Saving the Environment through Markets

One of the main reasons I support markets is because I love the beauty of nature.  I’m a hiker, a mountain climber, a kayaker, a horseman.  I grew up on the ocean and love the salty air.

When looking at environmentalism, the simple fact is that markets, because they are profit-oriented encourage conservation.  This seems counter-intuitive, because many in the environmentalist movement argue that profit causes pollution, but that doesn’t pass the sniff test.  Resources have to be used to make goods and services.  Resources cost money.  For a firm, every bit of resource not used costs them money, and in turn, profit.  For example, imagine a metalworking firm that shapes steel.  In the process of shaping steel, the firm shaves off bits.  Over the course of the week, the shavings amount to a pound.  As of this writing, steel prices are $324.80 per pound (West Coast).  That means the firm gives up $324.80 in profit per day, or $118,552 per year!  A firm that is truly profit-oriented looks to reduce waste in order to keep that profit.

Check out this chart that shows what I just talked about:

IN-2015-economic-freedom-and-energy-chart-1

The crux of the argument that markets cause pollution and waste because they are profit-oriented doesn’t hold up to a basic examination.  The argument would need to be that market participants have a greater contempt for the environment than desire for profits.

Another thing to keep in mind is that, according to the WHO, the most deaths from pollution globally do not come from outdoor, but rather indoor pollution.  Indoor pollution comes around because affordable forms of mass energy production (ie fossil fuels), are not available in much of the world.  By promoting fossil fuels in the 3rd World, we can prevent these deaths.

While we’re talking on fossil fuels, it bares reminding that, currently, “green” energy sources (solar, wind, geothermal, biofuels) remain highly expensive and inefficient.  Hell, most people in the 1st World can’t afford it, never mind the poorest of the poor in the 3rd World!  Western environmentalism is a rich man’s game.  In order to help the planet, we need to make the world wealthier, and that means markets.

2 thoughts on “Saving the Environment through Markets

  1. At $324.80 a pound for steel, ain’t nobody throwing out steel shavings. They are being collected and sold as scrap at the very least.

    There were bad old days of industrialization, and that is undeniable; however, with increased awareness and scrutiny polluters have gone the way you say, and become much more environmentally sound in their practices.

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  2. The motivation on the left… I think… is that, it is their wisdom that should choose what “good” comes from the activities of man. And since their skill is politics, they see government as the source of goodness. Only government.
    It is very difficult to list the activities of free men by their intentions to do great things. Their benefit to society is so large it becomes like water to fish and also difficult to list. It was just the progress of time that allows cooking without smoke and dirt. You can’t point to a single thing that made cooking clean.
    But when asked to list the benefit to society of government, it is very easy because what is so memorable are intentions; often in just a single sentence or even a single word or acronym. It is impossible to describe them by their results even if they are good. But when the result of government intervention (into the market place) has a bad result it is because the economic actors in avoiding the intervention, are the ones that appear to be the bad guys.

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