Pollution and Free Markets

When it all was over
We had to find another place
But Swiss time was running out
It seemed that we would lose the race
--Deep Purple

Rothbard discusses pollution in the context of free markets. People commonly associate pollution with capitalism. Because people act in their own self interest, then negative by-products of their actions that impact other people, such as pollution, are likely to occur. As such, pollution is presumed an unpleasant externality of markets that must be addressed by government.

At the outset, Rothbard astutely observes that government ownership and/or control has not been a proven solution to pollution problems. Two areas of society where private property has not been permitted to function, air and waterways, constitute primary grounds for pollution.

Waterways such as rivers have gone 'unowned,' which permits their corruption and pollution. Moreover, government has been among the most active polluters through the operation of municipal wastewater facilities with capacity to dump sewage into rivers and streams.

Because public waterways are unowned, there are no owners with legal standing to sue polluters for aggression against private property. Owners of small lakes and ponds, of which there are many, would surely exercise their rights to protect their property from such aggression.

Since government permits pollution of water, industrial technology has become a water polluting technology. Regulation stunts, rather than promotes, innovation in water pollution-free production technologies.

Property rights pertain to air pollution as well. Here, the issue is not ownership of air but ownership of one's person and property. The vital fact of air pollution is that the polluter sends unwanted pollutants through the air and into the lungs of innocent victims, and onto their property. Air pollution is an act of aggression against an individual and his/her property.

In free markets, it is the responsibility of government to stop this aggression.

Unfortunately, government has failed at this task. Early in the Industrial Revoluion, injurious air pollution was in fact considered a tort in many communities. Victims could sue for damages and obtain injunctions for polluters to cease and desist further invasions of private property.

In the 19th century, however, courts systematically altered the laws of nuisance and negligence to permit air pollution that was no more extensive than customary practice of fellow polluters. As such, the objective shifted from protecting individuals to the public sphere--i.e., the 'common good.' The common good decreed that pollution and progress were good things, and that property rights were to be overridden on behalf of the general welfare.

It should be evident that pollution is not a by-product of free markets that must be dealt with by government. Instead, pollution is the result of failure to uphold the free market principle of property rights. Indeed, markets can not be free until/unless property rights are upheld.

Until property rights are protected, expect continued pollution and hampered markets for innovations that reduce pollution.