Monday, June 25, 2012

I think we all know the answer to that....

Can Government Protect the Environment or Anything?

by Devin Leary-Hanebrink

In light of recent comments by NASA climatologist Dr. James Hansen – stating that climate change is a moral imperative on par with slavery – climate change is, once again, front and center. Immediately, environmental alarmists and reactionary extremists on both sides of the political spectrum started pointing fingers and raising voices.

While the climate debate certainly has merit and must be studied (scientifically, not politically, of course), climate change is not the crux of this overarching environmental issue. The real issue is can government actually provide the solution?

Answering this question requires only a brief look at government’s track record of fixing problems and protecting things.

A Broken History of Environmental Protection

It is astonishing how convinced people are that environmental salvation can only be reached through government intervention. As if government – equipped with the power of Sauran’s Eye – must be the environment’s final arbiter.

Bear in mind, this great planetary savior is the same force that destroyed hundreds of cities and towns while waging total war across half the globe during a decade of environmental destruction that culminated in the drop of not one, but two, nuclear devices on Japan. Further, only government was responsible for the devastation of millions of acres of present day Belarus, Russia, and the Ukraine when the Chernobyl Nuclear Power Plant in Prypiat, Ukraine failed. Subsequently, this same protector tried, in vain, to cover up the entire disaster.

Further, government has a history of introducing invasive plant and animal species to non-native environments, all in a calculated scientific effort to "fix" the environment. A great example is the U.S. federal government’s introduction of the Paper Bark into South Florida over 100 years ago in an attempt to drain the Everglades. Similarly, in the 1930s, the Australian government introduced the Cane Toad into Queensland because it would, in theory, protect the sugarcane fields from destructive insects. Today, authorities in both the U.S. and Australia spend millions of federal tax dollars to eradicate these new pests.

While government may have learned from past mistakes, a concentrated focus on the eradication of all non-native species would be extremely near-sighted. Keep in mind, horses, camels, cows, pigs, goats, sheep, cats, and dogs (just to name a few) are only native to small parts of the world. Complete eradication would devastate the global economy.

Protecting infinity and Beyond

Not to be outdone by a stellar environmental record, government wants to protect money, too. In 1913, the U.S. government established a monetary authority chartered with two main goals: 1) to maintain the purchasing power of the USD, and 2) to moderate the peaks and valleys of the business cycle. After 100 years, the Federal Reserve has done neither. In a few years, 1USD will be worth fractions of a cent when compared to its century old ancestor and the worst business cycles in U.S. history have all occurred under the Fed’s watch. Those financial panics of the pre-Depression era were nothing more than harmless day dreams when compared to the mess caused by the Federal Reserve.

Not content, Congressional meddlers, over the past century, have created a labyrinth of federal laws to further regulate financial institutions. Each law, more convoluted than the last, is promulgated to promote "safety" and "consumer fairness." While these motivations are well and good, the law of unintended consequences has been forgotten. To date, the costs associated with all financial activities – from simply borrowing money to complex corporate regulatory compliance – are increasing exponentially.

These interventionist measures neither protect the consumer nor strengthen the U.S. financial system, but do create systemic problems with rent seeking and moral hazard. It should come as no surprise that every sovereign state around the world has established authority to protect money. In reality, the only thing protected is government entrenchment.

Still not done, government has manufactured a war on poverty, a war on drugs, and a war on terror all under the guise of protecting the individual and the environment. All this, and yet, government fails to keep the streets safe and property secure. The state even fails to protect litigants in a court room or prisoners from each other.

Why place faith in an entity that is one part Mr. Magoo and two parts Officer Barbrady? Yet time and time again activists and voters turn to these omnipotent benefactors as the path to salvation.

Do Viable Market Alternatives Exist?

Privatization, when coupled with a system of governance that promotes and protects property rights, is the most effective way to protect the environment. Only respected property rights can minimize economic problems such as the tragedy of the commons and moral hazard.

One great example, the American Bison, once on the verge of extinction under government regulation, received a new lease on life due to privatization. Media magnate Ted Turner, instrumental in the Bison’s resurgence, owns the largest privately held Bison heard and uses these resources to support his restaurant chain Ted’s Montana Grill. Similarly, in some African countries the African Elephant is facing extinction, while in others, such as Zimbabwe, where privatization was legalized, minor overpopulation concerns exist. Further, while there is no shortage of cows, pigs, or chickens and there are always trees at Christmas, environmentally conscience individuals and private firms, even absent direct financial incentive, are more likely to protect the environment (including undesirable species) for pure altruistic gain than government is.

Finally, privatization supports governance instead of government. Private entities such as Brinks, Underwriters Laboratories, Consumer Reports, Goodwill, and World Land Trust are certainly capable of protecting people, property, and the environment. While private firms are far from perfect, these entities must respond to market demand by providing quality service at reasonable prices. Government, unresponsive to these forces, answers only to political pressure, which leads to the problems identified above.

Free market environmentalists or enviropreneurs are the environment’s best bet, not government

Markets Always Win

The perpetually growing state is synonymous with endlessly eroding freedom and, every year, government shovels more and more responsibility into its bloated craw. At the same time, it fails the most basic obligations. Fortunately, politicians and bureaucrats, convinced they know all the answers, are consistently proven wrong by the laws of economics. As F.A. Hayek eloquently states in The Fatal Conceit, "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." Or protect.


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