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The Essence of Libety



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Liberty knows no compromise


A Condensed Version of For a New Liberty: The Libertarian Manifesto by Murray N. Rothbard

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Compiled by

Dr. Jimmy T. (Gunny) LaBaume

Chapter 13: Conservation, Ecology, and Growth

Liberal Complaints

In the past 3 or 4 decades, left-liberal intellectuals have unleashed a series of angry complaints against the free-market, each of which has been contradictory to one or more of their predecessors. Consider:

1. In the late 1930s and early 40s capitalism was suffering from "secular stagnation" which had been imposed by the slowing down of population growth, the end of the frontier, and the supposed “fact” that no further inventions were possible. This was supposed to spell stagnation, mass unemployment, and (naturally) the need for socialism.

2. During the 1950s the cult of "economic growth" came on the scene. Capitalism was not growing fast enough. Therefore socialism (or government intervention) must force-feed the economy.

3. Then John Kenneth Galbraith, in his The Affluent Society in 1958, charged that capitalism had grown too much. We were too well off and, as a result, had lost our spirituality. Therefore, it was necessary for government intervention or socialism to tax consumers heavily enough to reduce their bloated affluence.

4. The cult of excess affluence was superseded by a contradictory worry about poverty in 1962. Suddenly, the problem was not excessive affluence, but increasing poverty. Once again, the solution was for the government to plan mightily, and tax the wealthy. So, we had the War on Poverty.

5. Then, for two or three years around 1964 we were regaled with the idea that, in a few years, America 's production facilities would be automated and cybernated. Incomes would be enormous but everyone would be automated out of a job. So, once again, free-market capitalism would lead to mass unemployment which could only be stopped by State intervention.

6. By the late 1960's it became clear that the automation hysterics had been dead wrong and we entered our seventh phase of liberal economic flip-flops.

7. Affluence is again excessive and free-market capitalism is growing too fast. In the name of conservation, ecology, and the increasing scarcity of resources state planning (socialism) must bring about a zero-growth society in order to avoid negative growth sometime in the future!

Notice how the liberal answer to all of these contradictory problems has always been the same—socialism or state planning to replace free-market capitalism.

The Attack on Technology and Growth

The fashionable attack on growth and affluence by comfortable upper-class liberals while the mass of the world's population is still living in squalor is truly obscene. It is revealing to note that these upper-class liberals have not made a bonfire with their salary checks.

Their attack on technology is even more irresponsible. If technology were rolled back to the "tribe" era, the result would be mass starvation. This may be a good thing to our fanatical anti-populationists. But for most of us it would indeed be a draconian "final solution."

This amounts to another liberal flip-flop. Thirty-odd years ago they were denouncing capitalism for not putting modern technology to full use in State planning. Yet contradictory liberal thought seems to never completely die. Many of them are also confidently forecasting technological stagnation. This was the technique of pseudoscientific forecasting of the antigrowth Club of Rome Report. The model hypothesizes exponential growth for industrial and agricultural needs but arbitrarily assigns non-exponential limits to technical progress. Two centuries ago Thomas Malthus concluded essentially the same thing—that people multiply exponentially while the food supply increases at a constant rate. He was obviously wrong.

Actually, what we need is more economic growth, better technology and greater capital investment. These will lead to higher living standards, greater material comforts and more leisure to pursue the "spiritual" side of life. People who must work long hours to eke out a subsistence living enjoy very little culture or civilization. The real problem is that productive capital is being siphoned off by taxes, restrictions, and government contracts for unproductive and wasteful projects while the technical expertise of scientists and engineers is being diverted to government. Growth and higher living standards can only be achieved by removing statism and allowing the creative energies of all of the population to be manifest through the free-market.

Conservation of Resources

Liberals claim that "capitalist greed" is destroying our scarce natural resources and predict rapid exhaustion of vital raw materials. This overlooks the role of the free-market in conserving, and adding to, natural resources. For example: consider typical copper mine. Why does the owner not mine all the copper immediately? Why does he conserve? Well, let's say that he decides to triple this year's production. This decision will also deplete the mine and therefore its future income potential. This depletion is, then, immediately reflected in the value of the mine (in the form of the selling price of the shares of stock). The mine owner has to weigh the immediate income he would realize from his decision against the loss in "capital value" of his asset.

The miner's business decisions are determined by expectations of future copper yields and demands, rates of interest, etc. Suppose copper is expected to be rendered obsolete within a few years by a new synthetic. Mine owners will produce more copper now and save less thus benefiting consumers and the economy. But, if a copper shortage is expected, mine owners will produce less now and wait until prices are higher. Thus, the market economy contains a built-in mechanism whereby owner's decisions benefit their own income and wealth while, at the same time benefiting consumers and the economy as a whole.

But there is more to it than that. If a shortage is expected copper will be withheld and saved causing the price to rise. This has a "conserving" effect in that it sends a signal to users who will then conserve and/or substitute cheaper metals or plastics for copper. In addition, the increased cost will stimulate exploration to find new copper ores. In addition, it will prompt a search for less expensive substitutes and stimulate campaigns for saving and recycling. This is the reason why copper (and other natural resources) did not disappear a long time ago.

In fact, natural resource prices have generally declined relative to other prices. This is a sign that natural resources have not been growing scarcer but more abundant. The development of cheap substitutes has played a large role in keeping natural resources cheap and abundant. In the same way, we can expect technology to develop a cheap source of energy before the supply is exhausted.

Technology and industrial production actually create resources. For example, before the automobile and the kerosene lamp, petroleum was not a resource but an unwanted waste. In other words it was the development of modern industry that converted it into a useful resource. Along those same lines, technology has been finding new petroleum reserves at a rapid rate.

It is true that several resources have suffered from depletion. But the reason is not "capitalist greed." In each case the failure can be traced to government failing to allow private property in the resource.

Timber resources are a classic example. Most of the forests in the West are owned by the federal government who leases their use to private companies. In other words, private property is permitted only in the annual use, not in the resource itself. The private company does not own the capital value of the resource. Therefore it does not have to worry about its depletion. Thus, it has no economic incentive to conserve. To the contrary, the incentive is to cut as many trees as quickly as possible. Where private property is allowed in the forest itself, the owner benefits from preserving and restoring the resource so as to avoid depletion of its capital value. Thus the major culprit is the degradation of Western forests is uS Forest Service.

Another classic example government's failure at resource conservation is the destruction of the Western grasslands. "Open range" was the failure of the government to adjust its homesteading policy to the different conditions of the drier climate west of the Mississippi . In the East, 160 acres was a viable economic unit for farming. But in the dry West, no cattle or sheep ranch could subsist on a mere 160 acres. So "open range" meant that no one owned the pasture land itself. Therefore it was to the advantage of every livestock owner to use up the grass as quickly as possible; otherwise it would be grazed by some other livestock owner. The result was overgrazing.

There is another important area in which the absence of private property is not only causing depletion of the resource but also a failure to develop the vast potential of that resource. This is the case of the ocean resource. Oceans are in the international public domain. In other words, no one has any sort of property rights in the resource. As a result, the oceans have remained in the same primitive state that land was in during in the pre-civilized days before agriculture when primitive man lived by "hunting-and-gathering." He just lived off the land without attempting to remold it. As a result, the land was unproductive and would support only a few tribesmen at a subsistence level. Only with the development of agriculture did productivity and living standards increase to a level which allowed civilization to begin. The development of agriculture would never have occurred had it not been for private property rights.

The oceans are still in the primitive hunting and gathering stage. No one can farm them and if anyone tried others could (and would) rush in and seize his product. There is no economic incentive (in fact, there is a disincentive) for technological research into increasing the productivity of fisheries or in extracting the mineral resources from the oceans. But, if private property in the oceans was allowed, aquaculture would create and multiply ocean resources in ways we cannot even imagine.

National governments have placed irrational and uneconomic restrictions on such things as the size of the catch and length of the season. Such restrictions have kept technological methods of fishing primitive and have done nothing to stimulate the growth of aquaculture. Fishermen are poor because they are forced to use inefficient equipment and to fish only a small fraction of the time. Also there are far too many of them. Furthermore, the consumer pays a higher price than he would if efficient methods were used.

The root of the problem lies in non-ownership. Perpetuation is not in the interests of individual fisherman. Instead, his interests are to catch as many fish as he can during the season. All this is unnecessary because private property rights in the oceans are feasible given modern electronic sensing equipment.

Nations assert their sovereignty 200 miles from their shores. This has resulted in growing international conflict. Private companies and governments squabble and war over the same areas of the ocean. As all of this continues, property rights become increasingly more important.

Pollution

Once again, liberals assert that the source of aggravated pollution is unchecked "capitalist greed." Well, it is a fact that government ownership has not been a solution to the problem. In fact, the two crucial areas in which pollution is most severe (the air and the waterways) are two areas in which government does not allow private property to function.

Rivers (and the oceans) are generally owned by government and complete private property is not permitted in the water. But government ownership is not true ownership because the officials who control the resource cannot reap its capital value. Hence, there is no incentive to preserve its value. What if private firms owned the rivers and the lakes? Anyone dumping garbage in the water would be sued, forced to pay damages and made to cease and desist from further aggression. Since there are no full private property rights in these waters, there is no owner to defend the resource.

No only has the government “owner” allowed pollution of rivers and lakes, it has also been their single largest polluter. This especially applies to its role as municipal sewage disposer. Who is going to invest in a chemical toilet when governments will dispose of sewage free? If government permits water pollution, then industrial technology will become a water-polluting technology.

What about air pollution? Can there be private property in the air? Yes. Just as radio and TV frequencies can be privately owned, so could channels for airlines. But in the case of air pollution we are dealing with protecting private property in one's lungs, fields, and orchards. The polluter sends pollutants through the air into the lungs of innocent victims and onto their property. This constitutes aggression just as much as arson does. The major function of government (its courts and police) is to stop aggression. It has failed to do this.

This failure has not been from ignorance or a time lag between recognizing a new problem and solving it. The bad effects of factory smoke have been known since the Industrial Revolution. The courts, during the 19 th century, deliberately decided to allow property rights to be violated by industrial smoke. Before that time air pollution was considered a tort, a nuisance against which the victim could sue. But the courts altered the law to permit pollution that was not unusually greater than any similar firm. The judges said, in effect, “there is something more important than property rights and that is public policy of the 'common good.'”

Legislatures then got in on the act by prohibiting victims from filing "class action" suits. If there are tens of thousands of victims, it is impractical for each victim to sue. But a class action suit is one in which one or a few victims can sue the aggressor on their own behalf and also on behalf of the entire class of similar victims.

Noise is a form of air pollution against which a libertarian legal system would permit suits and injunctions.

Pro-pollution defenders of industrial progress point to the increased costs of such things as converting our present polluting technology—costs that would have to be borne by the consumer. This argument is analogous to the one against the abolition of slavery because it would add to the costs of growing cotton. Therefore, although it would be morally correct, it was "impractical." This argument also overlooks the fact that if air pollution is allowed to continue unpunished there is no economic incentive to develop a technology that will not pollute. In fact, the government gave the green light to a polluting technology from the start. No wonder this is the technology we have. The only remedy is to force the invaders to stop which would redirect technology into a nonpolluting type. In this way, the costs of the non -polluting technology would "ultimately be borne by the consumers who choose to associate with the firm instead of being passed off onto innocent third parties in the form of pollution (or taxes).

Conservatives offer two similar responses. One is to deny that the problem exists. This is to deny science itself and give hostage to the leftist charge that defenders of capitalism "place property rights above human rights."

Their second response is to concede the existence of air pollution but propose to meet it, not by a defense of property rights, but by a "cost-benefit" calculation by government, which will then make a "social decision" on how much to allow.

This would be enforced either by licensing a certain amount, taxing it, or by paying firms not to pollute. This proposal would give an enormous amount of power to the government bureaucracy. They would continue to override property rights in the name of a collective decision enforced by the State.

Milton Freedom, a primary proponent of this “solution,” once issued a grotesque dictum that those urban inhabitants who don't wish to contract emphysema should move to the country. This is in the same vein as the typically conservative, "Love it or leave it"— a statement that implies that the government rightly owns the entire land area of "here," and that anyone who objects to its rule must therefore leave the area.

Laissez-faire without rights is a contradiction in terms. The laissez-faire position is derived from man's rights and can endure only when rights are held inviolable. So, a laissez-faire polluter is a contradiction in terms. A libertarian society would be a full-liability society, where everyone is fully responsible for his actions and any harmful consequences they might cause.

In sum, in addition to failing at its primary function of defending private property, government has actually contributed to pollution.

Rothbard sums it up best: “Thus, when we peel away the confusions and the unsound philosophy of the modern ecologists, we find an important bedrock case against the existing system; but the case turns out to be not against capitalism, private property, growth, or technology per se. It is a case against government for its failure to allow and to defend the rights of private property against invasion. If property rights were to be defended fully, against private and governmental invasion alike, we would find here, as in other areas of our economy and society, that private enterprise and modern technology would come to mankind not as a curse but as its salvation.”

Continue to the next chapter...


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