TT's Lost in Tokyo — by TokyoTom

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.

TokyoTom June 8, 2010 at 5:14 am

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.

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?

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

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!)

Well, one may well argue that, if BP were a person, it would be “a career criminal”, but surely not all corporations behave in a criminal matter.

Nevertheless, I think we all recognize that although corporations are owned, managed and staffed by real people, the incentives that people in such organizations face and their consequent collective behavior – what we call the behavior of “the corporation” – may differ quite markedly from those of ordinary, living and breathing humans who live in communities, and from people in groups that do not have limited liability (a feature that underlies the pervasive and increasingly enormous and costly  “moral hazard” problems that our society now confronts), unlimited life and purposes, other favors granted by the state, which have less political power, and for which the “principal-agent problem” is less severe.

So does it make any sense to treat “corporations” under the law – or for purposes of discussions on LvMI pages – as if they have the same rights as real persons?

Allow me to refer to a post I did in wake of the recent Citizens United decision by the Supreme Court : Speech and Sociopaths: Does it make sense to collapse, for Constitutional and legal purposes, the distinctions between human beings and corporate “persons”?

My other posts on the Citizens United decision are here.

Daniel McCarthy, senior editor of The American Conservative, posted a thoughtful essay the June 1 issue, Better Red.

Here are a few excerpts (emphasis added); skip to the last paragraph if you’re in a rush:

Everyone’s worst fears for America are coming true. The traditional Left sees increasing inequality and falling real wages for workers. The libertarian Right grows alarmed at the federal government’s ever heavier hand in the economy—from bailouts to healthcare reform—and the steady erosion of civil liberties before the flood tide of the national-security state. Cultural conservatives, meanwhile, lament a toxic environment of competitive sex and recreational violence. Americans still enjoy freedom of a sort, but not old-fashioned economic or political liberty, only the chimeras of lifestyle choice.

You can sleep with whomever you want, but there will be no legally binding commitments, and whether you keep your house or your children will be up to a judge. You can quit your job at any time, but good luck finding another. You can vote for the Republican or Democrat of your preference, and they will both give the country bigger government and more wars. Even which church to attend is a consumer choice, as self-interested and trivialized as which soft drink to buy. For all the fetishization of choice, Americans are taught by their institutions that there is only one way to live: casually, unconcernedly, without strong connections to anything but the provider state and its flag.

This is not the world that conservatives or progressives, or for that matter libertarians, wanted to make, but all deserve a share of the blame. The welfare state has deprived millions of Americans of the will, as well as the ability, to manage their own lives. Indiscriminate application of a free-market ethos to other spheres of life has reduced attachments to whims, atomizing society. And for all their hand-wringing about culture, conservatives have not applied themselves to creating art or literature, but have spent their energies glorifying militarism and shivering in fear of leftist and Islamofascist phantoms. They locate the ills of society not in the state or the oligopolized market, but in bad people—Commies, terrorists, McGovernites [and envirofascists! ed.] —who can be bombed, jailed, or tortured away.

A different kind of economy, politics, and society can be imagined, one characterized by smaller government, more widely dispersed property, and an interesting local life not defined by big bangs delivered from a glowing screen. Progressives like Christopher Lasch have tried to describe such an alternative. So have left-libertarians like Karl Hess—they are Left not because they are “libertines,” as the canard goes, but because they look critically at concentrations of power. And so, too, have traditional conservatives—and now Red Tories like Phillip Blond. …

In practical politics, too, American conservatives have often made a point of promising to tame the market and create what George H.W. Bush called a “kinder, gentler America.” Yet the results have been disappointing. Richard Nixon entertained the idea of creating a negative income tax to benefit the poor—but his escalation of the war in Vietnam (and Laos and Cambodia) and the Watergate scandal put the lie to the myth of Nixon’s bleeding heart. George W. Bush’s “compassionate conservatism” and vows to foster an “ownership society” may have sounded distant echoes of G.K. Chesterton’s distributism. Yet Bush, too, is remembered for other things—like Enron, Abu Ghraib, Lehman Brothers, and “Mission Accomplished.”

Conservatives of many stripes have recognized that there is something deficient in the American tradition. Yet attempts to supply the missing element have not only failed, they have served to provide rhetorical cover for further consolidation of wealth and power in Washington and Wall Street. …

McCarthy’s appeal is echoed in Tom Friedman’s recent essay calling for greater personal and civic responsibility (and “more and better” regulations, too, of course).

In the U.S., however, the greatest escalations of police powers have taken place under Republican presidents elected in the name of “values voters” or the “silent majority.” Anti-liberal leaders like Nixon and the second Bush have only made matters worse—the culture coarsens all the more while the demands of national security displace those of hearth and home.

As actual morality disintegrates, politics becomes deeply moralistic. This is not a paradox: it is always easier for the virtucrat to demand that government reform society than for him to reform himself or his own neighborhood. Conservatives no less than liberals have indulged in morality by proxy, according to which the measure of a man is not how he behaves but how he votes and what ideology he professes. Control of government has become a substitute for leading a good life …

America does not just suffer from the absence of similar institutions to give authoritative voice to counter-values. We have national institutions, but not of the traditional, pre-liberal kind. Ours are the White House, the Pentagon, and the Federal Reserve. Everything else is the domain of wealth and private interest—including Congress and our churches. …

Here is McCarthy’s challenge, which to me speaks directly to the mission of The Ludwig von Mises Institute and other Austrian institutions of excellence:

There is no way around that: without formal institutions of authority, informal hierarchies rooted in excellence of character will have to do. George Washington, after all, had a higher place in the hearts of his countrymen than George III did in those of his subjects. Today the place for such ethical leadership is not in the White House, but in legislatures and the splintered institutions of civil society—perhaps most of all in the nonprofit sector of think tanks and universities, the closest things we have to what Samuel Taylor Coleridge described as the clerisy. Our universities have fallen far short of their missions, but institutions such as the Tocqueville Forum, which hosted Phillip Blond at Georgetown, may yet provide seeds of regeneration.

Further to my preceding BP posts regarding the gaps between (i) Austrian insistence that we focus on individual rights and plan formation and (ii) the penchant of some (many!) libertarians to support corporations while bashing citizens groups which are unhappy with the impacts of corporate actions on others, I stumbled across the above-captioned essay by Bruce Dixon, Editor of The Black Commentator (May 12, 2010, AlterNet).

I here are some liberal quotes (no pun intended; emphasis added):

If BP were a person it would be a career criminal, a pathological liar and an international serial killer with a rap sheet several times the size of the Chicago Yellow Pages.

Apart from Mr. Dixon’s questions, it seems to me one must ask – does it make any difference, either to the broader statist environment that we find ourselves, or to the behavior of BP, that BP is a corporation that is granted unlimited life and whose shareholders are excluded from any personal liability for corporate acts? I think that it undeniably matters, and quite deeply.

Just as libertarian and other commentators have suggested that we need to insist that firms that engage in the banking business be partnerships with unlimited liability in order to control the moral hazard engendered by the current system, so too should libertarians insist on restoring personal responsibility and ending corporate limited liability. If we do so, we will certainly see much greater efforts by those who own and/or manage business enterprises to control risks and behave responsibly – which will take pressure off of spiralling calls for corrupt and inept governments to “do something”!

I thought I would bring to readers’ attention this concession/semi-confession by James K. Galbraith in testimony to the US Senate Judiciary Committee earlier this month.

Galbraith’s testimony is interesting and useful, but nevertheless shallow – he completely misses the role of government regulkation and money manipulation in fostering moral hazard run rampant, or the insights of Austrians, who generally had a great idea of the problems – for decades 

Galbraith focusses solely on financial fraud, and ignores the deeper failures of Keynesianism. His litany of failures is sobering, but he provides zero insights into why those failures occurred – other than the greed understandably manifested when those who govern are busy playing with OPM – Other People’s Money. Still, I can’t argue with his closing(emphasis added):

Some appear to believe that “confidence in the banks” can be rebuilt by a new round of good economic news, by rising stock prices, by the reassurances of high officials – and by not looking too closely at the underlying evidence of fraud, abuse, deception and deceit. As you pursue your investigations, you will undermine, and I believe you may destroy, that illusion.

But you have to act. The true alternative is a failure extending over time from the economic to the political system. Just as too few predicted the financial crisis, it may be that too few are today speaking frankly about where a failure to deal with the aftermath may lead.

In this situation, let me suggest, the country faces an existential threat. Either the legal system must do its work. Or the market system cannot be restored. There must be a thorough, transparent, effective, radical cleaning of the financial sector and also of those public officials who failed the public trust. The financiers must be made to feel, in their bones, the power of the law. And the public, which lives by the law, must see very clearly and unambiguously that this is the case. Thank you.

Readers might also enjoy this interview/debate Galbraith did on the Scott Horton Show/Anti-War Radio with Robert Higgs, Senior Fellow in Political Economy at the Independent Institute.

Galbraith is Professor of Economics at The University of Texas at Austin, and is author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too.

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.”

and

“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.

As a follow-up to Lew Rockwell‘s Feel Sorry for BP? and my two sets of comments on it (Risk-shifting, BP and those nasty enviros, and Poor statists! If we close our eyes tightly enough, we can see clearly that Corporations are innocent VICTIMS, of governments that foist on them meaningless grants like limited liability & IP, and of malevolent, grasping citizens), I note and highly recommend Sheldon Richman’s May 14 commentaｒｙ, “Self-Regulation in the Corporate State: The BP Spill; Which system failed”, at TheFreemanOnline.org.

Here a portion of Sheldon’s commentary (emphasis added):

Yet, the New York Times reported, “Despite … repeated promises to reform, BP continues to lag other oil companies when it comes to safety, according to federal officials and industry analysts.” The Times said BP chief executive Tony Hayward “conceded that the company had problems when he took over three years ago. But he said he had instituted broad changes to improve safety….”

Why did BP have problems? The Times goes on: “Some analysts say the safety problems indicate that BP has not yet reined in the culture of risk that prevailed under Mr. Hayward’s predecessor, John Browne…. Mr. Browne set aggressive profit goals, and BP managers drastically cut costs to meet their quarterly targets. After the 2005 explosion in Texas City [killing 15 workers], investigators found that routine maintenance that might have averted the accident had been delayed because of pressure to reduce expenses.”

What we seem to have is a company that, in pursuit of short-term profits, was less than meticulous about safety (other people and their property, that is) while it and its industry effectively vetoed government safeguards that might have prevented the explosion that killed 11 workers and caused the damaging spill.

Some will defend BP in the name of the “free market” or minimize the event, protesting that the Obama administration’s remedial measures will “undermine our capitalist system.” Meanwhile, the “progressive” statists will declare that once again the free market has failed. The respective bases will be rallied.

Corporatist System

But BP’s defenders and statist critics both have it wrong. This is not the story of a well-meaning or negligent firm operating in the free market. Negligent or not, BP is a player in a corporatist system that for generations has featured a close relationship between government and major business firms. (It wouldn’t have surprised Adam Smith.) Prominent companies have always been influential at all levels of government — and no industry more so than oil, which has long been a top concern of the national policy elite, most particularly the foreign-policy establishment. When state governments failed in the 1920s to put a lid on unruly competition and low prices, the oil companies turned to Franklin Roosevelt and the federal government, winning the cartelizing Petroleum Code, significant parts of which were revived after the National Recovery Administration was declared unconstitutional. In the 1950s, when cheap imports depressed prices, the national government imposed quotas on Middle Eastern oil. (In 1960 OPEC, a “cartel to confront a cartel,” was founded.) Republican or Democratic, energy policy is not made without oil industry input.

In this context there’s less to the contrast between government regulation and corporate self-regulation than meets the eye. Self-regulation in a corporate state does not constitute the free market. When companies are sheltered in any substantial way from the competitive market’s disciplinary forces, incentives turn perverse. Moreover, “state capitalism” and the corporate form (pdf) – with its agency problem – can produce the temptation to cut costs imprudently in order to make the next quarterly report look attractive to shareholders.

“Putting profits before people” is a feature of state, or crony, capitalism not the free market.

I accepted the invitation of an empty comment thread to post a few comments, which I copy below:

Comment by TokyoTom on 14 May 2010:

Sheldon, great post.

I also posted a few thoughts in response to Lew Rockwell’s sympathy for BP and in reply to a response by Stephan Kinsella:

Risk-shifting, BP and those nasty enviros – TT’s Lost in Tokyo http://bit.ly/alFkim

Poor statists! If we close our eyes tightly enough, we can see clearly that Corporations are innocent VICTIMS, of governments that foist on them meaningless grants like limited liability & IP, and of malevolent, grasping citizens http://bit.ly/dc3RD9

I agree with what you wrote, but would note the following as well:

– government’s “ownership” of the seas & seabed leave a continuing tragedy of the commons in its wake, as resource users have no rights to manage, invest in sustainability, or exclude, sue or negotiate with other users whose interests or use conflicts. Thus, fishermen, shrimpers, oystermen and the like were not in a position to negotiate in advance with BP on precautions, and are poorly situated to seek damages.

– you touched on the ridiculous and counterproductive limitation of liability the the US government gifted to BP, but fail to directly note or criticize the much deeper and pervasive problems that stem from state governments’ grant of corporate status, particularly “limited liability”.

From limited liability and corporate status flow a steady transfer of risks from enterprises to the public as a whole: the corporate form enables the growth of large enterprises poorly managed by shareholders (who are dis-incentivized by “veil-piercing” judicial doctrines from trying to closely manage, and generally have little practical ability to oversee anyway), the growth of risk-taking by managers (who, like shareholders, can capture the upside of risky ventures but have little or no personal liability when injury is caused to innocent third parties), growing power and ability to influence judges, politicians and media – and so greatly eroding strict common-law protection of property rights from pollution, and resulting threats to health and safety that spur government action and thus the cycle of struggle for control over government, in which insiders always have the upper hand.

But beside these points, I note that simply explaining that what led to the spill and our general state of affairs was not “free market” capitalism isn’t particularly helpful in giving people direction on how to improve our situation.

Should we:

– insist on ending legislative grants of limited liability, both for ocean oil & gas drilling and for corporations generally? should we insist that drilling only be conducted by partnerships that have no limited liability (but can buy insurance)?

– are there tools of moral suasion that we ought to apply? should we be insisting on naming the names and demanding personal responsibility by managers involved?

Not merely your diagnosis, but your thoughts on practical courses of treatment would be helpful.

Comment by TokyoTom on 14 May 2010:

Sheldon, great post.

I also posted a few thoughts in response to Lew Rockwell’s sympathy for BP and in reply to a response by Stephan Kinsella:

Risk-shifting, BP and those nasty enviros – TT’s Lost in Tokyo http://bit.ly/alFkim

Poor statists! If we close our eyes tightly enough, we can see clearly that Corporations are innocent VICTIMS, of governments that foist on them meaningless grants like limited liability & IP, and of malevolent, grasping citizens http://bit.ly/dc3RD9

I agree with what you wrote, but would note the following as well:

– government’s “ownership” of the seas & seabed leave a continuing tragedy of the commons in its wake, as resource users have no rights to manage, invest in sustainability, or exclude, sue or negotiate with other users whose interests or use conflicts. Thus, fishermen, shrimpers, oystermen and the like were not in a position to negotiate in advance with BP on precautions, and are poorly situated to seek damages.

– you touched on the ridiculous and counterproductive limitation of liability the the US government gifted to BP, but fail to directly note or criticize the much deeper and pervasive problems that stem from state governments’ grant of corporate status, particularly “limited liability”.

From limited liability and corporate status flow a steady transfer of risks from enterprises to the public as a whole: the corporate form enables the growth of large enterprises poorly managed by shareholders (who are dis-incentivized by “veil-piercing” judicial doctrines from trying to closely manage, and generally have little practical ability to oversee anyway), the growth of risk-taking by managers (who, like shareholders, can capture the upside of risky ventures but have little or no personal liability when injury is caused to innocent third parties), growing power and ability to influence judges, politicians and media – and so greatly eroding strict common-law protection of property rights from pollution, and resulting threats to health and safety that spur government action and thus the cycle of struggle for control over government, in which insiders always have the upper hand.

But beside these points, I note that simply explaining that what led to the spill and our general state of affairs was not “free market” capitalism isn’t particularly helpful in giving people direction on how to improve our situation.

Should we:

– insist on ending legislative grants of limited liability, both for ocean oil & gas drilling and for corporations generally? should we insist that drilling only be conducted by partnerships that have no limited liability (but can buy insurance)?

– are there tools of moral suasion that we ought to apply? should we be insisting on naming the names and demanding personal responsibility by managers involved?

Not merely your diagnosis, but your thoughts on practical courses of treatment would be helpful.

[Update: added a link  to Roger Pielke, Jr. at the end.]

My pal Stephan Kinsella has pestered me about the recent letter in Science by a bunch of the world’s leading scientists, so I suppose I ought to mention it.  (I won’t make another “Climate Confession”, but some of my earlier remarks about the Great Climate Email Kerfluffle may be worth repeating, particularly as various investigations concluded that no scientific dishonesty occurred)

Those who have more than a passing interest in science, the role of science in policy and in climate-related rent-seeking ought to read the letter, signed by 255 members of the the National Academy of Science, including 11 Nobel Prize winners (in hard sciences); I won’t post any extensive quotes here.  I simply note this conclusion:

“Compelling, comprehensive, and consistent objective evidence that humans are changing the climate in ways that threaten our societies and the ecosystems on which we depend.”

The letter is a reaction, chiefly by scientists not active in the IPCC process, to recent harsh attacks on their “climate science” colleagues (including threats of legal action by Sen. Inhofe and initiation of legal action by the Virginia Attorney General), and an effort to support such scientists by expressing a strong concerns about the possible consequences of continued inaction. The letter urges policy action and blames much of the attacks on efforts by rent-seeking fossil fuel interests to protect their advantaged position. The letter itself – as well as the fact Science put it behind a paywall along with a Photo-shopped photo of a polar bear on an ice floe! – showcases the political naivete and amateurishness of the scientific establishment.

Obviously scientists have no particular expertise in making public policy, but it IS striking that so many of them are willing to venture out onto thin ice by raising their voices in alarm.

Readers may find the following background/commentary on the letter to be useful:

1. I repeat some of remarks I made when the email scandal arose (altered somewhat):

• The Climate Hack is certainly egg on the face of some climate scientists – although this has been spun ridiculously out of context (much criticism is clearly simply wrong, though those who find the whole thing “delicious” have a tough time looking past the sources they prefer to read) – but the implication that the science is nothing but a conspiracy is an obvious fantasy. The political amateurishness of the scientists alone tells us that. (If any readers honestly need help in finding their way through the fog – self-deluded or deliberate – of the “skeptics” here, please let me know.)

• Austrians/libertarians already knew that much of the climate science is politicized, especially here, not simply because of public funding, but chiefly because all parties – fossil fuel investors seeking to protect a generous status quo, enviros, politicians & bureaucrats, and those seeking greater advantage or more investment climate certainty – are seeking to steer government in particular directions, in ways that may significantly affect all of us. A further factor in such politicization is the simple difficulty that laymen (and scientists) have in wrapping their own heads around the climate science, and for which personal confirmation may take a lifetime. Personal and tribal predilections to hate “environazis”and the like, on the one hand, or to disdain evil capitalists, on the other, has nearly everyone looking reflexively for whatever scrap of science confirms their existing views and/or suits their political preferences.

• The discord among scientists and attempts at gate-keeping are part and parcel of science – publicly-funded or not – but because of the political importance of climate science, we need greater, not less, transparency. The apparent efforts at gate-keeping (seeking to influence what gets published in peer-reviewed journals and what appears in IPCC reports) is what seems most objectionable, but there has been plenty of disagreement and change in views even in the dominant view; the science is and will always remain unsettled. All dissenters have found ways to make their views known, most of which have been examined and found wanting, and few dissenters have mutually coherent views.What has happened is that scientists who are extremely concerned about climate change have felt that political action is needed, and that dissenting views are dangerous distractions, and have made efforts to limit “distractions”. Such a belief appears to have been well-founded, but acting on it in this way a strategic mistake. Greater openness is required for publicly-funded research, particularly here where there is a strong, established and resistant rent-seeking class that seeks to minimize the science and to distract public discussion. While the efforts of climate scientists to provide data to and to address the arguments of “skeptics” would necessarily entail a distracting amount of attention, it is apparent that they simply need to grin and bear it.

• Much – though not all – of the “skepticism” is clearly revealed as an extended, deliberate campaign by fossil fuel interests, dressed up in part by scientists who are non-experts in the field they criticize, with support by “conservatives” and “libertarians” who prefer a massive unmanaged meddling with global ecosystems (and defense of a government-entangled, pro-fossil fuel firms status quo) over a likely expansion of government.

2.  Andrew Revkin’s NYT Dot Earth blog piece and an article at the Guardian both provide useful explanation of background and links.

3.  The related editorial by Brooks Hanson (deputy editor for physical sciences) and has some insightful remarks on the perceived urgency of the problem and how scientists can better interact with the public and policy makers.

4.  Nature, the highly respected British scientific journal, had an interesting (but misguided, I believe) editorial in March that appears to have influenced this letter; here is an excerpt:

Climate scientists are on the defensive, knocked off balance by a re-energized community of global-warming deniers who, by dominating the media agenda, are sowing doubts about the fundamental science. Most researchers find themselves completely out of their league in this kind of battle because it’s only superficially about the science. The real goal is to stoke the angry fires of talk radio, cable news, the blogosphere and the like, all of which feed off of contrarian story lines and seldom make the time to assess facts and weigh evidence. Civility, honesty, fact and perspective are irrelevant.

5.  While scientists have concerns and policy preferences, clearly they are not politically powerful, even as opposition to climate change policy is very solidly grounded in efforts by sophisticated fossil fuel interests to protect investment returns. Here is a brief introduction to the mis-information campaign.

6. The Royal Society of New Zealand has recently posted a statement regarding man’s impact on climate and ecosytems that is also worth review.

7. Roger Pielke, Jr. has some interesting comments; chiefly, he seems to castigate scientists for their poor PR skills – an approach consistent with his penchant for ongoing criticism of scientists (to the approval of “skeptics”), but hasn’t led any scientists to sign Roger up to be their PR coach.