Environmentalism Refuted

If global warming or ozone depletion or whatever, really are consequences of the actions of the human race considered collectively, but not of the actions of any given individual, including any given individual private business firm, then the proper way to regard them is as the equivalent of acts of nature. Not being caused by the actions of individual human beings, they are equivalent to actions not morally caused by human beings at all, that is to say, to acts of nature.

The intellectuals were totally unprepared for the world-wide collapse of socialism that became increasingly evident in the last decades of the twentieth century and that culminated in the overthrow of the communist regimes in Eastern Europe and the former Soviet Union. Carrying their ignorance to the depths of depravity, they have apparently chosen to interpret the undeniable failure of socialism not as evidence of their own ignorance but as the failure of reason and science. Socialism, they believe, is the system of social organization implied by reason and science. Its failure, they conclude, can only be the failure of reason and science.

Environmentalism is the product of the collapse of socialism in a world that is ignorant of the contributions of Ludwig von Mises-—a world that does not know what he has said that would logically explain the collapse of socialism and, even more importantly, the success of capitalism.

Because of ignorance of the contributions of von Mises, the great majority of the intellectuals, and of the general public too, which has been subjected to the educational system fashioned and run by them, continues to believe such things as that the profit motive is the cause of starvation wages, exhausting hours, sweatshops, and child labor; and of monopolies, inflation, depressions, wars, imperialism, and racism.

At the same time, they believe that saving is hoarding and a cause of unemployment and depressions, as is, allegedly, economic progress in the form of improvements in efficiency.

To obtain such knowledge, it would be necessary for them to read and study von Mises, who is far and away the most important source of such knowledge.

For perhaps a century and a half, the intellectuals have seen socialism as the system of reason and science and as the ultimate goal of all social progress.

On the basis of all that they believe, and think that they know, the great majority of intellectuals even now cannot help but believe that socialism should succeed and capitalism fail.

Carrying their ignorance to the depths of depravity, they have apparently chosen to interpret the undeniable failure of socialism not as evidence of their own ignorance but as the failure of reason and science.

It can no more be called a failure of reason than it could be called a failure of human legs if one man or a handful of men were somehow to deprive the rest of the human race of the power to use its legs and then, of course, found its own legs inadequate to support the weight of the human race.

So far is the failure of socialism from being a failure of reason that it would be much more appropriate to describe it as a failure of lunacy: the lunacy of believing that the thinking and planning of one man or a handful of men could be substituted for the thinking and planning of tens and hundreds of millions of men cooperating under capitalism and its division of labor and price system.

Because of ignorance of the contributions of von Mises, one cannot expect very many people to know that Nazism was actually a major form of socialism and thus that the fifteen million or more murders for which it was responsible should be laid at the door of socialism.

The great majority of the intellectual establishment never took these latter mass murders very seriously and certainly did not regard them as being caused by the nature of socialism.

The same intellectual quarter that a generation or more ago urged the totalitarian control of all aspects of human life for the purpose of bringing order to what would otherwise allegedly be chaos, now urges a policy of laissez-faire-—out of respect for natural harmonies.

It should be realized that environmentalism’s goal of global limits on carbon dioxide and other chemical emissions, as called for in the Kyoto treaty, easily lends itself to the establishment of world-wide central planning with respect to a wide variety of essential means of production.

The Reds claimed that the individual could not be left free because the result would be such things as “exploitation,” “monopoly,” and depressions.

The Greens claim that the individual cannot be left free because the result will be such things as destruction of the ozone layer, acid rain, and global warming.

The Greens want it for the alleged sake of avoiding environmental damage.

I consider the substance of my talk to be the refutation of the two essential claims of the environmentalists and then a critique of their essential policy prescription.

In his Principles of Economics, Menger develops two aspects of his theory of goods that are highly relevant to the critique of the environmentalists’ two essential claims.

The first aspect is his recognition that what makes what would otherwise be mere things into goods is not the intrinsic properties of the things but a man-made relationship between the physical properties of the things and the satisfaction of human needs or wants.

An example concerning goods-character being created only after the establishment of command sufficient to direct the resource provided by nature to the satisfaction of a human need would be the case of petroleum deposits lying deeper than existing drilling equipment could go.

Similarly, for some years after the creation of the goods-character of petroleum, those petroleum deposits containing a significant sulfur content were unuseable for the production of petroleum products and were therefore not goods.

The second aspect of Menger’s theory of goods that is highly relevant to the critique of the environmentalists’ essential claims is his principle that the starting point both of goods-character and of the value of goods is within us-—within human beings-—and radiates outward from us to external things, establishing the goods-character and value first of things that directly satisfy our needs, such as food and clothing, which category of goods Menger describes as “goods of the first order,” and, second, the means of producing goods of the first order, such as the flour to bake bread and the cloth to make clothing, which category of goods Menger describes as “goods of the second order.”

From there they proceed to goods of the fourth order, such as the equipment and land used to produce the wheat, and the raw cotton from which the cotton yarn is made.

Thus, goods-character and the value of goods, in Menger’s view, radiate outward from human beings and their needs to external things more and more remote from the direct satisfaction of human needs.

And as to the value of goods of the first order: “The value an economizing individual attributes to a good is equal to the importance of the particular satisfaction that depends on his command of the good.”

To apply Menger’s views to the critique of the essential claims of environmentalism, it is first necessary to stress the fact that in his account of things, nature’s contribution to natural resources is implicitly much less than is generally supposed.

My answer to this question is that what nature has provided is matter and energy-—matter in the form of all the chemical elements both known and as yet unknown, and energy, in all of its various forms.

Natural resources that are goods in Menger’s sense are natural resources provided by nature that man has made useable and accessible by virtue of discovering properties they possess that enable them to satisfy human needs and by virtue of gaining command over them sufficient to direct them to the satisfaction of human needs.

Practically nothing comes to us from nature that is ready-made as a useable, accessible natural resource-—as a good in Menger’s sense.

In another sense, however, the natural resources that come from nature-—the matter, in the form of all the chemical elements, known and as yet unknown, and energy in all of its forms-—are virtually infinite in their extent.

Even if we limit our horizon exclusively to the planet earth, which certainly need not be our ultimate limit, the magnitude of natural resources supplied by nature is mind-bogglingly huge.

Namely, not only does man create the goods- character of natural resources-—by obtaining knowledge of their useful properties and then creating their useability and accessibility by virtue of establishing the necessary command over them-—but he also has the ability to go on indefinitely increasing the supply of natural resources possessing goods-character.

He enlarges the supply of useable, accessible natural resources-—that is, natural resources possessing goods-character-—as he expands his knowledge of and physical power over nature.

Seen in its full context, man’s productive activity serves to enlarge the supply of useable, accessible natural resources by converting a larger, though still tiny, fraction of nature into natural resources possessing goods-character.

As I stated a moment ago, the supply of useable, accessible natural resources expands as man expands his knowledge of and physical power over the world and universe.

Up to now, although considerably expanded in comparison with what it was in previous centuries, man’s physical power over the world has been essentially confined to the roughly thirty percent of the earth’s surface that is not covered by sea water, and there it has been further confined to depths that are still measured in feet, not miles.

Atomic and hydrogen explosives, lasers, satellite detection systems, and, indeed, even space travel itself, open up limitless new possibilities for increasing the supply of economically useable mineral supplies.

If, over and against this massive contribution from nature stands motivated human intelligence-—the kind of motivated human intelligence that a free, capitalist society so greatly encourages, with its prospect of earning a substantial personal fortune as the result of almost every significant advance, there can be little doubt as to the outcome: Man will succeed in progressively enlarging the fraction of nature’s contribution that constitutes goods; that is, he will succeed in progressively enlarging the supply of useable, accessible natural resources.

The likelihood of his success is greatly reinforced by two closely related facts: the progressive nature of human knowledge and the progressive nature of capital accumulation in a capitalist society, which, of course, is also a rational as well as a free society.

This fresh contribution enlarges the stock of knowledge transmitted to the next generation, which in turn then makes its own fresh contribution to knowledge, and so on, with no fixed limit to the accumulation of knowledge short of the attainment of omniscience.

The larger stock of capital goods accumulated in any generation on the foundation of a sufficiently low degree of time preference and thus correspondingly high degree of saving and provision for the future, together with a continuing high productivity of capital goods based on the foundation of advancing scientific and technological knowledge, serves to produce not only a larger and better supply of consumers’ goods but also a comparably enlarged and better supply of capital goods.

The result is continuing capital accumulation, on the basis of which, from generation to generation, man is able to confront nature in possession of growing powers of physical command over it.

I turn now to the second aspect of Menger’s theory of goods that relates to the critique of the essential tenets of environmentalism, namely, his view of the process of production as one of continuous enhancement of utility as it moves from goods of higher order to goods of lower order.

All that it is necessary to add to Menger’s view is recognition once again of the fact that the earth is an immense ball of solidly packed chemical elements.

Now these chemical elements constitute man’s external material surroundings, i.e., his environment.

They are the external material conditions of human life.

All of them represent the rearrangement of nature’s elements in a way that makes them stand in a more useful relationship to human life and well-being.

Thus, all of economic activity has as its sole purpose the improvement of the environment-—it aims exclusively at the improvement of the external, material conditions of human life.

When the environmentalists speak of “harm to the environment” in connection with such things as clearing jungles, blasting rock formations, or the loss of this or that plant or animal species of no known or foreseeable value to man, what they actually mean in the last analysis is the loss of the alleged intrinsic values constituted by such things, and not any actual loss whatever to man.

And, of course, to secure their voluntary consent, their cooperation must be made worth their while.

Thus, for example, if I wish to construct a building, not only will I benefit from it, but also all those who work for me in its construction and all those who supply me with materials and equipment for constructing it.

The major complaints the environmentalists currently make concern the fact that I heat and air-condition my building-—to be sure, not I as one isolated individual, but as one of many tens or hundreds of millions of individuals using fossil fuels or CFCs.

In so doing, mankind is allegedly guilty of the crime of increasing the level of carbon dioxide and other greenhouse gases, thereby causing “global warming,” or increasing the level of ozone-destroying molecules in the upper atmosphere, thereby causing higher rates of skin cancer.

If an individual, or an individual business enterprise, is incapable by himself of causing global warming or ozone depletion, or whatever, on a scale sufficient to cause harm to any other specific individual or individuals, then there is absolutely no proper basis on the individualistic philosophy of von Mises for prohibiting his action.

As I say in Capitalism, “To prohibit the action of an individual in such a case is to hold him responsible for something for which he is simply not in fact responsible.

Once we see matters in this light, it becomes clear what the appropriate response is to such environmental change, whether global warming and ozone depletion, or global cooling and ozone enrichment, or anything else nature may bring.

They are ready to throw it all away because, they allege, it causes global warming and ozone depletion, i.e., bad weather.

Even if global warming turned out to be a fact, the free citizens of an industrial civilization would have no great difficulty in coping with it-—that is, of course, if their ability to use energy and to produce is not crippled by the environmental movement and by government controls otherwise inspired.

The seeming difficulties of coping with global warming, or any other large-scale change, arise only when the problem is viewed from the perspective of government central planners.

It would be too great a problem for government bureaucrats to handle.

But it would certainly not be too great a problem for tens and hundreds of millions of free, thinking individuals living under capitalism to solve.

It would be solved by means of each individual being free to decide how best to cope with the particular aspects of global warming that affected him.

Individuals would decide, on the basis of profit-and-loss calculations, what changes they needed to make in their businesses and in their personal lives, in order best to adjust to the situation.

They would decide where it was now relatively more desirable to own land, locate farms and businesses, and live and work, and where it was relatively less desirable, and what new comparative advantages each location had for the production of which goods.

Factories, stores, and houses all need replacement sooner or later.

In the face of a change in the relative desirability of different locations, the pattern of replacement would be different.

The essential thing they would require is the freedom to serve their self-interests by buying land and moving their businesses to the areas rendered relatively more attractive, and the freedom to seek employment and buy or rent housing in those areas.

Given this freedom, the totality of the problem would be overcome.

This is because, under capitalism, the actions of the individuals, and the thinking and planning behind those actions, are coordinated and harmonized by the price system (as many former central planners of Eastern Europe and the former Soviet Union have come to learn).

As a result, the problem would be solved in exactly the same way that tens and hundreds of millions of free individuals have solved much greater problems, such as redesigning the economic system to deal with the replacement of the horse by the automobile, the settlement of the American West, and the release of the far greater part of the labor of the economic system from agriculture to industry (pp. 88-89).

A rational response to the possibility of large-scale environmental change is to establish the economic freedom of individuals to deal with it, if and when it comes.

Capitalism and the free market are the essential means of doing this, not paralyzing government controls and “environmentalism.”

And both in the establishment of economic freedom and in every other major aspect of the response to environmentalism, the philosophy of Ludwig von Mises and Carl Menger must lead the way.

* George Reisman, Ph.D. is Professor of Economics at Pepperdine University’s Graziadio School of Business and Management and is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996).

See his Mises.org Daily Articles Archive or send him MAIL.

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