Letter From Washington: Why Can’t Things Like This Happen More Often?

by Eli Lehrer on March 15, 2011

photo by wallyg/Flickr, used under a Creative Commons license

I was in Tallahassee, Florida this past Friday largely to push for the Heartland-idea coastal preservation package that is being attached to the Heartland Legislative Forum member Alan Hays’ broad Florida Citizens Property Insurance Corporation reform bill.

This bill—and the coalition around it—is a perfect example of the way that free marketers and environmentalists can work together. (The press conference included Heartland, Americans for Prosperity, the Florida Wildlife Federation, the Tallahassee Tea Party, and the local development control group 1,000 Friends of Florida.)  I fully expect that the bill will pass: it cuts the size and scope of government intervention in the property insurance market while, by implication, preserving millions of environmentally sensitive acres of coastal land.

So why can’t things like this happen more often?

I think that there are three major sets of reasons: reasons that are the mutual fault of the environmental groups and free marketers, reasons that are mostly the fault of free market groups, and reasons that are mostly the fault of environmental groups.

Mutual blame first: Both environmental and free market groups are too suspicious of each others’ motives. In general, neither those who work for environmental groups nor those employed by free market groups are in it for the money or servants of nefarious forces. Although both environmental and free market groups provide executives with decent upper-middle class incomes, nobody goes to work for an environmental group or a free-market think tank in order to get rich. Both pay decidedly modest salaries to most employees and a good portion of the people working for them could probably make more money doing something else.

Likewise, no legitimate free market group or environmental that I know of is funded largely to advance the interests of any particular private business interest. (There are, of course, pure “astroturf” groups and non-astroturf groups that will sell their services to the highest bidder in roughly equal numbers.)  While there are environmentalists who want to impose a centrally planned economy and “free marketers” who favor anarchy, they’re generally rather fringe elements.  Most free marketers want a less regulated (but not, unregulated) economy that might include somewhat fewer environmental protections; most environmentalists want a cleaner environment but, don’t really want to overthrow capitalism to get there.   This results in natural conflict but these perspectives don’t make either side “evil.”

Free market groups are too willing to ignore the real successes that environmental legislation has achieved. Pollution is, in every economic textbook I’ve seen, the number one example of an externality. A working capitalist economy should make polluters pay the costs of their pollution. Since pollution doesn’t respect state boundaries, furthermore, some form of federal role in doing this makes sense and thus, devolution of everything is a terrible idea.

The air and water are cleaner since the Clean Air and Clean Water Acts became law, even if their implementation has problems and is often too heavy on command and control. Not that every environmental law is a success – some other big environmental laws, like the toxic waste cleanup Superfund, are decidedly less successful.

But suggesting the total elimination of government responsibilities in these areas, even if it were wise, isn’t politically viable or realistic. The idea of controlling pollution is a good one and a legitimate government role.

Free marketers should not ask: “How can we eliminate all government roles in protecting the environment?” That isn’t consistent with a functioning capitalist economy. Instead, they should ask: “How can we unleash market forces to protect the environment.”

Environmental groups are too stuck in a mindset that sees big government and social preferences of the Left as the necessary friends of the environment.

Simply by virtue of its size, the government is surely the largest polluter in the country.

Likewise, while it is surely possible—and sometimes necessary—to reduce pollution via direct command and control mechanisms, simple withdrawal of subsidies can often have the same or better gross environmental consequences than implementing one command and control mechanism or another.

The work I did in Tallahassee on insurance proves that but, given the sheer size of the government, it’s almost certain that some subsidy, somewhere, can be said to exacerbate any given environmental problem. Attacking these subsidies shouldn’t be the full mission of any large environmental group. . . but, potentially, it’s an important and under-recognized task that the environmental movement would be wise to pursue.

Until next week,

Eli Lehrer, Vice President, Washington, D.C. Operations

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