CAPITALISM HELPS THE ENVIRONMENT

The latest Robert Kennedy is a fairly hysterical environmentalist with a typically Greenie liking for exaggeration and prophecies of doom but some of his ancestral brains do show through. He is one of the few Greenies who recognize that competitive capitalism is good for the environment. He says that the problem lies with capitalists who rely not on open competition for what they get but rather on privileges that they get from government. Almost any economist would agree with that. In economists' terms, Kennedy is advocating full costing of "externalities" (roughly, harm that businesses do to the interests of people generally in the course of their activities) and believes that only government can enforce such costing (i.e. charge polluters for the harm done by their pollution) -- which is probably true in the world as we have it today. I think it is mostly clever talk, though. I get a strong impression that he would have a wildly higher estimate of the externalities than would be warranted by any reasonable evidence. Excerpt:

"The best thing that could happen to the environment is free-market capitalism. In a true free-market economy, you can't make yourself rich without making your neighbors rich and without enriching your community. In a true free-market economy, you get efficiencies and efficiency means the elimination of waste. Waste is pollution. So in true free-market capitalism, you eliminate pollution and you properly value our natural resources so you won't cut them down. What polluters do is escape the discipline of the free market. You show me a polluter, I'll show you a subsidy -- a fat cat who's using political clout to escape the discipline of the free market....

Laissez-faire capitalism does not work, particularly in the commons. Individuals pursuing their own self-interest will devour the commons very quickly. That's the economic law -- the tragedy of the commons. You have to force companies to internalize costs. All of the federal environmental laws are designed to restore free-market capitalism in America in this regard.

I don't even consider myself an environmentalist anymore. I'm a free-marketeer. I go out into the marketplace and I catch the polluters who are cheating the free market and I say, "We are going to force you to internalize your costs the same way you are internalizing your profit." That's what the federal environmental laws allow us to do: restore real property rights in America. You cannot get sustained environmental protection under any system but a democracy. There's a direct correlation around the planet between the level of tyranny in various countries and the level of environmental degradation."

More here. (Via Tyler Cowen)