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Tuesday, March 12, 2013

Property and the Environment

I am in a world which is in me.

— Paul Valery

What are the implications of privately owned property for the world in which we live? In order to demonstrate the pragmatic significance of the principle being developed herein, it might be helpful to focus on one issue that, more than most others, has attracted the attention of thoughtful men and women. Using the environment as an example, how would human behavior differ if decision-making were diffused among each of us as property owners, rather than concentrated in the hands of those who exercise political power? What differences might we observe between social systems premised on private ownership rather than collectivism?
Protecting the environment has become a major concern in our world, perhaps reflecting Marshall McLuhan’s prognosis that the space program, by allowing us to see Earth from space, would cause us to think of the planet as an object, which we would then want to manage and protect.1 His prognostication seems to have been born out, perhaps bringing Descartes’ “mind/body” dualistic thinking into the space age. By treating the planet as an object, environmental thinking has helped separate mankind from the earth, thus creating a state of conflict between humans and the rest of nature.
There is a legitimate concern for the question of how to address the problem of people dumping their entropic wastes into waterways, the atmosphere, and unowned lands. How does a private property analysis help us with instances of individuals, corporations, or governmental bodies polluting the air or rivers, or dumping toxic wastes that get into underground water supplies and cause injury or death to others? We need to ask ourselves whether the self-interested actions of private owners of property, dealing with one another in the marketplace, can prevent such problems.
In an age that has rediscovered the importance of mankind living in harmony with nature, it is often difficult to speak of the importance of decentralizing authority in society by decentralizing control over property. The fear is often expressed that, if men and women were free to do with their property as they saw fit, not only would social conflict escalate—as though society could become even more violent and disorderly—but that nature itself would be subjected to far greater dangers than at present. While these are worthwhile concerns, such fears reflect a total misconception of what is implicit in the decision making of a property owner.
To begin with, we must carefully define the nature of the problem. Using the pollution of waterways as an example, it is not the fact that industrial wastes get put into the water that creates the problem, but the fact that the water in question is generally not owned by the polluter. If, for instance, a manufacturer has built a totally enclosed lake on its land—with a thick, steel enforced concrete bottom to prevent seepage—and the manufacturer pollutes its own lake with sludge, would any injury to others have occurred? To those environmentalists who do not see these issues in any coherent, philosophically principled way, the response may be that there has been a “wrong” done to the water itself. But unless we are prepared to admit other species, trees, waterways, rock formations, the atmosphere, and the rest of nature into that body of legally recognized “persons”, a position that would pose serious problems in our efforts to foster our own survival, such arguments will amount to little more than empty tautologies. But if we apply a property analysis to the question, we can make clear distinctions between injurious and noninjurious acts.
The environmental problems with which so many people concern themselves represent not the failure of private ownership of property, but the failure to live in accordance with such a system by identifying and respecting claims. Landfill problems, the dumping of nuclear or other toxic wastes, the emission of smoke and chemical particulates into the atmosphere have, for the most part, been occasioned either by the absence of private ownership, or the refusal to have one’s actions governed by such a principle. Who does own the air and waterways, the marshlands and forests, the oceans, mountain ranges, and aquifers? Who is entitled to make decisions as to how these resources are to be utilized, and for what purposes? Are there limits to the range of one’s actions and, if so, how are these to be determined? Furthermore, unless one is so innocent as to believe that his or her preferences, alone, are entitled to the respect of reasonably minded people, it must be understood that whether a parcel of land is to be used for the growing of organic vegetables or as a dumpsite for radioactive wastes, is a question that must be answered by someone.
Because entropy is a form of energy unavailable for productive use, many of us are inclined to dispose of it in as cost-free a manner as possible. The pollution problem arises from a willingness of the polluter to regard dumping it upon the property of others, rather than his own, as his efficient means of reducing this cost. In Prigogine’s and Stenger’s model of “dissipative structures”, wherein living systems are able to generate a more complex order by dissipating entropy into the environment,2the crucial property issue is raised: into whose environment is the entropy to be dispelled?
Most of us operate from the assumption that social order is to be defined in terms of whether the behavior of others is conducive to our ends. As the “war on drugs” and other campaigns against victimless crime activities illustrate, such inquiries rarely distinguish between actions that cause identifiable harm to others, and those that simply annoy our sensibilities or fail to satisfy the expectations we unilaterally project onto others. It is no surprise that such an assumption finds expression in environmental matters. If we can become aware that our values are only subjective preferences, rather than objective standards, and if we can appreciate the orderly patterns that inhere in complex systems, we may become less self-righteous about the decisions others make for themselves.
If trees are cut down, for instance, orderliness is generated in the paper upon which people may write, and in the lumber used to build houses. Likewise, if trees are not cut down, the ecological orderliness of the forest will be maintained. Whose preferences should prevail, and upon what principles will the making of either choice depend? No matter how strongly we insist upon the primacy of our preferences, no matter how much moral foot-stomping we engage in, the fact remains that our choices are grounded in subjectivity. There are no objectively “correct” decisions to be made, but as with all human action, there are cost and benefit tradeoffs associated with whatever choices we make. But who is to incur the costs, and who is to enjoy the benefits of human action? It is the private property principle, alone, that allows each of us to pursue our respective preferences, as well as to enjoy the benefits and bear the costs thereof. Through voluntary exchanges in the marketplace, each of us is free to increase the intensity of our demand for one form of usage over another and, thus, try to persuade other owners—through the pricing system—to respond to our preferences.
There are, of course, significant consequences associated with the questions of how, and by whom, decisions regarding property are to be made. Because they will have to bear the costs of the choices they make, owners of property, operating on the basis of the property principle, will be required to take into consideration different factors in their decision making than will non-owners. Owners will always have a more diligent and focused concern regarding their property than will non-owners making decisions over the property of others. Such resources as forests, lakes, mountains, and marshlands are capable of being bounded and controlled by exclusive owners. To the degree such private ownership is established, the owners will have an incentive to protect their value by not allowing their property to be damaged, whether by themselves or others. Such property becomes a producer of resources for future productive use, and self-interest motivations can be relied upon to maximize both present and future benefits to be derived therefrom. The common practice of farmers rotating their crops in order to protect the soil, and of lumbering companies replanting trees on their lands provide such examples. Should one choose to become an owner of land with the intention of preserving its undeveloped character, the property principle would support that decision as well.
But to the degree any of these resources are not capable of being privately owned (e.g., an entire river or river system, the ocean, or the atmosphere), and/or have been collectively claimed by the state on behalf of the “public,” (e.g., national parks and forests), confusion of ownership will result. As we shall see in chapter nine, belief in the idea of a collective ownership in unowned or state owned property gives rise to implicit assumptions about the personal use of such resources. If I should think of myself as one of a multitude of co-owners of a major river, or the atmosphere, or forest land, why wouldn’t I be inclined to regard it as being within my collective “rights” to use such resources for whatever purposes served my interests? To proclaim collective ownership creates, in the mind of a listener, the mistaken assumption that he or she is an owner and, thereby, entitled to control the property for their purposes. As with so many other examples of state action, this practice generates unintended consequences that are often contradictory to their stated purposes.
The confusion of control brought about by the idea of collective ownership, has been a major contributor not only to environmental problems, but to the conflicts that necessarily arise whenever government agencies act to further policies about which there is widespread disagreement among men and women who like to imagine that such entities are “theirs” to direct. Isn’t this confusion what has turned government schools into attractors for conflict over whether such schools will or will not employ bilingual education, or teach sex education, or teach creationism rather than Darwinism—a confusion that tends not to arise in privately owned schools? Whether the redwoods are to be preserved or harvested; whether “public” lands are or are not to be used for nuclear weapons testing or for nuclear waste disposal; what types of radio or television programming are to be permitted on so-called “public airwaves”; whether rivers are to be used for toxic waste disposal, are just a few of the irreconcilable conflicts arising from a commitment to collective ownership.
Given the general confusion as to the nature of property and the widespread disrespect for private property, and given that almost all of us have less of an interest in protecting other people’s property than we do our own, it should come as no surprise that many of us regard the property of others as appropriate sites for the disposal of wastes. Let us suppose that the United Updike Company has dumped toxic wastes into the ground, and emitted noxious fumes from its factory smokestacks. Is it not clear that the company has failed to control its property (i.e., its byproducts) so as to prevent trespasses to others—that it has allowed the range of its decision making to exceed the boundaries of what it owns? If those toxic substances seep into the water supply of the neighboring town, and a child drinks that water and becomes ill, is it not evident that the company committed a trespass upon that child? Likewise, when the fumes from the smokestacks are breathed into the lungs of a young woman, or the toxic wastes that get into a nearby river end up in fish that are later eaten by her, has the company not trespassed upon her?
In a culture in which the nature of privately owned property is neither generally understood nor respected, such polluting practices tend to be referred to as “environmental” or “health” problems. But, in fact, they represent what economists call “externalities”—i.e., the failure of an actor to bear all the costs associated with his or her actions. This company is externalizing—or “socializing”—the costs of disposing of its entropic industrial byproducts by forcing them to be borne by others. An externality, in this context at least, is only an economist’s way of talking about property trespasses, a failure to respect the inviolability of another’s boundaries. The government, largely through its court system, has historically allowed businesses to engage in such trespasses so as to avoid firms having to bear expenses that might be detrimental to them. Such decisions by the courts have helped to confuse our understanding of the orderly nature of a system of private property.
A similar problem arises from what is called “the tragedy of the commons.”3 When grazing lands are owned in common by various sheep farmers, each farmer will have an economic incentive to continue adding sheep to his herd to graze upon such lands. If any one shepherd were to refrain from adding sheep, each party reasons, the others would nevertheless add their sheep, which would work to his comparative disadvantage. As a consequence, each farmer will find it to his self-interest not to restrain his sheep’s consumption of grass, leading to the ultimate destruction of the commons. These dynamics, which are also at work in such unowned areas as oceanic fishing territories, underlie a number of environmental concerns.
While this dilemma is often presented as evidence of the harmful nature of individual liberty, it in fact reflects the adverse consequences of collective ownership: what is owned by everyone is owned by no one. There is no one decision-maker who has both the unfettered control and the responsibility for the property, no single owner upon whom all the consequences of usage will devolve. If such lands were divided into privately owned parcels, no owner would need to fear the over-consumption of his grass by his neighbor’s sheep. When property is privately owned and boundaries are respected, there is no division between those who will incur the costs and those who will enjoy the benefits, a lesson that even small children learn from a reading of The Little Red Hen. Indeed, the “enclosure acts” in England privatized such collective lands for the purpose of resolving this problem.
The owner knows that if he is to continue enjoying the benefits of his property, he must be responsible for the costs of its maintenance, including a self-rationing of his use of it. The property owner makes his own calculations, assesses his own risks, and bears the consequences, be they good or ill. Each farmer will have an incentive to forego immediate consumption and not overgraze because, to do otherwise, will result in long-term costs to himself that outweigh the short-term benefits he would derive. This is why the authority to control one’s own property fosters responsible behavior: the actor experiences the consequences.
This analysis also helps to explain the troublesome nature of political decision-making: those who benefit from political action (e.g., “special interest” groups) do so disproportionately to the costs they incur in promoting such ends. Ironically, this is what politically-oriented conservation and environmental organizations have in common not only with most other lobbying groups, but with private and governmental entities that socialize their costs by imposing them, via pollution, on the general public. All governmental action involves the creation of externalities, in that some people (e.g., taxpayers, property owners) are forced to incur burdens not of their own doing or choice. Like the United Updike Company, conservationists and environmentalists who call upon the state to regulate the property interests of others, receive benefits whose costs they prefer others to bear. The state, like the polluter, is externalizing costs.
We should not be surprised that so many of us find it attractive to divide the enjoyment of benefits from the bearing of costs. Because we are self-interest motivated, we desire to keep our gains for ourselves, just as we are eager to share our losses with others, an attitude that keeps insurance companies in business. There is nothing remarkable in this, nor is there a property violation regarding private insurance, as insureds freely contract, for a fee, for the sharing of risks. But such motivations ought to be kept clearly in mind when assessing the relative merits of any governmental programs. This motivation, when combined with a refusal to adhere to the property principle as a way of limiting the scope of our pursuits, produces a disruptive dichotomy.
This Janus-faced tendency can be illustrated in an example. If X’s neighbor constructs a hideously grotesque shack on his land and paints it chartreuse, X will bring a nuisance action and insist that the neighbor compensate him for any perceived diminution in the market value of his home, even though the neighbor had committed no trespass. If, on the other hand, that same neighbor had built a beautiful mansion that increased the value of X’s property, X will not consider himself obliged to share his gain with the neighbor who made it all possible. X will, instead, content himself with the thought that his good fortune was simply one of the benefits of a free market system!
Likewise, real estate developers and the owners of professional sports franchises have figured out ways to get local governments to use their powers of eminent domain to take, by legal force and at taxpayers’ expense, lands belonging to others, while, at the same time, forcing taxpayers to pay for the construction of facilities such as sports stadiums. When those who reap the benefits of such acts are privileged by the state to pass their costs onto unwilling parties, property trespasses are occurring in every bit the same way as when a manufacturer dumps its unwanted costs onto others in the form of pollution. Were we to learn to think in a principled manner and to become aware of the consequences that are implicit in our behavior, we might discover how government policies we so eagerly impose upon the lives and property of others, can produce troublesome externalities we had not intended.

Boundaries of Order: Private Property as a Social System

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