The Daily Bork

April 22, 2005

From the invisible hand to the heavy hand

God what a week. Anyway...

Seems the greenie frogblog didn't much like my dislike of party blogs. Oh well, each to their own. But I do notice they are trying to cast themselves as innovative marketers...

The [Economist] editorial seeks to compare and contrast the “mandate, regulate, litigate” approach of the traditional environmental movement and the market-based approaches offered by innovative environmental thinkers. Whereas the traditional green thinker would say “you can’t do things which hurt the planet and the Government will punish you if you do”, the innovative green thinker would say “you can do things which hurt the planet, but so long as you’re willing to pay for the environmental consequences of your actions”.

However, the idea that government regulation and market-based solutions are somehow polar opposites is quite misleading.


Of course government and markets can go together, there is no doubting that. What the Economist would be espousing is "free" markets as opposed to mercantilism or highly regulated markets which devlove into crony-capitalism or worse.

Greenies can never quite come as close to free marketing as they would like to pretend:

Markets only work because they have rules governing them. The sharemarket only functions because there are piles of statute books regulating what you are and aren’t allowed to do. And the environmental trading of which the Economist speaks - such as tradable fishing quotas or carbon emissions trading - are only possible if someone (i.e. government) sets the rules of the game.

Markets generally require rules, even free markets, but the only "required" ones are more issues of trust. If you can't trust the chap you are dealing with to deliver the goods, pay up or not to kill you for the goodies then it isn't really a market anyway now is it? The piles of statute books for the sharemarket? Well, if you stripped away tax regulations and all the other government imposed fluff then the market would still work. Insider trading could be dealt with internally if it is considered to be a problem. There is no need at all for a *government* to be setting the rules. Likewise for quotas and carbon trading, although the latter is a fools games dealing in nothing and a perfect example of how such well-designed markets will fail. The total output of carbon remains the same, unless people buy emission rights they won't use which seems unlikely. Rich countries buy emission rights from poor countries to sustain their diversified and energetic economies. Poor countries get some cash but cannot develop because they can't utilise polluting or sink resources (sold their ability) or increase their economies which would increase emissions they no longer have a right to. So the rich get richer and the poor get poorer, great progressive idea that. Wait a few years and watch how this wonderful market will disappear.

The rest goes on with dubious examples about emissions trading on vehicles to encourage fuel efficiency/low pollution, somehow missing the point that a fuel efficient car is desirable and the price will relect that. No need for an extra vaporous market that serves only to distort pricing of what people want. The cynic would say the extra market is necessary for social engineering, the cynic would be right.

Finally there is a dubious discussion about goods everyone wants but are in no-one's interest to provide. The examples are clean air and water. The perfectly obvious answer is that if someone, particularly *everyone*, wants it then someone will provide it. What they mean of course is that they don't want to pay for it, except via taxes, because it is a "public" good and therefore must be concentrated in the hands of the government. Rather curious that the worst pollution occurs in highly statist countries, that the most economical cars are run in the richest countries and the cleanest air is not found where the government has a heavy hand.

Closing paragraph is, bluntly, crap:

The great worry is that, without this government involvement, we’ll be left with a pile of dollar bills but no clean water to drink. I, for one, would like people to have both.

If you have a pile of dollar bills (and not useless credits for your next Trabant purchase) and a desire for something then some enterprising type will deliver you clean water. It happens already. What you won't have in the highly regulated economy is both the water and the money, just look at health and education where money is hideously wasted and service is shocking.

Even better, if the control isn't concentrated in the hands of a few people we must absolutely trust not to wield water (or air or whatever) as a weapon as they have done time and again throughout history but in the hands of a diverse group who make their livelihoods providing what is needed, then we'll all be better off. But then no one would be "in control", which is the overriding urge of nearly all leftist thinking, and people would have to be responsible for themselves as well as others.

After a century of state controlled death and destruction beyond anything previously imagined you'd think people would be a bit more wary of vesting ever greater control in the hands of the state. Particularly when some of the worst perpetrators have had virutally identical ideals to justify the acquisition of that control. Still, hopefully, the new century will move us away from progressive maniacs knowing what must be done to save the future.

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