Today is Earth Day, and NPR and the rest of the media are celebrating government and its environmental laws such as the Endangered Species Act and green energy transformations. Joe Biden will be delivering celebratory remarks.
Earth Day. Environmental protection template for banner, card, poster, background.
The presumptions remain that free market capitalism tends to pollute and destroy, that sustainable development is something other than what markets can do of their own accord, and that markets are anti-environment.
Instead, most areas around the globe where environmental destruction is rampant are those where property rights are absent or confused, and a "tragedy of the commons" prevails: airsheds, watersheds, public lands, endangered species and their governance all come to mind. Endangered species laws, for example, can set landowners and species at odds by forbidding activities on the property in question in counterproductive ways. It could be otherwise, with landowners incentivized to protect and save species rather than “shoot, shovel and shut-up.”
In reality, the technologies spawned by free enterprise are likely to be contributors to a cleaner environment and ever-cleaner Earth Days. Increased wealth has always been essential to advancing environmental health, sanitation, reduced waste, cleaner transportation—and to doing more with less. Even dense cities can be greener than their reputation.
Any framework rejecting property rights-based markets them is not something that can truly call itself environmentalism. One can't pollute what's owned without having to compensate those injured. The environmental threat will more likely be, not capitalism, but its absence; not market failure, but the failure to have markets.
Our late colleague Robert J. Smith, who headed the Competitive Enterprise Institute’s Center for Private Conservation and was CEI's 2011 Julian Simon Award winner, tirelessly stressed the role of private conservation in protecting resources and would often point to examples. The Shanandoah Valley's Luray Caverns, for example, have remained privately owned since discovery. North Carolina’s Grandfather Mountain is held by a private stewardship foundation, with the state owning surrounding acreage. Chimney Rock, also in North Carolina, was privately owned for a century before the state assumed control in 2007. Similarly, Natural Bridge in Virginia was privately owned—at one time by no less a personality than Thomas Jefferson—before becoming a state park in 2016.
A healthy environment is itself a form of wealth—that key pursuit or condition that capitalism is driven to maximize. Even in mundane industrial production processes, markets steer human intelligence into reducing waste streams to generate profit. If company A doesn't cut unnecessary waste from input-output processes, competitor B will be guided by market imperatives to do so.
A tribute by Greg Walcher this month in Grand Junction, Colorado’s Daily Sentinel noted takeaways from R. J. Smith’s work, ones relevant to Earth Day celebrations overly inclined to see state action as the solution to environmental degradation:
First, government’s insistence on command, control and punishment does not work well—fewer than 2% of endangered species have recovered and been de-listed, and vast swaths of national forests have died, fallen down and burned. Second, incentives are the key to conservation. Even Aldo Leopold, a great hero of the environmental movement, concluded that conservation only becomes possible on private lands—where the vast majority of wildlife habitat is found—when it also becomes profitable for landowners. In 1934 he wrote that “conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.”
Relatedly, Fred L. Smith Jr., founder of the Competitive Enterprise Institute (and not a direct relation to R.J.), noted in "The Progressive Era’s Derailment of Classical Liberal Evolution" that the exaltation of "planned order" has had the unfortunate effect of removing vast areas of endeavor, like the environment, from true discipline—from the wealth-enhancing "fencing" and protective capabilities of emergent voluntary enterprise. As Fred put it:
Classical liberals do not see the market as failing; rather, they see inadequate resources making it difficult for individuals to express their preferences. That tension creates the opportunity for institutional entrepreneurs to advance reforms that might better allow those preferences to be expressed. In the classical-liberal view, we are not charged with protecting the environment or anything else. There is no social utility function. Rather, individuals gain the right to own newly valued resources and to determine individually what sacrifices—what tradeoffs—they find worthwhile to protect those resources.
Current policy in the wake of laws like the Infrastructure Investment and Jobs Act and the Inflation Reduction Act—touted as climate laws by the Biden administration—pursues fads like purportedly green infrastructure (such as EV charging stations) fueled subsidy rather than market demand. Meanwhile those plug-in electric vehicles remain largely powered by fossil fuels, even as public backlash to them mounts.
The true challenge of Earth Day is to bring environmental amenities and stewardship into capitalism’s wealth-enhancing ambit rather than default to the top-down approaches of locking up resources or relegating them to the status of regulated public goods. For those interested, along with the work of the two Smiths, a fun read featuring the clash between the private conservation vs. commons/planned approach and not picking sides is John McPhee's Encounters with the Archdruid.
The importance of harnessing property rights, private conservation and markets ought not be ignored on Earth Day. These are all necessary to the protection of vulnerable species, the oceans, fragile coral reefs, precious giants like the elephants and so much more. Environmental wealth is as important as any other kind, and requires the same rule of law institutions to flourish and grow.
