Guest Post: Free Market Ecology

Submitted by John Aziz of Azizonomics

Free Market Ecology

These gargantuan global conferences where the emissaries of governments meet in hallowed halls to thrash out a global planning agenda — dressed in the clothes of ecology, or sustainable development, or whatever the buzzword of the day — are a waste of time.

They are a waste of time for the taxpayer, who has to stump up to pay for such efforts. They are a waste of time for the protestors who swarm to such events holding placards and shouting slogans. They are a waste of time for the ecologists who — whether right or wrong — believe that the present shape of human civilisation is unsustainable. Possibly the only group that really benefits are the self-perpetuating bureaucratic classes, who often take home huge salaries they could never earn in the private sector.

And the Malthusian targets of the bureaucracy have a history of missing.

The Guardian notes:

Rio+20 was intended as a follow up on the 1992 Earth Summit, which put in place landmark conventions on climate change and biodiversity, as well as commitments on poverty eradication and social justice. Since then, however, global emissions have risen by 48%, 300m hectares of forest have been cleared and the population has increased by 1.6bn people. Despite a reduction in poverty, one in six people are malnourished.

If these bureaucratic classes knew the first thing about economics or markets, they would begin to question whether such conferences — and all the promises, intergovernmental commissions, and regulatory pledges they spawn — are necessary. The more I question, the more I come to believe that all that is needed to halt any man-made ecological crises are free markets and free speech.

The history of human civilisation has been one of triumph over the limits of nature. While we have had our ups and downs, recent projections of imminent ecological ruin — such as those in the 1970s produced by Ehrlich and Holdren and the Club of Rome, or earlier by Keynes, Malthus and Galton (etc) — have all failed to materialise. But the trend goes back much further, into the distant past. Throughout our history our species has done what has been necessary to survive. Humanity has lived on this planet for upwards of 500,000 years, and through that time, we have survived a myriad of climate changes — solar variation, atmospheric variation, cycles of glaciation, supervolcanoes, gamma ray bursts, and a host of other phenomena.

It will be no different this time. We are dependent on our environment for our life and for our future. That is widespread knowledge, and so as the capable and creative species that we are, we have already developed a wide array of technological solutions to potential future environmental problems. This is a natural impulse; humanity as individuals and as a species hungers for survival, for opportunities to pass on our genes.

As I wrote last month:

If we are emitting excessive quantities of CO2 we don’t have to resort to authoritarian centralist solutions. It’s far easier to develop and market technologies (that already exist today) like carbon scrubbing trees that can literally strip CO2 out of the air than it is to try and develop and enforce top-down controlling rules and regulations on individual carbon output. Or (even more simply), plant lots of trees and other such foliage (e.g. algae).


If the dangers of non-biodegradable plastic threaten our oceans, then develop and market processes (that already exist today) to clean up these plastics.


Worried about resource depletion? Asteroid mining can give us access to thousands of tonnes of metals, water, and even hydrocarbons (methane, etc). For more bountiful energy, synthetic oil technology exists today. And of course, more capturable solar energy hits the Earth in sunlight in a single day than we use in a year.

The only reason why these technologies are not widespread is that at present the older technologies are more economically viable. Is that market failure? Are markets failing to reflect our real needs and wants?

No; those who so quickly cry “market failure!” fail to grasp markets. Certainly, I think GDP is a bad measure of economic growth. But throwing out the concept of money altogether as a measure of society’s needs and wants is completely foolish. Markets are merely an aggregation of society’s preferences. Capital and labour is allocated as the market — in other words, as society — sees fit. As Hayek showed in the 1930s, the market gives society the ability to decide how a good or service should be distributed based on individuals willingness to give money for it. The market gives feedback to producers and consumers through the price mechanism about the allocation of resources and capital, which in turn allows on the basis of individual consensual decisions corrections that prevent shortages and surpluses. Under a planned system there is no such mechanism.

The fact that greener technologies have not yet been widely adopted by the market is merely a symptom of the fact that society itself is not yet ready to make a widespread transition. But the fact that research and development and investment continues to pour into green technologies shows that the market is developing toward such an end.

Solar consumption has gone parabolic:

And so it will continue; as society evolves and progresses, the free market — so long as there is a free market — will naturally reallocate resources and labour based on society’s preferences. Without a free market — and since 2008 when the banks were bailed out and markets became junkiefied intervention-loving zombies, it is highly dubious that there is such a thing as a free market in the West — planners will just end up guessing at how to allocate resources, labour and capital, and producing monstrous misallocations of capital.

The political nature of such reallocation is irrelevant; whether the centralists call themselves communists or socialists or environmentalists, their modus operandi is always the same: ignore society’s true economic preferences, and reallocate resources based on their own ideological imperatives (often for their own enrichment).

My view is that the greatest threat to the planet’s ecology is from the centralists who wish to remove or pervert the market mechanism in order to achieve ideological goals. It is not just true that removing the market mechanism retard society’s ability to evolve into new forms of production, resource-allocation, and capital-allocation based on society’s true preferences. The command economies of the 20th Century — particularly Maoist China and Soviet Russia — produced much greater pollution than the free markets. Under a free market, polluters who damage citizens or their property can be held to account in the market place, and through the court system.There is no such mechanism through the kind of command of economy that the centralists seem to wish to implement.

The answer is not central planning and government control. The answer is the free market.


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