I am a university student and have just recently begun reading about Austrian Economics. I have read a few good books so far, but am currently just getting "the basics" under my belt.
Recently in my school some of the students have been learning in their economics courses "why the free-market fails". As they have heard that I am recently a believer in the free-market, they have sort of begun to attack me on my ideas, and I have had a hard time defending due to my still new exposure to this area of study. I am asking if anyone here could direct me to online PDF's or articles I could read to aid me in my defense. Or, preferred if possible, help me address their arguments or bring up scenarios to help address their attacks.
Their main argument is centered around externalities. My understanding so far seems to tell me that most of these externalities are solved with clear property rights. They however keep asking "how can we have property rights for things such as air?". I have come across so far articles talking about privatizing things such as roads, and even rivers....but air I have yet to come across and seems like the most difficult one of them all. They ask me to visualize a factory that is pumping toxic gas emissions into the air and hurting people further away. What is the free-market's answer to this?
Thanks in advance guys, I know this is the forum to come to for help on this.
See this and this.
Freedom of markets is positively correlated with the degree of evolution in any society...
http://mises.org/story/2120
I think that should do it. Although, it really isn't difficult to see how it would be solved, if it a factory is pumping toxic gas into the air anybody would believes their property rights are being violated can bring it to a private arbitrator. If the owner of the factor is proven guilty he has to pay compensation and refrain from doing it in the future. Alternatively he could buy the land or make an agreement saying that he is allowed to release toxic gas onto their property.
In fact the reason that there are so many factories pumping out so much pollution is because of poorly defined property rights.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
Thanks a lot.....I'll be busy reading.
Roy Cordato's book may also be of some help.
Its also for sale at the mises store.
Treat air pollution like any other sort of property damage.
If a near by railroad damages my crops with its smoke, I sue them and they must pay damages.
The problem that many people have with this obvious free market solution is that they don't oppose air pollution because of its effect on people, they oppose air pollution because of its effect on the air itself. But air can not be a victim as it has no rights, only people have rights. I'm free to pollute my own air, for example, I just can't pollute other people's.
Peace
"Treat air pollution like any other sort of property damage.
The problem that many people have with this obvious free market solution is that they don't oppose air pollution because of its effect on people, they oppose air pollution because of its effect on the air itself. But air can not be a victim as it has no rights, only people have rights. I'm free to pollute my own air, for example, I just can't pollute other people's."
Thanks for the responses everyone....I'm still reading up on things, but expect to get attacked hard on Monday ;)
Just some thoughts on the quote above....(I'm trying to anticipate how they would argue). When you say "If a near by railroad damages my crops with its smoke, I sue them and they must pay damages", is really a fair enough example to understand, and is an easy case to see how it would work out. What if the smoke weren't visible though, what if it were simply some sort of toxic gas, invisible, and floated down through the air and polluted a town hundreds of kilometers a way type of thing?
Or when you say, "I'm free to pollute my own air, for example, I just can't pollute other people's." How does that hold up to them claiming that your own air will in fact waft on over to your neighbor, so if you pollute it, your neighbor will suffer as well.
I think they basically wonder how the free-market would deal with a bunch of factories emitting a poisonous gas....how do you pin it on a particular factory? Who is to say who added the amount of gas that was "the final straw"?
Anyways, back to my reading ;)
DPatty: Just some thoughts on the quote above....(I'm trying to anticipate how they would argue). When you say "If a near by railroad damages my crops with its smoke, I sue them and they must pay damages", is really a fair enough example to understand, and is an easy case to see how it would work out. What if the smoke weren't visible though, what if it were simply some sort of toxic gas, invisible, and floated down through the air and polluted a town hundreds of kilometers a way type of thing?
You questions are the equivalent of asking, "What happens if someone steals my stuff but I don't know who it was?" That would be an unfortunate circumstance but it has no bearing on the permissibility or permissibility of theft.
In the case of a robbery, evidence must be provided to prove the suspect is in fact guilty. Why should it be any different with pollution? But if you found a certain kind of chemical on your property, that's your evidence, and its not that hard to figure out where it came from.
DPatty:Or when you say, "I'm free to pollute my own air, for example, I just can't pollute other people's." How does that hold up to them claiming that your own air will in fact waft on over to your neighbor, so if you pollute it, your neighbor will suffer as well.
That would be handled case by case. Either another person suffers from my pollution or they don't. If no one suffers then I have polluted my own air only, if others suffer then I have polluted other people's air.
DPatty:Who is to say who added the amount of gas that was "the final straw"?
It wouldn't be done that way.
Private solutions for cleaning pollution already exist. In the case of industrial rivers, each companies share of the burden is determined by how much of the pollution each contributed.
I always see these kinds of problems as something that individuals would spend a great ammount of time investigating. In a free market, not only do you have lawsuits against property damage but also a lot consumer and property holder awareness- it is more reasonable to be pre-emptive than to go to court. Researchers would be plenty, the general public well aware of a large ammount of dangers to themselves (when there isn't government telling what's best for you, you'd probably look a little further than Al Gore), factories and manufacturers would be pressured into revealing a great deal of their production process- something they'd have an incentive in doing in the age of green-consumption and well-distributed information.