Ronin of the Spirit

Because reality is beautiful.

Environmentalism and Overpopulation: The Solution, Part IV

“Strong property rights and fairly shared property. ” As Han Solo would say, “Well, that’s the trick, isn’t it?”  Shared property tends to scare people.  When the very phrase “shared property” is uttered, the first thought which jumps to most American minds is “shared at the point of a gun.”  And not without reason.   Socialism claims lofty ideals about sharing, but in the end, some people will not share, and to them, in varying degrees and forms, force must be applied.   Marx took the philosophy of socialism, and found what he thought was the perfect form for its ideals, a form he believed could be reached basically peacefully, requiring violent change, but not necessarily violence. Stalin and Mao disagreed.  In the name of Communism (suggesting property is held in common) more dictators seized power and millions died.  

The idealist Communist rightfully says communism didn’t fail the people, the leaders failed both Communism and the people.  Fair enough.  The trouble is, the bureaucracy required to force Communism upon people has the power to force almost anything upon people.  The great failing of Communism is that its incentives are counterproductive.  “From each according to his ability, to each according to his need.”  Every person is called upon to work to the best of his ability for the people, and the people will make sure all of his needs are met.   Under capitalism,  if there is something I need, I can communicate to others how much I need it by how much I am willing to pay.  I can communicate to others how much I value my time by how much I attempt to charge for it. Since I trade money made by working (time) for things I need and I can choose how much I work, I can decide for me personally, how much work I want to do, and I what I think I need for it.  Under communism, others must determine the value of my work, and what I need.    Under capitalism, there was incentive to work as hard as possible to get what I need. Under communism, the quality and quantity of work I do have been disconnected from what I receive for doing it.  There is no incentive for me to work very hard.  An outside force must motivate me to work.  The most popular one is terror. The Communist government must be able to cause terror to function.  It is the greatest enemy of its own ideals.

Democratic socialism seeks to achieve many of the same goals of communism, but produces and applies force in a different manner.  By and large, democratic socialism is a pro-capitalist system.  The people must have personal property because the force applied is most often in the form of taxes.  The decision to apply this force is undertaken by democratic, rather than by single party process.   The incentive issue still exists, but to a much smaller degree. Progressive income tax is an example of  a socialist policy.   Capital is removed by threat of kidnapping (imprisonment for tax evasion) from the capitalist, and given to those in need.   The wealthier the capitalist, the larger percentage of wealth he must pay.  The incentive issue is making sure the taxes are not so high as to dissuade capitalists from earning more money.  If the capitalist refuses to work to collect capital to the best of his ability the economy stagnates. 

When any property is shared under any system, incentive is always an issue.   Even in the capitalist, outwardly anti-socialist (but admittedly socialist) U.S., shared property is unavoidable.  Schools, parks, libraries and roads are all shared property.   They all must provide a service, but the incentive structure is strange.  Libraries for instance, must not dissuade people from coming, least they reduce the number of patrons and reduce their grant from the city.  On the other hand, if they are too attractive to people, they will suffer wear and tear incommensurate to the grant they receive.    Parks suffer from the same difficulty.    We attempt to remedy these problems of shared ownership with a bureaucratic apparatus incorporating varying degrees of democracy.  (The city of St. Paul, for instance, has been very successful with an elected rather than appointed parks commissioner.  Her city parks are considered some of the finest and most cost efficient in the U.S.) 

There is, however, already the basis of a shared property system incorporating democracy, very limited bureaucracy, and high price efficiency.  It works towards the benefit of all the members, and has extreme respect for property rights.  It’s called shares.   If everyone who owned part of a shared ownership system was given a singe common stock share, then they would not need to trust a bureaucracy or even a democratically appointed leader to execute the fair use of the property.   There is no disconnection of self interest and group interest.  If the price to use a shared property is too low, dividends will go down for the owners.  If the price is too high, dividends will go up, but so will cost more to use.  Since the owners are the users, Adam Smith’s guiding hand works to maximize use and minimize price.  

Obviously, stock is not a perfect system for shared owner/user systems because stock can be sold to anyone.  When the ownership is passed from the users to others, the quality of the service would not matter to the new owners. Owner/users are concerned both with tangible profit and intangible profit. Owner nonusers are not concerned with intangibles, and the overall quality of the service will go down to the most price efficient level.  There are many specifics to to the owner/user share system which would depend on the nature of the shared property.   This fine tuning is dependent upon the shared property in question.   The specific example I want to give is of air.

Regardless of legal status, 1/6 billionth of the air on earth belongs to each person.  If it is denied to them, they will die.   It is theirs by birthright.   The owner/user share system applied to air does not create a new property right, but codifies one of the oldest.   To ensure that no person or group gain more than their share of influence over the air, the common stock share cannot be sold, only rented.  Companies cannot own air shares, only individual people may own one each.   For a company to displace one’s air they must pay rent to the air’s owner.  For instance, if a factory was made which produced a chemical byproduct  which was measurable in a 100 mile radius around the factory, then everyone in that radius has a right to charge the price they see fit for space in their air to the company.  If the company produces a byproduct which is measurable all over the wold, then all the owners must be paid.

This system tends to raise people’s ire, but it is not a secret attempt to control air pollution, or “back door socialism,” as I have been accused.  If a company made ping-pong balls as a byproduct, and running their plant caused thousands of ping pong balls a day to pour onto one’s lawn, legal action would be quick and decisive.  How is the air you need to breath less your property than your lawn?  Pollution is a property rights issue.  Polluters do not pollute people’s living rooms, because they would have to pay to use what is clearly someone’s property.  They pollute the air because it is not clearly anyone’s property. Making air legally belong to it’s rightful owners is a capitalist step, not a socialist one.  

Post industrial society is founded on a fallacy: the open loop.  There are no open loops.  Everyone is downwind from somewhere.  Everyone is downstream from somewhere.  Earth is a closed loop.  Would this share system enormously impact industrial society?  Yes and no.  The monetary cost of doing some kinds of business would skyrocket.  However, the real cost would remain the same.  The reason the monetary cost would increase is that the existing market hides true cost due to market distortion.  When everything is owned, and and every owner can rent, the real cost is the purchase cost.  Companies are not prevented from producing anything the market will bear, they are merely prevented from selling it with the real cost hidden.  This form of environmental protection requires no unique environmental police; civil courts are are already well adapted to process storage without payment suits.  This system allows democratic process of purchase in a perfect market to decide the cost of pollution.   Environmental responsibility with greater freedom, and less government. 

In Part V I will cover global government, an obvious necessity to discourage the Netherlands Hypothesis, but again, with a focus of freedom, and human rights.

December 13, 2008 Posted by | atheism, Ecology, Government, Politics, Self discovery, skepticism, Uncategorized | , , , , , , | 2 Comments

Environmentalism and Overpopulation: The Solution, Part III

Perfect market is the greatest instrument of human freedom I know of, and the ethical cornerstone of my entire idea.  A perfect market consists of  (courtesy of wikipeida)

  • Rationality of all market actors (Rationality in meaning of the actor’s utility maximization)
  • No transaction costs (particularly no information costs and no taxes)
  • Price taking behavior – there is a sufficiently large number of participants such that no individual can affect the market
  • given rare resources
  • freedom of decision to do something or to let it be (no external effects)

People trading rationally, with all the information they need to make a decisions, with no distortions for big enough traders, something to trade, and no coercion to act or not act in anyway.   It’s something beautiful.  “Market place” doesn’t just mean the buying and selling of products, but also the grand market place of ideas.  The right to free speech is a component of the market place of ideas, as is the right to free press, and free assembly.  The right to practice religion as one sees fit guarantees numerous sects and religions competing for the hearts and minds of the people.  The right to keep arms of the US Constitution, and the right to security of person in the UN Bill of Rights are both to secure the right to act free of coercion.  Ultimately, the perfect market, be it for goods, services, ideas, or beliefs,  is the foundation of freedom.

A perfect market is, a direction, not a point one arrives at, but the more perfect a market, the more freedom for all.  I believe there is no more effective way to reduce pollution and birthrate (more on that later) than to work toward a perfect market.

In a perfect market, there is no legal theft, no  hidden payments, and no hidden costs.  I will use the existing market place of open pit coal mining to highlight an imperfect market.   No one breathes without trees, they are the lungs of the earth.   There are 6 billion people on earth.  Each tree is an oxygen factory, the output of which goes equally to each member of the population of earth.  If a person had a contract to receive a percentage of a factory’s output, then regardless of who owned the factory,the owner could not destroy the factory without consulting the person who owned a percentage of the output. (Note, I know that this example is somewhat weak, I use it because it is far easier to explain than the more correct ones.  Please feel free to argue this in the comment section.)  Property rights for the factory output are strong.  Property rights for organic oxygen output are nonexistent.

The open pit mining process begins by blasting the ground cover (largely trees) over the coal.  Stealing the future “oxygen income” of 6 billion people.  The coal industry is one of the most heavily subsidized on earth, particularly with reduced property tax.  The coal is loaded onto trains, the cost of transportation depending on diesel fuel, which is produced by other subsidized companies.  It is taken to a power plant, which if it is new, was most likely given property tax break to encourage it’s construction, and burned, putting CO2 into the air which effects everyone as much as the loss of the trees.  The worst pollutants are scrubbed out of the coal (the cost of the scrubbers often subsidized) and disposed of as industrial waste.  Due to radium as a fraction of the mass of coal, coal power plant reclaimed ash is actually more radioactive than nuclear power plant waste. Yet, it is disposed of as far cheaper industrial, rather than radioactive waste in tax supported, or privately owned and tax subsidized, waste management facilities (due to an EPA grandfather clause).

Thus, the real cost of coal would include the cash value of the lost oxygen, the cash value of the subsidy given to the extractor, the cash value of the subsidy given to the fuel producer of the transportation, the cash value of the subsidy given to the power plant, the cash value of the subsidy of the fuel for the fly ash transportation, and the cash value of the subsidy given to the waste management authority.

The complexity of calculating such a thing is made yet more difficult by the fact the subsidy would be different for each county, state, nation, company,  etc.  In reality, it is impossible to calculate such a thing.  The best numbers we have are educated guesses, on this free market phenomenon.  In defense of free market, as awful as the above sounds, it works towards the lowest price  in the end, as well as profit for the stock holders, because the company which uses the subsidies most effectively will sell the most. For the most part, this is good for everyone.  Coal is cheaper for everyone and the owners get rich.  Owners, means stock holders.  More than half of heavy industry stock is held by institutions in mutual funds.  Profit for heavy industry does not benefit primarily a small group of plutocrats.  It primarily benefits the small investor, working hard on his 401K or child’s college education fund.

The trouble is, as good as low cost products and profit for the stock holders are, (and those are truly good things) there are other important things that the free market doesn’t do so well, like resource management.  Though functioning planned economies have the worst pollution in the world (Russian and China), large free markets are a close second.  If people value resources, they can show their preference for companies that also value resources, but only in a perfect market.

In a perfect market, their are no hidden payments, so there is no subsidy.   Coal costs what coal costs.  It might be tempting to believe that subsidies do not follow market rules.  Sadly, this is not the case. Subsidies do follow market rules: companies get money from the government in exchange for providing services for members or sections of the government.  The companies compete fiercely for the subsidies.  Exxon Mobil spent 350 million on lobbying ( a form of advertising to the government decision makers) to get 3 billion dollars in subsidies in 2008 alone.

In a perfect market, the government would not be able to give any special treatment to any company, saving the stockholders of Exxon Mobil 350 million, but costing them 3 billion.  Thus, the incentive to keep the existing system is strong.   Three billion to one company is 10 times greater than the total subsidy spent on renewable power.  This leads some to say “Renewable power needs a bigger subsidy.”  I disagree.  Subsidy distorts the market, regardless of who gets it.  Money is what we exchange for our time on this eath.  The perfect market, like all other markets, is a place where human life is bought and sold, but unlike other markets it is where there is the least waste of this, the most valuable of all commodities.  As, such, a perfect market is as sacred as free speech, or free expression, for the same reason: human dignity.

Subsidies represent a lie about price.  The solution to lies is never more lies.  Humans can be trusted to make wise decisions under perfect market conditions.  To believe in human potential, to respect human dignity, means to work toward a perfect market.

All subsidy must go.  Every business must stand on it’s own.  If sounds like utopian, it’s not, at least to some.  No mater how deeply a person believes in perfect market for everyone else, few people believe it for them and their friends.  This is the reason, despite the fact people value it, we generally don’t work toward a perfect market.

A world without subsidy offers no tax breaks to religious organizations.  To allow tax free status to some service providers (churches and other non-profits) and not to others (business providing identical community assistance, lectures, concerts, elder care, and dating service) is unethical, and anti-religious.  Without tax breaks, the churches which provided the best service for the lowest tithe would immediately out compete the other churches.

A world without subsidy provides no benefit to being married.  Or owning a house.  Married people would have to compete in the open market for housing and employment just like everyone else.   Nor does it provide any tax penalty for being single, or childless.   This is the first step voluntarily reducing population.  Despite embracing the perfect market,  irresponsibility will still happen.  People will still have more children then they can afford, and buy larger houses than they need, but they can no longer profit by it.

(I am aware that these examples are controversial, and poorly supported here.  For brevity’s sake, I will argue specifics with anyone who chooses to, in the comment section.)

But how would even a perfect market deal with issues such as air pollution?  Real price cannot be calculated.  We know real price is impossible to calculate on the fly, because if it could be calculated, planned Soviet style economies would work better than free market ones. Only Adam Smith’s “guiding hand” can effectively determine price.   The fact you can rent your property freely for the price you wish and under the conditions you wish is why your living room isn’t full of toxic gas.  The fact that you cannot rent your 1/6 billionth of the earth’s air freely for a the price you wish under the conditions you wish, is why the air you breath is full of toxins.

The key to allowing the perfect market to solve the issue of pollution is obviously strong property rights, but how could 6 billion people share their air and common oceans without a tragedy of the commons?

I will address that in Part IV.

December 9, 2008 Posted by | atheism, Ecology, Government, Politics, Religion, Self discovery, skepticism, Transportation, Uncategorized | , , , , , , , , , , | Leave a comment