Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

December 13, 2007

Why Capitalism Is Not Anti-Environment

by Brad Warbiany

To obtain shellfish, it’s often required dredging the sea floor. That’s a particularly nasty proposition, because it destroys reefs harboring complex ecosystems. And at the same time, it’s not particularly energy-efficient, and the damage done tends to also damage the shellfish recovered. However, a new type of non-invasive dredge is changing that (at least for scallops):

However, in one case—scallop trawling—Cliff Goudey of the Massachusetts Institute of Technology reckons he has a solution. He and his team have designed a dredge that can dislodge scallops without touching the seafloor.

The dredge has several hemispheric scoops in place of the toothed bar. As it is pulled along, the scoops direct water downward. That creates a series of gentle jets that can shuffle the scallops from their resting places—but the streams of water are not powerful enough to damage the benthic zone’s long-term tenants. And the scoops swivel out of the way if they encounter anything solid, so the dredge does not destroy such protuberances. Best of all, from the fisherman’s point of view, it takes less effort to float a dredge on water jets than it does to drag it across the uneven surface of the seabed. That makes Dr Goudey’s new device a more fuel-efficient way to fish than the traditional method.

Having assessed a prototype both in a laboratory tank and in the sea off the coast of Massachusetts, Dr Goudey was recently invited by the University of Wales to test his invention against a traditional dredge. New and old designs were dropped from the stern of a trawler and towed across the seabed off the Isle of Man. They each caught the same number of scallops. The new dredge, though, damaged the catch much less than the traditional one.

Most of what humans do is considered damage to the environment, at least by the strongest of environmentalists. And unfortunately, with the old dredging technique, they have somewhat of a point. There was very little way to capture the externality of damage done to the environment. So the environmentalists resort to their only tactic: ban it immediately.

But look at what happens when the market is able to innovate? They find a better way of doing it. It catches the same number of scallops, so it’s just as effective. It uses less energy, so it makes more money. And even better, it causes less damage to the scallops, so they can likely be sold for a higher price (earning more money). So fishermen make more money, the environment is not damaged, and consumers get higher-quality scallops. We’ve all become richer– due to capitalism.

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  • http://publiusendures.blogspot.com Mark

    While we’re at it, we may as well point out that the places with the worst pollution in the world are almost universally places with tremendous amounts of government interference in the market. We might also point out that one of the current US government-preferred way of handling pollution is to increase corn ethanol subsidies, even though corn ethanol production uses almost as much energy as it creates and even though this causes world food prices to rise. And we might also add that government interference in markets (aka, trade protectionism of various stripes) shields polluters from having to pay for damages caused by pollution….

    I could go on….

  • Will

    You can hardly make a generalization about environmentalism and capitalism based on one example in which shellfish farmers have happened to find a more cost-efficient way to do something that happens to be more eco-friendly. The thing is: capitalism will do what it must to make a profit. If the new, more efficient, more cost-effective way of getting shellfish happened to be more polluting, it would probably still be implemented anyway – see what I mean? The environment is a what we call a ‘market externality’, and a free market system does not take it into account. This is where the government must step in and impose regulations. The example you’ve given us is a happy situation in which a more cost-effective technique has resulted in gains for the environment as a side-effect, but this is hardly what happens usually.

    The solution? In addition to government guidelines, the market needs to be restructured so that going green is INHERENTLY profitable, not the opposite. There are few ways to do this: create demand for green, or use the government to create incentives for green or penalties for anti-green (as previously mentioned). Rallying market forces to accomplish environmental goals has never been a bad idea, but it takes effort.

  • Dogma_addict

    While I agree with the premise, this doesn’t strike me as that good of an example. Who’s to say that banning the bad harvesting method wouldn’t have been the very incentive needed to motivate the market to discover an eco-friendly method?

  • http://thelibertypapers.org/ Brad Warbiany

    Will,

    Actually, the generalization already exists, I was pointing to this as one concrete example. Humans, by nature, don’t like pollution. Whether through the market or the government, we tend to punish those who are dirty.

    The wider point (and this better addresses Dogma_addicts’ comment), though, is that the way out of the mess isn’t simply banning things you don’t like. It’s finding ways to make them better, which is what technology offers us. For example, there are lots of very smart people working on finding alternative ways of generating energy. Hybrids are an example of a desire to reduce pollution and increase gas mileage (thus decreasing usage cost) of automobiles. Banning internal combustion engines won’t make automobile technology better any faster, it will just make it a hell of a lot more expensive and less efficient as those very smart people continue working. Technological breakthroughs are unplanned, and adding pressure doesn’t change that, it just makes sure that we’ll use what’s infant technology is currently available and inefficient while we wait, instead of using what’s already proven and working at lower cost. We may internalize the externality with current alternative-fuel technology, but by doing so we’re trading economic growth for a cleaner environment, when allowing that economic growth to occur first will likely lead to that cleaner environment down the road naturally.

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