Monday, 13 March 2017

Markets mean a cleaner environment

 


I frequently hear the refrain from people who should know better that capitalism is bad for “the environment” – that markets cause pollution: and more markets, more pollution.

And yet as philosopher Stephen Hicks points out, when you look at the actual facts nothing could be further from the truth:

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

Compare those cities (as he does) with cities in the most economically-free nations (as measured by these rankings): Hong Kong, Singapore, Auckland, Sydney, Geneva, Zurich, Tallinn, Vancouver, and Toronto, for example.

So it seems that far from being the case that more freedom is bad for the environment, the correlation points very strongly the other way.

IEF-2017-800x445

This shouldn’t be a surprise.

After all, the very purpose of all that market activity is to improve the human environment – which means making the natural environment more hospitable not less. Which generally means cleaner.

And the very activity of producing for profit demands one do the most with the least: taking things of measurably lower value and transform them into things of objectively higher value. Every voluntary market action is thus an improvement.

When a country is freer and more prosperous, it can also afford to be cleaner – a clean environment, it turns out, looks like a luxury good when all you have to cook the evening meal is dried buffalo dung and some rice.

And when a country has stronger rather than weaker property rights, its people their own actions reflected back to them, and are in a position to protect their own patch from others.

Because all in all, most people when they can afford it prefer cleaner to dirtier.

And that’s why most places that are freer are generally the places that are cleanest – and why “free markets correlate with clean, and the lack of free markets correlates with dirty.”

2 comments:

  1. There is an argument that the cleaner countries are only so because of tough environmental legislation, and the fact they effectively export some of their 'externalities' (i.e. their demand for products produced by dirtier industries is generally fulfilled by industry in the dirtier counties, most notably China and India). I doubt these externalities make a significant difference, but it would be good to see a convincing argument that puts this beyond doubt.

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  2. First, thank you for your blogging, I usually enjoy reading it.

    But in this case I think you got some problem of that kind where correlation does not mean causation. The free markets that boom in the wealthy countries cause the poor world countries to produce at worst (because cheapest) conditions (by keeping them in debt). Environment protection comes with wealth. The wealthy nations suck out all wealth from the poorer nations and they can't afford any effort on environmental protection or worker health.

    I share a few clips worth watching - some with time index set to support the statement above:

    https://www.youtube.com/watch?v=uWSxzjyMNpU
    https://www.youtube.com/watch?v=JcJ8me22NVs
    https://youtu.be/52Mx0_8YEtg?t=1h7m7s
    https://youtu.be/X7jgQni6jQ4?t=14m46s

    Cheers,
    Kai

    ReplyDelete

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