons-expert Elinor Ostrom, This is a point that Bruce Yandle (a “free-market environmentalist” who is dean emeritus and Distinguished Professor of Economics Emeritus at Clemson University, Distinguished Adjunct Professor of Economics at the Mercatus Center, a faculty member with George Mason University’s Capitol Hill Campus, and a Senior Fellow at PERC – the Property and Environment Research Center) made earlier and that I noted:

People can build institutions that take the edge off frantic commons behavior. People have unwritten and written constitutions that help to establish social order. People can and do accumulate wealth. People communicate, invent lines of kinship, and develop customs, traditions, and rules of law that limit anti-social behavior. People define, enforce, and trade property rights. People can and do avoid the tragedy of the commons. Indeed, instead of living with tragedies, people triumph over the commons. But the triumphs are never perfect or complete. There is always another commons to manage.

I wish to put forward the notion that encounters with the commons form the fundamental stimulus that yields, instead of tragedy, what we today call civilization. The ascent of man from a primitive existence with no wealth accumulation to life as we know it is fundamentally a story about triumph over, not tragedy of, the commons. Let me explain.

Our very existence as human beings is defined by evolved institutions for avoiding tragedies. We have names, which serve the economic purpose of identifying us as parties to contracts and agreements. Those names, first and last, form webs of communication that reduce the social cost of assigning responsibilities and liabilities. They enhance truth-telling and promise-keeping; they raise the cost of engaging in anti-social behavior. They limit a tragedy of the commons.

We have abstract symbols of ownership—deeds, titles, and contracts—that define spheres of autonomous behavior. We speak of our homes, our cars, our clothes, our families, and our pasture. Even language has evolved to provide a possessive form that accommodates triumph over the commons.

We write and observe contracts, wills, and marriage agreements that define relationships, identify turf, and conserve wealth. We accept evolved bodies of law and law-enforcement activities to assure the integrity of our agreements. We carry papers that enable us to acquire property, extinguish debt, cross borders, drive vehicles, and communicate effectively with strangers. And we have locks, keys, walls, fences, brands, and encryption devices, all this in an effort to avoid a tragedy of the commons.

Property rights define who we are and what we have. Property rights guard others from our unwanted advances and prevent us from contributing to a tragedy of their commons.

Avoiding a tragedy of the commons is costly. The benefits must be large. …

The tragedy is found where for reasons having to do with power, intolerance, or cost, human beings have not yet defined private property rights. Or, as we shall see, where evolving property rights encouraged by man the institution builder have been destroyed. What was once a triumph can become a tragedy. …

[At] very low levels of income, what might be called stage one, human beings cannot afford to do much about property-rights enforcement and the commons. They live in a world where custom and tradition sustain them. As incomes rise and losses from the commons expand, stage two is entered. Fences go up, and rules are set for protecting the commons. Finally, in stage three, markets evolve along with rules of law that define spheres of private and public action. Private rights replace public control, and the triumph replaces the tragedy of the commons.

3.5  What about statist corporations? What Callahan, Richman and Yandle all miss is that the current status quo is very much NOT a libertarian one, but one in there are powerful vested interests that profit from using government to shift risks to the rest of society. This is very visible in our financial crisis, Wall Street profiteering and bailouts, the elites running public companies, fights over publicly-controlled natural resources (such as oil) and the messes mineral extraction activities leave behind, and in the damages and risks created by the use of fossil fuels.

Very noticeably, all of these commenters are silent as to how likely any of the people who profit from the use of government – and who are both relatively faceless and face incentives peculiar to corporate ownership, management or employment (and not simply the same incentives that face our personal and extended local, state, national or global communities) – are going to worry very much about public opinion, as opposed to continuing to work actively to mold and assuage it.

 

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A BP Reader: statist corporations, "the environment" and the Tragedy of the Government-Owned/-Managed Commons

June 16th, 2010 No comments

For lack of a better place I left the following note on the moribund comment thread at Lew Rockwell’s May 5 “Feel Sorry for BP?” post:

TokyoTom June 16, 2010 at 2:41 am

It’s more than a little disappointing – given how serious the economic damage being wrought by the BP situation is, and the role of government and BP in the genesis of the problem – how unproductive this thread has turned out to be.

Here is more information and analysis for any interested Austrians out there:

My related blog posts (including comments on/links to posts by Sheldon Richman, Kevin Carson, Ed Dolan, Matt Yglesias, Scott Sumner and Shawn Wilbur) can be found here: http://mises.org/Community/blogs/tokyotom/search.aspx?q=bp

Roderick Long has links to various posts by others (Carson, Richman, plus Darian Worden, Gary Chartier, Alex Knight) here:
http://aaeblog.com/2010/06/08/roundup-on-bp/

My posts on fish and ocean drilling are also relevant:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=fish
http://mises.org/Community/blogs/tokyotom/search.aspx?q=ANWR

Regards,

Tom

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Matt Yglesias, like many Austrians, misses the role of government in "Agency Problems and Corporate Misconduct"

June 10th, 2010 No comments

Another BP post!

As I noted yesterday, liberal blogger Matt Yglesias has a useful blog post up – “Agency Problems and Corporate Misconduct” – in response to Scott Sumner; unfortunately his comment thread has fallen into blind, clear-sighted partisan bickering.

 The post itself is short and worth a read; I left the following comment:

  • TokyoTom says:

    Excellent points, Matt; you seem more conservative (and Austrian) than the Chicagoans.

    However, you fail to note that government itself pays a crucuial role in “agency problems” via its grant to shareholders of limited liability (and unlimited life+purposes, and ability to ring-fence riskier activities in subsidiary corporations). Besides leading directly to large corporations, it incentivizes shareholders to passively enjoy dividends while not investigating too closely the systematic shifting of risk to others via pollution, or efforts to seek political influence, that accompany dividends that cannot be clawed back.

    Lack of dowside risk ironically also frees management from close shareholder oversight, leading to heighted internal moral hazard, as management can look after their own compensation and bonuses while leaving shareholders with downside risks for poor management (as we have seen in Wall St firms once they went public).

    For those interested, I have a string of posts on limited liability here:

    http://mises.org/Community/blogs/tokyotom/search.aspx?q=limited

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    More useful discussion by Carson, both on BP’s fate in a free market, and on the inept, feckless and captured regulatory state

    June 9th, 2010 3 comments

    Another BP post!

    Both of Kevin Carson’s most recent posts at Center for a Stateless Society are worth a read.

    BP’s Fate in a Free Market, Part Two

    How’s All That Progressive Regulatory Stuff Workin’ Out For Ya?

    In particular, Kevin’s “Part 2” post – and the comments to it and posts by others whom he references – are quite thoughtful. Below are some points that I think deserve particular attention (emphasis mine):

    Shawn Wilbur, a leading scholar in the history of the individualist/mutualist tradition in addition to being an anarchist himself, agrees that oil companies like BP would be far less able to externalize costs on the public in a free market order, absent such privileges as caps on liability.  But he goes on to raise the issue of the “many kinds of value and interest” that are not adequately represented by markets:

    “After all, sea turtles and brown pelicans don’t get any more of a vote in the market than they do in elections or campaign contributions. Private property conventions tend to establish a separation of interests not reflected in, or respected by, the circulatory systems of the biosphere …”

    Gary Chartier, a market anarchist professor at La Sierra University, commented that since sea turtles lack any means of effectively asserting or defending rights on their own behalf, their interests in any system — whether under statism, market anarchy, or any other kind of anarchy — depend entirely on the existence of human beings who identify those interests with their own.

    I would add that the present system includes many structural barriers that prevent humans who value the interests of other species or of the ecosystem from expressing that valuation in the marketplace.  For example, federal lease auctions allow only companies from the relevant industry (lumber, mining, etc.) to bid on access to federal land.  That means conservationists who value holding land out of use are banned from the bidding process, that the winning bid is hence lower than it likely would otherwise have been, and that resource extraction is artificially profitable.  Federal preemption of vacant land means, likewise, that the privileged access granted by the federal government is uncontested by other previous claimants.

    Were vacant land not preempted by the state and then granted on a privileged basis, then the oil, mining and lumber companies could establish legitimate homestead rights only over the land that they were capable of effectively developing and fully prepared to economically exploit at any given time.  In the meantime, other groups might have homesteaded significant parcels of land with the intention of conserving  it.  As Wilbur himself states in the comments under his post, “active conservation” — like “a wildlife corridor, or critical wetland, or scenic area” — is “pretty obviously a use.”  In a free market regime with open homesteading, lumber and other extractive industries would have to buy out such competition at whatever price the latter demanded, if they were willing to sell at all.

    As I mentioned in another post, one reason the ecosystem in West Virginia has had so little protection against mountaintop removal, is that the property rights of small owners had so little protection against expropriation, and the surrounding communities had been robbed of so much of their common law protection against tortious action by the mining companies against their air and water.  As chronicled in the movie “Matewan,” the first white homesteaders in West Virginia — who mostly lacked formal title to their land, having settled when government was still quite irregular — were later expropriated by the mining companies, who could afford to buy both good lawyers and bad legislators.

    I would observe that Austrians at LvMI routinely discount – if are not actively hostile to – the preferences that non-industrial users (and destested “enviros”) have regarding common or publicly-owned resources. This is clearly inconsistent with Austrian principles. Further, Austrians also generally – and wrongly – treat with scorn even the notion that there are commons assets – such as “ecosystems”  that are important and valuable. Austrians are wrong to have their thumb on the scale in the way that they do when determining how government favor should be bestowed; this tendency amounts to fairly consistent support for/defense of statist corporations.

    Kevin is entirely correct that “the present system includes many structural barriers that prevent humans who value the interests of other species or of the ecosystem from expressing that valuation in the marketplace.” So let me connect a link that somehow Kevin has overlooked in the context of the BP oilwell blowout and spill: the chief structural barrier here is the US government, which “owns” and “manages” the Gulf out to the 200 mile limit (there is moderate state control out a few miles), and which prevents indigenous and commercial fishermen, oystermen, shrimpers and conservationists from actually owning or directly managing any of the resources or ecosytems on which their livelihoods depend or that they otherwise value, and which is favors and is financially beholden to the oil industry.

    See, for example:

    http://mises.org/Community/blogs/tokyotom/archive/2009/01/14/for-crashing-fisheries-coalition-of-mainline-us-enviro-groups-calls-for-property-rights.aspx

    http://twitter.com/Tokyo_Tom/status/15689063688
    http://twitter.com/Tokyo_Tom/status/15689222932

    I think Kevin that is also correct about mountaintop removal, which involves a frequently flagrantly corrupt use of the state to subvert common-law protections, as I have commented a number of times.

    I also highly recommend the post by Shawn Wilbur that Kevin references; I may comment separately on it.

    And the following comment on the state grant of limited liability to corporate shareholders is consistent with points I have made any number of times:

    Brian Cantin on Jun 7, 2010, 9:53 pm: [I hope Brian does not object]

    Without the government, a limited liability corporation would not have the protections they enjoy today. The corporation could gain limited liability if it is obtained via contract. Why anyone would sign a contract allowing a corporation limited liability is another question.

    However, in the case of a tort, the owners of offending corporation would not only be possibly liable for the all of the assets of the corporation, they could also be personally liable down to their last farthing.

    Strict liability is a great inducement to careful practices.

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    Kevin Carson says, "In a Truly Free Market, BP Would Be Toast"

    June 9th, 2010 No comments

    Another BP post!

    I copy below some comments I left on the above-entitled post by Kevin Carson (slightly tweaked, with emphasis & links added):

    TokyoTom on Jun 9, 2010, 1:39 am:

    Kevin, good post. I imagine that the $75 million liability cap affected decion-making by BP managers in any number of ways, but let me note that the cap doesn’t apply (1) to claims by state and local governments and (2) if BP is determined to have been grossly negligent (since this cannot be determined in advance of final judical decision, a potentially much larger sword was hanging over BP’s head, even if it was discounted to zero by BP). Still, I agree with you about oversight by insurers, but one wonders whether BP actually insured any of its risk here. They certainly have been more likely to do so if there was no liability cap whatsoever.

    You fail to note some other, more basic government interventions, particularly the grant of zero liability to shareholders, which perversely both (i) incentivizes shareolders to look the other way at corporate activities that profitably shift risks to third parties and (ii) generates agency problems which leave shareholders vulnerable to poor decision-making by executives.

    Finally, you and celocelo1 miss another way for society to force oil cos like BP to internalize more of their costs – expand and formalize “catch rights” programs that empower fishermen and other resource users (including when and where oil/gas is developed), and would give direct rights to sue polluters, and end the current system, where fishermen are both trapped in a tragedy of the commons and beholden to government for protection of the resources and for some recompense in the case of damages suffered. I discuss catch rights over at my blog.

    Regards,

    Tom

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    Scott Sumner misses government role in "sh*t happens"; epitomizes discussions of BP/offshore oil development

    June 9th, 2010 No comments

    Another BP post!

    1. Over on his The Money Illusion blog, Chicago-school economist Scott Sumner has a curiously uninsightful post up on the BP oil spill: “Stuff Happens“. Perhaps some of my friendly enviro-hater readers here might like it, but I didn’t. I left the following comments (still pending approval as I copy them here) (emphasis added):

    Scott, what you’re rather glaringly missing with your cost-benefit analysis – which blithely ignores the real face of “externalities” – is the institutional setting, which can be summed up as a tragedy of the government-owned and (rather expensively) mis-managed comonns.

    Ed Dolan is exactly right about incentives problems facing BP and regulators, none of whom really directly own the downside risks, which instead are borne by fishermen, oystermen, shrimpers, the tourist industry, those who value wildlife and a clean environment, and those who consume what harvesters catch. Some of these are very marginalized communities, but all face tremendous difficulties organizing and expressing their interests effectively with respect to resources on which their very livelihoods may depend, but in which they have no ownership rights.

    On the other hand, the oil industry are very powerful actors, very well organized and represented in the corridors of power and influence (remember Cheney’s secret energy meetings, and that BP was one of Obama’s largest donors?), and are adept at shifting risks to others (though self-damage is possible when catastrophic losses occur). As Ed Dolan rightly notes, this is built into their very nature as a result of the government grant of limited (zero) liability to shareholders, who have disincentives to monitoring too closely or to questioning whether profits come at the expense of others who – because of government ownership – have no effective voice regarding losses they bear.

    It’s hard to feel much sympathy for either the oil cos or government in theis Avatar-like situation, but I don’t mean to castigate either as “evil”. Rather, we simply need to take a close look at the problems of Moral Hazard that our government interventions – from grants of limited liability, to government resource ownership and concomitant inept and occasionally management – have been fuelling.

    Answers lie not in gross CBA analysis, but in letting resources users own the rights to manage and harvest wild resources (which would give them direct claims agains polluters), AND to determine when and where seabed resources are developed. (NOAA’s successful experiments with “catch rights” need to be vastly scaled up.) We would still have oil & gas development, but the fishermen would do a vastly better job of policing the oil companies – who would have to face other resource users with full incentives and abilities to protect their livelihoods. (Obversely, oil companies would also be better managers if they had control over the very valuable fish harvest rights in particular blocks, and would manage to in a way that would reflect such value.

    Sincerely,

    Tom

    Austrian-leaning Ed Dolan, whose recent post on Moral Hazard and agency issues I have just noted, joins in on the comment thread. 

    Sadly, Sumner is not alone in paying little attention to those who are at the short-end of the messy oil stick.

    2. Liberal blogger Matt Yglesias has a useful blog post up in response to Scott; unfortunately his comment thread has fallen into blind, clear-sighted partisan bickering.

    3. I see Richard Posner now has a similar blind piece of blather up at the Washington Post: “From the oil spill to the financial crisis, why we don’t plan for the worst”; more on Posner perhap’s later.

    4. Sadly/fortunately, for those of you who haven’t seen or (or could use a little further diversion) this litle one-minute “BP kittens ” YouTube video does a better job than virtually all discussions I’ve seen in noting relevant agency and institutional failure issues.

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    Ed Dolan on Other People's Money: Government, Oil Spills, Financial Crises & Limited Liaibility

    June 8th, 2010 No comments

    Ed Dolan (Professor at Stockholm School of Economics in Riga, Latvia and editor of the Austrian classic, The Foundations of Modern Austrian Economics (online here), and author of the classic pamphlet TANSTAAFL: An Economic Strategy for the Environmental Crisis (1971), has a post up at his new economics blog that ties together the above subjects, each a favorite of my own.

    As I noted in a recent post referring to BP and ocean ecosystems :

    Aren’t there huge and obvious commons-related problems that stem from government ownership and “management” of resources – be they federal lands, the seas, our fiat currency, or our financial institutions and publicly-listed companies?

    But enough of me; here is the meat of Mr. Dolan’s post, What Oil Spills and Financial Crashes Have in Common: Gambling with Other Peoples Money (emphasis added):

    :What do the Gulf oil spill and the recent financial crisis have in common? Both of them are the result of risk-taking gone wrong. …

    The real trouble comes when you have a chance to gamble with other people’s money. Then you start looking for strategies that usually give you at least a modest payout even though they involve a small chance of catastrophic loss. These are called negatively skewed risks. You take these risks, even if you know they have a negative expected value, because you think you will pocket a gain most of the time. You expect that when disaster finally strikes, you will be able to walk away with your past winnings in the bank while sticking someone else with the loss.

    Several common situations in business life give rise to the temptation to gamble with other people’s money. Executive compensation plans that emphasize short-term bonuses, include golden parachutes, and lack clawback provisions are one example. Not only top executives face such incentives–mid-level traders, engineers, and analysts may also take risks in the hope of bonuses or promotions, with the expectation that the worst that can happen in case of catastrophe is that they lose their jobs. Stockholders may condone such risk taking because they are protected by limited liability.

    Both the Gulf oil spill and the financial crisis had their origins in negatively skewed risks. Investigators in the Gulf disaster are looking at whether BP and its contractors underplayed downside risks when they made technical choices, ignored warning signs, and neglected preparations for dealing with a worst-case spill. In the financial crisis, negatively skewed risks involved excessive leverage, manipulation of ratings, design of complex securities, and several other factors.

    What can be done? Regulations can be made stricter, but who will regulate the regulators? Who will ensure they are not captured by special interests? Compensation plans can be changed–but if shareholders do not take the initiative, can outsiders fix the system for them? Corporations can be held to strict standards of legal liability, but individuals who make bad decisions are not necessarily the ones to pay when their corporate employers are found liable.

    There is no magic bullet. We can only hope that after a couple of really big disasters, people will be more alert to early warning signs the next time.

    What Ed has failed to note is that both the financial crisis and the BP oil spill/Gulf crisis are examples of the “Tragedy of the Commons” – when the commons are either the government pocketbook itself, or resources owned/managed by the government. Solutions to management of the Gulf lie in giving more rights – such as “catch rights” and a veto over oil and gas development – directly to resource users like fishermen. With their livelihoods on the line, they would be much more diligent than government can ever be in making sure oil and and gas development proceeds safely.

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    Who’s at the short end of the stick when Government "Play[s] Fast and Loose with Civilization" in the Gulf of Mexico?

    June 8th, 2010 No comments

    Another BP post! [links updated] I have just stumbled across  by Jeffrey Tucker’s May 27, 2010 post on the Mises Economics Blog regarding the Obama administration’s decision, in response to the BP mess in the Gulf, to suspend consideration of applications to drill in the Arctic.

    1.  I was inspired to leave a few comments, which I copy here [a link or two added; my apologies for the bolding, but I’ve been out-witted by the html]:

    TokyoTom June 8, 2010 at 5:14 am

    “But what strikes me as just how willy nilly the state acts toward the goods and services that fuel civilization itself.” “rarely been more obvious, day to day, that the machinery of the state, while pretending to be the caretaker of mother earth, only destroys hope for real human beings.”

    Jeffrey, how true – but how ironic and sad that, like Lew, you only look at the potential impact on US consumers (and businesses) of Obama’s (much, much, MUCH delayed) action to suspend consideration of applications to drill in the Arctic (and now elsewhere on the OCS), but ignore the PRESENT and very real impact of incompetent and corrupt government management on all of the people who live in, on and draw their LIVELIHOODS from the Gulf of Mexico commons that are now being despoiled by the BP spill. I mean, aren’t losses to fishermen and others in the Gulf region staring us in the face?

    See, e.g., the reports here on marginalized fishermen http://twitter.com/Tokyo_Tom/status/15689063688 http://twitter.com/Tokyo_Tom/status/15689222932And it’s a shame that, rather than float ideas on how to end the Tragedy of the Government-Owned/-Managed Commons – such as expanding fishermen’s rights to manage Gulf resources – you see fit to suggest that the real solution lies in more Avatar-like Drill, Baby, Drill! resource exploitation under the current and obviously flawed rules. As for the rest of you, generally my disappointment with shallow, partisan thinking continues. Perhaps a cut and paste from a recent post will serve? http://tokyotom.freecapitalists.org/2010/06/04/bp-39-oil-spills-inconvenient-quot-ecosystems-quot-reason-tv-rants-quot-dying-oceans-quot/

    I continue to scratch my head on the knee-jerk reactions by Austrian-libertarians on problems regarding management of common resources: are not our physical and electronic communities commons? Don’t commons support many people directly, and us all indirectly? Aren’t there huge and obvious commons-related problems that stem from government ownership and “management” of resources – be they federal lands, the seas, our fiat currency, or our financial institutions and publicly-listed companies? Don’t we all know that government gets in the way, frustrating the ability of people with differing preferences to search for and reach mutual accommodations, and instead putting them at loggerheads in zero-sum situations? The unbecoming reflexive hostility indicates that even those who think they have their thinking caps on cannot see past the partisan conflict that government itself generates. Kind regards, your resident Austrian misanthrope, Tom

    2. For those who want to put their thinking caps on, I note that I have a number of posts on managing commons resources – see my posts on Nobel-Prizewinner Elinor Ostrom for starts – and on fisheries and on federally-owned oil and gas resources like the OCS and ANWR. They might provide a little grist for the mill.

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    Time-out for some light humor on BP's "ecosystem": The BP Oil Spill Re-Enacted By Cats in 1 Minute!

    June 7th, 2010 No comments

    Another BP post!

    Warning: salty language from salt-of-the-Earth people kittens:

    [View:http://www.youtube.com/watch?v=zt617zYAbng:550:0]

     

    The creator can be found here on Twitter: http://twitter.com/tremendousnews.

    This seems to be getting some play, so head’s up you culture-watchers!

    While this unfortunately skirts addressing the Federal Government’s role in engendering the BP catastrophe, one has to wonder — Does it make any sense to treat corporations as “persons”, given the differences in incentives structures?

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    As BP's oil spills into one of those inconvenient "ecosystems", now even Reason TV rants about "dying oceans"

    June 4th, 2010 No comments

    Another BP post!

    I continue to scratch my head on the knee-jerk reactions by Austrian-libertarians on problems regarding management of common resources: are not our physical and electronic communities commons? Don’t commons support many people directly, and us all indirectly? Aren’t there huge and obvious commons-related problems that stem from government ownership and “management” of resources – be they federal lands, the seas, our fiat currency, or our financial institutions and publicly-listed companies?

    Don’t we all know that government gets in the way, frustrating the ability of people with differing preferences to search for and reach mutual accommodations, and instead putting them at loggerheads in zero-sum situations?

    The unbecoming reflexive hostility  indicates that even those who think they have their thinking caps on cannot see past the partisan conflict that government itself generates.

    But I dither.  Allow me to gather here for interested readers some scraps of information regarding the state of our oceans.

    1.  From my initial response to Lew Rockwell‘s “Feel Sorry for BP? ” post:

    Lew: “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.”

    Me: Seems to me your “facts” about the damage done by Exxon Valdez to the “environment” – including the small segments used by by man – and recovery/compensation are basically counterfactual:

    http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill

    http://www.alternet.org/environment/22260

    Further, it seems you don’t have any real clue as to the escalating damage that man is doing to our shared ocean “commons”. These two TED talks might help open your eyes:

    http://www.ted.com/talks/jeremy_jackson.html

    http://www.ted.com/talks/sylvia_earle_s_ted_prize_wish_to_protect_our_oceans.html

    2.  While I think this understates the size of the BP spill, it is still a useful explanation for how the spill trauma differs from natural oil seeps:
    The Oil Drum | Natural Oil Seeps and the Deepwater Horizon Disaster: A Comparison of Magnitudes http://bit.ly/9KZGm4
    3.  Those radical enviros over Reason.tv seem to share my concerns; they have put up a new video on June 2 with the alarmist title: “How To Save A Dying Ocean“.  It was written, produced and hosted by Ted Balaker. Nick Gillespie cross-posted it to Big Government.com, where there is another comment thread. In both places, readers/viewers seem not to have noticed that environmentalists are now solid supporters of privatizing fisheries.
    Here’s a chunk of the description:

    The Gulf of Mexico continues to gush oil just as a whaling controversy threatens to land Australia and Japan in international court for killing protected species. Meanwhile, another less-publicized but arguably more cataclysmic oceanic disaster continues to worsen.

    Overfishing threatens to destroy most of the world’s fisheries within a matter of decades. …

    “Everything in the ocean from the great whales to dolphins to plankton is being jeopardized,” Psihoyos tells Reason.tV. “We’re raping and harvesting the ocean unsustainably.”

    Overfishing “could mean the end of certain species,” agrees UC-Santa Barbara’s Costello. He points out that about a third of the world’s fisheries have already collapsed, and many more are heading toward the same fate. Costello says the world’s fisheries are in such bad shape because of the same reason public restrooms are typically foul places: “Nobody owns them. Nobody has the incentive to keep them up.”

    One proven solution is a system called “catch share,” in which fishermen have the right to a certain share of the total catch of a type of fish. This form of ownership gives fishermen an incentive to make sure fish populations grow, and according to Costello’s worldwide research, it’s the only thing that seems to work.

    Environmentalists are often suspicious of the profit motive, but from Alaska to New Zealand, market forces have been harnessed not for plunder but for preservation. Fishermen like the system because they make money, and environmentalists like it because it supports sustainable practices. Expanding the catch share system may well be the best way to save a dying ocean.

    Here’s the video – which is worth a look:
    [View:http://www.youtube.com/watch?v=MI80VVpTGkQ&feature=player_embedded:550:0]

    4.  I note that I have already posted extensively on oceans/fisheries management; for interested readers here are links to some of those posts:

    http://mises.org/Community/blogs/tokyotom/search.aspx?q=ocean

    http://mises.org/Community/blogs/tokyotom/search.aspx?q=fisheries

    http://mises.org/Community/blogs/tokyotom/search.aspx?q=whale

    5. Finally, one wonders whether, if fishermen in the Gulf of Mexico had clear “catch rights” or similar property rights, and had control over oil gas exploration and development decisions, they would not have done a good deal better in overseeing BP, and whether BP would not have been quite a bit more careful.( Likewise – if BP owned the Gulf, and received revenues from permitting fish harvests!)

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