Sometimes "environmentalists" suggest - hey, "society" needs to preserve "the environment" and government needs to have environmental laws, regulations, statutes, departments and bureaucrats to protect trees, animals, fish, oceans and the air.
As Penn and Teller often say, I'm calling bullshit on that, and here's why:
Kenya banned the killing of elephants in 1979, effectively nationalising its herd. At around the same time, Rhodesia (as it still was) made elephants the property of those whose land they were on. The result? Thirty years on, Kenyan elephants have been all but wiped out, while Zimbabwe’s are as numerous as ever.(hat tip: Samizdata)
Free markets revolve around property rights. Whats yours is yours, and nobody has a right to tell you what/how/where/when you can use your property.
Sounds simple, but why then do we meddle (regulate, tax, socialise and bureaucratize) with so much property, so much wealth, so much land, and people's most highly valued personal property such as their bodies, their speech and their relationships ?!?
If somebody owns something, they have an interest in it. If EVERYBODY owns something, then nobody has an interest in looking after it because nobody really owns it. A park and a public toilet are often used for the same things. Trains are used as big graffiti canvases.
Lets get something straight. Only misguided idiots still believe that free markets involve big greedy corporations buying the great barrier reef and dump toxic chemicals there.
No.
Instead, people seek to acquire property rights over a resource not for "exploitation" or to despoil it. But an entrepreneur will take a risk and pay money out of their own pockets to maximise their own profits. The only way to do this, is to put that resource to its most profitable use under free markets. And when it comes to natural resources, forests, oceans .. if you own part of it, and you paid good money for it, why would you trash it and make it worthless ?
Why would you fish all the whales out of the ocean, cut down every tree standing in a forest, dump chemicals on a coral reef ? You will soon see, within weeks, that you have destroyed any future value that the resource would have once held.
We also saw the British versus the French practice of Oyster farming in the 19th century. The French had property rights and licensing for oyster farming. The British banned it and said that the oceans are the property of the state. Yet nobody owned the ocean, nobody protected it and made sure that they could enjoy future revenues and future oyster catches ! So the British have no oysters left, and the French do.
Capitalism is great for the environment (however you define it).
You say:
ReplyDelete"If somebody owns something, they have an interest in it. If EVERYBODY owns something, then nobody has an interest in looking after it because nobody really owns it. A park and a public toilet are often used for the same things."
OK, well suppose a private company was to purchase a public city park. What is to stop them digging it up and converting the land into apartments, a factory or a shopping mall? What if all parks in a city were sold to private companies and they all did the same thing. Would this really be a good thing?
Okay anonymous. The free market will allocate the city park ownership through a property auction.
ReplyDeleteDevelopers who have an interest or a proposal will bid on the property at auction based on how much value they can get out of the ownership of the park.
Developer #1 wants to build a shopping mall, developer #2 wants to build a secondary school, develop #3 wants to set up a hotel and reception centre, developer #4 wants to keep it as a public park and developer #5 wants to build a multi-level car park.
The developer who will bid highest at auction is the one who can generate the most revenue and satisfy the most individual customers under the free market.
This process will put the land to its most profitable and beneficial use, and allocate the resource more effectively than government ownership.
The entrepreneurs each make an informed estimate as to how much they should bid on auction based on their proposed plans.
A public park doesn't generate much revenue at all, but at least it doesn't have high operating costs.
A car park that isn't in heavy demand in a very built up area will suffer the same fate.
For example:
A hotel in the wrong location won't be very profitable, so developer #3 will only bid $5mil. Developer #5 thinks a car park can earn a few million a year in revenue, but costs a lot to construct so he will bid as high as $4mil. If developer #2 thinks he can open a massive school with over 3000 students, he might bid as high as $12mil and he would be the new owner.
Of course, a public park won't be the likely outcome unless the other alternatives were less alluring, profitable and beneficial for society. A property developer won't spend $300mil building apartments in an area where he won't sell any. He will build them precisely where they are in demand by hundreds of individuals who are willing to own them.
But parks and public utilities aren't in demand. They are pleasant to have but people aren't willing to pay for them so the free market actually gets it right when it comes to building the right number of public parks. But government massively over-invests in them and builds them wherever possible, even if only 20-30 people use them each day.