Free markets versus pollution?

Here is a list of the 30 most polluted cities on Earth. Per country, here’s where those cities are located:

India: 14
China: 6
Saudi Arabia: 3
Pakistan: 2
Iran: 2
Bangladesh: 1
Cameroon: 1
Uganda: 1

All of them are clustered in the bottom half of rankings for economic freedom.

Which reminds me of my strong environmentalist colleagues — who tell me vehemently and often how bad free-market capitalism is for the environment.

So I think of cities in the most economically-free nations: Hong Kong, Singapore, Auckland, Sydney, Geneva, Zurich, Tallinn, Vancouver, and Toronto, for example.

Free markets correlate with clean, and the lack of free markets correlates with dirty.

(But, one might ask, what about the environmental disasters at Love Canal and Bhopal?)

10 thoughts on “Free markets versus pollution?

  • March 6, 2017 at 11:24 am
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    Simple logic would demonstrate that free economies would lead to relatively clean countries. Pollution is, by definition, waste–energy or material that cannot be sold. In a free market, there is incentive to find a way to sell this material and re-capture that energy. Your factory is there to make some product, and selling that product provides enough margin to keep the doors open, so any waste product you can sell is pure profit. Anyone who can increase profits by 10% with only a negligible increase in overhead is going to be VERY popular with the executives and board of directors! On the supply side of the equation, oil spills represent millions of dollars of lost product. Oil companies have profit margins in the single digits–finding a way to prevent spills would be a major economic gain for them!

    This isn’t speculation. I’ve been in remediation for nearly ten years now, and the best systems for preventing spills/releases I’ve seen have involved finding a way to sell products that would otherwise be discarded.

    A planned economy, in contrast, is the Tragedy of the Commons on a national scale.

  • March 6, 2017 at 6:29 pm
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    You’re either being deceptive or disingenuous by looking at these places in isolation. Nary a one of these sites exists in a vacuum! Rather, each and every one exists in the broader context of a global economy which allows rich countries to export their “externalities” (i.e. pollution) and locate dirty industries/industrial processes in poorer countries.

  • March 6, 2017 at 8:06 pm
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    Nice try, Harbeer, at updating Lenin’s imperialist-export thesis. So wicked of those Canadians to be sending their trash to Pakistan.

  • March 7, 2017 at 8:04 am
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    That’s hardly a proper way to look at it, Harbeer.

    What Harbeer is saying is that environmentally unfriendly industries are often outsourced to areas like China, India, and the like. Take, for example, solar panel production. Traditional methods produce fairly nasty byproducts, and much of the production of these was (as of five years ago, the last time I was involved in a solar power project) performed in China.

    Harbeer is ignoring several factors, though. A huge part of the reason these processes are outsourced is that the regulatory environment in the USA, Canada, Europe, etc. make these processes extremely difficult to perform locally. Environmental regulations pretty much force us to “export our externalities”. This is an example of the “damned if you do/damned if you don’t” nature of Environmentalism: no matter what we do, Environmentalists will find a reason why it’s horrible and immoral. That’s because their standard is “nature”, which they define as anything non-human.

    It’s also worth pointing out that these countries are also allowed, by the international community, to forego participation in industry-choking environmental regulations like the Kyoto Protocol, ostensibly because they need fossil fuels to develop (which is itself based on the moronic idea that technology is a linear progression and each stage must necessarily be taken in sequence). Check out where deforestation is occurring (capitalists realize that planting trees today gives you trees to cut down tomorrow), or where populations are rising (capitalism gives us medicine and infant mortality rates below 50%), or where fossil fuel use is being increased (not necessarily a bad thing–it just shows the dishonestly of the Environmentalist position). None of that has anything to do with “exporting externalities”.

    Finally, Harbeer’s point is NOT TRUE. Again, I have been doing environmental remediation for nearly a decade. I’ve cleaned up everything from BTEX to methyl ethyl death (as it’s known in the trade). I once worked on a site so contaminated that when I dropped my cell phone in a bucket of purge water the water ate the wires and replaced them with plastic. I’ve been on countless factories, energy plants, landfills, roads, railways, and any other structure that can produce, house, process, or dispose of hazardous material–all within the USA. While the USA has become much better at not producing hazardous materials (we no longer flush machinery with trichloroethene and we no longer pour PCB into streams), we still deal with hazardous material locally. We just don’t like to kill our workers or violate property rights, so we take care to make sure it doesn’t get released.

    Harbeer’s view is typical of what I saw in college, and is typically in my experience the result of someone who’s swallowed the Environmentalist dogma without ground trothing it. When you actually get into the field, you find that the idea that we “export our externalities” is simply laughable. It’s quite telling that no one who’s been in the remediation business for five years even speaks in such terms–those who do are quickly disillusioned and leave, and those who stay learn that reality isn’t even close to what the Environmentalists want you to believe.

  • March 8, 2017 at 8:59 am
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    James,

    But your own answer sort of supports Habreer’s point. You mention that the pollution isn’t here because of regulations. Most regulations are put in place to try and prevent harms from totally free markets, other wise people ignore dangers that are not immediately evident. Yes, we can see the immediate effect of an oil spill, but air and water pollution may not cause cancer until 20-30 years down the road. In the meantime unfettered free markets don’t worry about it or take steps to address it.

    Rather than considering free markets the solution to pollution, I would consider healthy democratic representation the solution. When the people can insist that their government address pollution, not on the basis of profit but out of concern for its citizens, then regulations are put in place and there is less pollution. Also, several of the countries on that map are socialist countries–Hello Scandinavia–though I’m not sure how much they produce–or have at least some socialist leanings in other areas such as health care.

    Maybe universal health care + mostly free markets in other areas is the right combo.

  • March 8, 2017 at 3:33 pm
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    To an extent, you are correct–a few pollution-heavy industries don’t operate here (not as many as people believe), because the regulatory environment is such that it’s easier to outsource those processes than deal with the regulations in the USA. However, to assume that this is “outsourcing our externalities” is to engage in the Broken Window Fallacy. We simply don’t know what advancements would be made if those processes were located in the USA–either in terms of the processes themselves, or in terms of dealing with the waste byproducts thereof. The government has distorted the market to the point where it’s impossible to meaningfully discuss what would happen without that distortion.

    The regulations do not keep the waste out of our streams, groundwater, air, or soil–if they did, I’d be out of work. What the regulations do is keep the JOBS outside of the USA. And, given where the jobs do go, it eliminates the potential for meaningful advancement in any of the processes associated with those industries.

    As for your solution to pollution, I’ve worked with the EPA. I can assure you, such a solution would inevitably lead to a bureaucratic miasma of conflicting laws, and government control over all aspects of our lives. Your car produces air pollution, after all–they could reasonably demand you follow (and keep records of) government-mandated maintenance protocols, “out of concern for [the] citizens”. Every industry–bar none–would be subject to similar regulatory creep. Farming is a major source of pollution (non-point-source, air, water, etc); you are proposing handing our FOOD SUPPLY to the government–and to agencies who would consider themselves morally obliged to ignore the economic (read, humanitarian) impacts of their decisions.

    The reality is that bureaucrats are power-hungry, and do what’s best for them, in terms of securing and expanding their personal power. They do not have your best interests at heart–or, perhaps less cynically, they don’t necessarily have your best interests at heart. Many of them are simply tyrants. And that part of the equation is never discussed in these conversations. There are risks associated with handing government employees such power, particularly when the people involved would be largely unaccountable (they are not elected, and are not responsible for the consequences of their decisions for the most part). Those risks need to be seriously evaluated, not simply ignored. One does not become a saint merely by being hired by the EPA or state environmental agency, any more than one becomes a villain simply by being hired by a private enterprise (corporation).

    Pollution is a property rights issue. If my haz mat crosses into your property (or the known effects of it do, in some cases), you have grounds for suing me for damages, including the price of cleaning it up. If there is a reasonable immanent danger of it crossing the property line, again, you have grounds for pressing charges. If my haz mat doesn’t cross your property line, it’s none of your business–I can kill myself however I wish. If that principle were applied rigorously the EPA would not need to exist in its current form.

    The nonsense about health care demonstrates is telling, but not relevant. Its inclusion would be irrelevant, if your point was to discuss dealing with pollution (as an aside, has anyone else noticed that I’m the only one to name a single contaminant in this discussion?). But I don’t think that was your point.

  • March 9, 2017 at 12:42 pm
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    As far as advancements go, eventually someone will have to come up with them. You can argue that free markets haven’t been allowed to address the issue, but people will only invest in solutions when they have to. Why would they have to? Laws/Regulations. Why would someone sink millions into that sort of technology if factories can just ignore them and continue to pollute with no consequences?

    Additionally, pollution generally doesn’t limit itself to property boundaries, especially when we are talking about air or water pollution. It’s hard to make sure pollution doesn’t leak into ground water or aquifers. Containment methods can leak or break. Air pollution gets absorbed into the larger atmosphere and is driven down the block, etc. So, the question is “Who owns the air and water?” Who can we sue when a factory pollutes? If the courts are the way to get remediation, don’t they require regulations as a basis to do so? How else can you sue an entity unless there is some definitive rule that they are breaking? How can you assign legal responsibility without any laws?

    Also…Let’s say you have some nasty haz mat issues on your property. You die. The property is so polluted that no one wants it or can afford to remediate it. It sits for years with no takers. Ultimately, who will have to deal with and clean up the property? The local government. It’s really difficult to make the argument that pollution is a single property owner’s issue.

    You’ll get no arguments from me about bureaucrats and politicians and their power-hungry ways. However, only in robust democracies is there any hope of getting rid of them or forcing them to act in ways the citizens want. The weaker the democracy, the harder it is to enact any meaningful change. How long do you think it will be before communist China deals with its pollution issues? Does the Party care about its citizens’ concerns? Is there any consequence to ignoring them? Not in the foreseeable future.

    My comments about healthcare have more to do with countries seeing their citizens’ health care as more of a right than a privilege. A country predisposed to believing its people should have access to universal health care might also theoretically be predisposed to protecting their citizens’ health from pollution. I don’t think it’s that great of a stretch.

  • March 9, 2017 at 1:43 pm
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    “As far as advancements go, eventually someone will have to come up with them.”

    False. See Damascus steel. For that matter, see the Greeks. They had steam power, for at least a generation or two (more likely a few centuries, but I don’t know the dates well enough to say for certain). They did not experience any sort of industrial revolution. Progress is not inevitable.

    “Why would someone sink millions into that sort of technology if factories can just ignore them and continue to pollute with no consequences?”

    I have already answered that: pollution inherently represents lost revenue. This is not theoretical; where do you think we get drywall from?

    “Additionally, pollution generally doesn’t limit itself to property boundaries, especially when we are talking about air or water pollution.”

    Agreed. Which is why rigorous application of property rights can handle the vast majority of pollution issues. If pollution DID limit itself to property boundaries, application of property rights would be irrelevant to this issue.

    “Who can we sue when a factory pollutes?”

    This question alone demonstrates that you have no idea what you’re talking about. I can think of three lawsuits off the top of my head against companies my company works with which answer exactly that question. The principle? Property rights. You have no right to spread known toxins onto other people’s property, regardless of the mechanism by which you spread them (good-faith efforts are a separate issue).

    What you intended to discuss is non-point source pollution. Which is problematic, but not impossible to address. I know of one instance where no one can determine who polluted the groundwater, so a number of industrial concerns joined together to investigate and clean up the pollution. All of them share some of the guilt, but none share all of it (and many who share guilt no longer exist–this has been going on for a few generations). They decided that instead of wasting time arguing, they’d just clean it up and be done with it. Non-point source pollution can be–and is, right now, in the real world–addressed in a similar manner. Note that there were no threats of lawsuits here; they would be pointless, as, again, many guilty parties no longer exist (the corporations disbanded fifty years before the stuff was recognized as a toxin). This was just a group of companies saying “This is bad. We did some of this. We will fix it.”

    “Ultimately, who will have to deal with and clean up the property?”

    Again, this demonstrates you have no idea what you’re talking about. This happens ALL THE TIME. The answer is that there is always an heir. Property never–NEVER–sits ownerless, at least not on main lands (islands in the middle of nowhere are a separate issue, and a fully sufficient answer is often “Who cares?”). So someone has a responsibility for dealing with it. They don’t want to? Sucks to be them. They can sell it to someone willing to deal with it, or they can give it away, or they can draft a deed/rental agreement/easement that makes it someone else’s problem–there are a few options–but they either have to accept responsibility, pass on responsibility along with some control of the property, or delegate the responsibility. No other options are available. Property rights–and specifically inheritance, an application thereof–are how these questions get answered. Note the tense here: this isn’t a hypothetical, it’s how things happen today in the USA. So we know it works.

    “However, only in robust democracies is there any hope of getting rid of them or forcing them to act in ways the citizens want.”

    One thing I enjoy about living in 2017 is that arguments of this nature–those in favor of unfettered democracy–can so easily be demonstrated to be nonsense: Trump was elected.

    The issue isn’t how the government should give the people what they want. Democracy inevitably fails and becomes dictatorship. The issue is how to protect people’s rights. This is in direct opposition to what many people want–they want wealth re-distribution, as long as it’s from someone else to them. They want power over others. And the problem is, even if I agree that you should have sufficient power to enact the policies I want, eventually our side will lose an election. At that point, our opposition will have free use of all that power. Eventually, a Trump will be elected. Only by limiting power for everyone do we limit the damage that happens when our opposition gets into power.

    “My comments about healthcare have more to do with countries seeing their citizens’ health care as more of a right than a privilege.”

    Your comments are irrelevant to a discussion of pollution. They are virtue signaling, pure and simple–an attempt, in essence, at an ad hom attack against me, someone who’s NOT engaging in such signaling.

  • March 9, 2017 at 2:20 pm
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    I apparently know nothing. You apparently know everything…even though you seem to not know what the term “ad hominem” means. I have in no way attacked you. I assumed this was merely a conversation. Ironically, you’re the one who could be accused of employing an ad hominem tone. It’s interesting that my having a different opinion than you is “virtue signaling.” To whom exactly? A stranger on the internet? The millions of readers this site has (no offense meant to the owner). You will probably say that I am virtue signaling to myself. Feel free to make that argument. I am not particularly tied to my position. I simply thought there might be more alternative explanations than “MARXISM IS OUT TO DESTROY US ALL!” (Now, we can talk about ad hominem or straw men).

    Now that that is out of the way: Heirs can refuse inheritances and not everyone has heirs. This is usually handled on a state by state basis. There is no one set of inheritance laws. I don’t think that a cousin twice removed who never even knew the property owner can be forced to accept the property and be forced to clean it up. However, I am not a lawyer and I am open to being shown the error of my point of view. Now, if someone chooses to accept an inheritance, then they will clearly be responsible.

    My point about advancements was not about the inevitability of progress. It was to make the point that, when things get bad enough we are forced to address issues. Who knows when or where. If we don’t, then very bad things happen.

    As far as the inevitability of the failure of democracy goes–The jury is still out. 200-300 years is too small a period of time to make such grand declarations.

    Ditto for Trump–the story is still unfolding. We will see what happens. I despise Trump, but I am not going into hysterics. Bad things may happen, but I am optimistic that they won’t be permanent. I could be wrong and so could you.

    Back to the subject:

    What is the lost revenue of air pollution? Drywall took material and created something useful for it. How do you envision factories doing the same thing with air pollution?

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