Many people justify the free market economy -- no silky strings attached -- with the idea that sure, the market will punish the segment of the business community that degrades an environment. Eventually the externalities will be factored in by an educated society or not. Perhaps this educated populace has weighed the pros and cons of a profitable, yet unsustainable business and yet the company survives. That’s not the traditional I’ve heard, but it doesn’t sound too far fetched, right? I mean, coal companies have polluted the public atmosphere for a good century (+) and we haven’t seen the surge of decentralized, clean energy or energy boycotts and conservation programs that you’d expect to see if there was a consumer revolt. So we’ve weathered some terrible electricity sources in the past. But our light bulbs are looking somewhat brighter for the future.
But back to the traditional argument. From what I’ve heard, market advocates figure consumers will say, ‘shux, I don’t dig your profit motives, Company A. Company B, call me your patron.’ And so the market self-regulating wheel spins round hypothetically. Company A, just like the early horse--Hyracotherium-- which galloped across North America about 54 million years ago, will adapt. The day will come when Company A sees just how unprofitable it is to pollute. There is an amount that they can pollute in the interest of the economy. They’ll find that homeostasis. It’s not duping the consumer. It’s not putting profit over people. It’s merely a loyalty to stockholders, who have a stake in management.
Risk-benefit analysis and to a smaller degree Cost-benefit analysis (weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option) scare the bejesus out of me not because they blatantly fuel profitism, but rather that each devalues life. Sounds like a cliché argument. It is. The two theories literally compare (often a flawed estimate) money and something impressionable.
And so, getting back to reality and using both RBA and market solutions as evidence that this sort of callous conservatism fails communities seeking to safeguard their homes and workplaces. Company A consumes resources or shoots emissions into the atmosphere. The market punishes them. They lose money and everything is dandy, right? Except in this equation, AGAIN the company doesn’t factor in externalities. There’s nothing to stop this initial attack against the public and after all is rather done, it doesn’t pay for it’s own pollution.
That’s where a bill like the Superfund Act has come into play since the 1970s. Designed to limit corporate liability while still paying for damages, the public is stuck with the bill. The federal government covers the tab of two waste cleanup sites per state. In my state, this means that you and I ...
1)pay for metal waste deposits that built-up behind the Milltown dam decades after copper, silver and gold mining had stopped.
2)pay the EPA to cleanup Libby, Montana after a company packed asbestos into each home in the community.
Businesses dig this act of Congress. They have a swell little safety-net and the potential to use a whole system (humans, macro and micro invertebrates, etc.) much like airport emesis bags.
Luckily, there is a way to twist the free market logic into something more beneficial to society.
While reading The Monkey Wrench Gang, I devised my own little market solution -- a sort of market retaliation, but one that’s justified by such a vibrant belief in consumer response and choice. Property and production, being as important to artificial numbers like GDP as they are to individual citizens, are the targets of such a retaliation. So… what do you think?
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