The destruction of world fisheries resources is not really a problem of externalities (differences in social costs and private costs of production [as in copper smelter poisoning of the countryside] (or of consumption), but a better example of the "tragedy of the commons." Any fixed free (unproduced) resource will be overconsumed or overutilized and ultimately destroyed. Most external costs (which are ubiquitous) merely lead to minor and manageable misallocation of resources. The destruction of Earth's resource endowments (natural capital) without appropriate and offsetting replacement by capital accumulation (human and physical) impoverishes humanity and all living creatures.
It is conceivable that we can develop substitutes for the resources we destroy (reforestation, fish farming) but when this is done by the market, the result is nearly always and unavoidably a destruction in the (non-market) quality of the environment and very often unintended degradation of other resources. Thus we kill off whales, and substitute petroleum. Whatever we do, we can only guess at the full social cost of uncontrolled mining of resources. We are bound to make serious policy mistakes, even if we use the most advanced forecasting systems. The waste in investments in world energy systems arising from premature deployment of fission nuclear power runs into the trillions of dollars. The excessive reliance on uncontrolled and inefficient use of coal by threatening a global warming crisis may cause trillions of dollars of inefficient resource misallocation.
The causes of environmental destruction are primarily economic -- billions of persons making resource use mistakes simply because the prices make it in their interest to do so. Most prices are not set in unfettered markets. Even our nearly perfect "efficient" capital markets in the U.S. are rigged and manipulated to benefit certain players (e.g. "market makers" and specialists) at the expense of everyone else.
The solution popular with many economists and libertarians is to free markets of government regulation. I believe that most of the environmental problems are the result of inadequate, inefficient, and unjust regulation -- selfish, class-interested, nationalistic, ignorant regulation. I believe that free markets to work in the interest of mankind, require free, educated people to make economic decisions. Only when people are able to make efficient consumption and production decisions will we be able to achieve our goals for the future of mankind. The vast majority of people want to live free, healthy, and long lives and to provide their children with even better conditions than they have experienced. No democratic kleptocracy can long endure. Compulsory redistribution from the rich to the poor is a a hopeless, socialistic dream. The rich have the power and wealth to defend their property. "Voluntary" redistribution from the rich to the public occurs constantly. Universities, once supported by the state, kings and the church, are now increasingly supported (in the U.S.) by voluntary contributions of their alumni and private foundations and by tuition and fees. The really great fortunes are largely dissipated to great projects for the public good -- the Rockefeller and Ford (and many other) foundations have revolutionized agriculture, science and education in the U.S. Endowments to Oxford and Cambridge in the middle ages and Renaissance were stolen from poor scholars and fostered idleness and self indulgence in the fellows who seized the endowments for their own benefit. (Adam Smith despised the waste at Oxford where he studied several years). Today well-endowed universities in the U.S. are the leading research institutions in the world, the most demanding of their faculties, and the most productive. It is almost a certainty that most of the great scientific discoveries will be made in these universities (along with a few outstanding state universities) or at least by their graduates and postdocs. In addition, we get the social benefit of events like the Nude Olympics at Princeton which exposes all of (some of) the smartest young people to the world to the environment. |
