Privatising the atmosphere

Jeremy Waldron

  • Beyond the New Right: Markets, Government and the Common Environment by John Gray
    Routledge, 195 pp, £19.99, June 1993, ISBN 0 415 09297 3

By instinct and by reputation, environmentalists tend to be socialists. They are hostile to private industry, they scorn the profit motive, and they are profoundly suspicious of any claim that societies work best when economic decisions are made in the medium of unregulated markets. By emphasising the dire consequences for the environment of unrestrained industry, they present themselves as champions of big government, large regulative agencies and strict legal controls.

At the same time, environmentalists are having to come to terms with the fact that the greatest ecological depredations of our age are the achievement, not of corporate capitalism in the West, but of government, big government, indeed explicitly socialist government in the former Soviet Union. Terms like ‘ecocide’ and ‘ecological apocalypse’ are not too strong to describe the legacy of Soviet industry and agriculture. Whole lakes and inland seas have dried up, while others are oozing with plutonium. The seabeds are littered with discarded reactors from nuclear submarines. In Soviet Central Asia, over-grazing and over-fertilisation have created a massive dust-bowl, with deserts advancing from the Caspian Sea in the direction of the southern Ukraine. In some Russian cities, air pollution levels are fifty times the official limit. There has been a significant decline in life expectancy, and in many areas health indicators have collapsed to Third World levels or worse.

The thesis of John Gray’s new book is that Green movements in the West have yet to come to terms with the implications of the socialist environmental disaster, and that when they do, they will turn naturally to ideas associated with the conservative defence of free markets, forging a synthesis from which both sides – conservatives as well as environmentalists – can profit. Gray has been associated for a long time with the intellectual think-tanks of the New Right in Britain and America, and parts of his argument amount to business as usual from a conservative ideologue: a stiff lecture to socialist dupes on the virtues of markets and perils of central planning, and a brisk evisceration of the idea of social justice. He is, after all, the author of works on J.S. Mill and F.A. Hayek. Yet, though it addresses the collapse of the socialist economies, Beyond the New Right is certainly not the usual ‘I told you so’ of capitalist triumphalism. On the contrary, it seizes the opportunity provided by ecological reflections to reconsider much of what has been most distinctive about conservative ideology in Thatcher’s Britain and Reagan’s America.

Gray’s analysis of the Soviet catastrophe begins conventionally. He insists that there is nothing contingent or accidental about the environmental depredations in the former Soviet Union. They are no more an aberrant accompaniment of socialism than the familiar evils of political oppression; they were not caused by Russian backwardness or bureaucratic error. Environmental catastrophe, he argues, is exactly what one should expect from an industrialised economy which fails to establish property rights in ecologically sensitive means of production. If no one in particular owns the land, the mines, the factories or the forests, then there will be no one to take specific responsibility for the environmental impact of economic decisions, no one with a reason to gather information about the long-term effects of industrial or agricultural processes, and no one with an incentive to act on that information even where it exists. The situation becomes a ‘tragedy of the commons’, differing from Garret Hardin’s classic representation of that predicament only in the fact that the impulse to over-exploit common resources derives from the output targets of central planning as well as from the more familiar imperatives of self-interest.

In principle, the problem can be solved by privatisation. The trick is to give the person who makes decisions about the use of a resource (a piece of land, for example) property rights in that resource, so that he knows his own economic interests will be affected directly by what he does. A farmer who owns the land he uses is less likely to overgraze it, for it is his pocketbook that will suffer if the pasture turns to desert.

Gray’s enthusiasm for this solution is qualified, however, by his recognition that many environmental problems involve externalities – effects of one person’s decisions on resources owned by another or held in common by all – and by his acknowledgment that we cannot always internalise these externalities by privatisation. The sulphurous emissions of my privately-owned factory are likely to fall as acid rain on someone else’s land and forests; and unless legal rules and incentives are changed, I will be as cavalier about those emissions as any Stalinist manager. We cannot privatise the atmosphere or give out property rights in the prevailing winds: the air is going to remain a commons, perpetually liable to the tragedy of the commons, no matter how robust our market institutions are on the ground. Gray is well aware of this, and he concedes that there is no alternative in these cases to carefully designed regulation and constraint.

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