Monday, November 29, 2004

Faking It

Beloit College biology professor Yaffa Grossman is teaching a class this semester called Environmental Sustainability. Their main book is Nature’s Services: a collection of essays edited by Stanford professor Gretchen C. Daily. Scanning the list of contributors yields other famous stasists: Paul R. Ehrlich and Stephen H. Schneider. Since I’ll be speaking to the class about free market environmentalism, I decided to take a closer look at the work.

Not surprisingly, Nature’s Services is built on economic fallacies. While it tries to incorporate economic ideas (most notably the idea that people make decisions on the margin) it fails to take into account fundamental economic realities. Unfortunately, this is hardly the exception in the environmental debate.

One of the worst problems is how the book approaches value. Over and over again the authors claim that because nature provides services necessary for human life, then the natural world has infinite value. First, that’s simply wrong. If we look at other goods required for human life—food, water and shelter—we discover that people don’t assign them an infinite value. Their prices are most definitely finite. Moreover, declaring certain aspects of the natural world has infinite value sets a dangerous precedent: if these things are boundless in their significance, then they are worth any price. Loss of property, jobs and even human life become justified because it’s for the “greater good.” The authors defy one of the fundamental principles of economics: there are always opportunity costs. Deciding to ignore these costs deny the people the authors are trying to protect things the public needs.

The authors also have a nasty habit of being to sure of themselves without having any real evidence. Yes, they are experts in their field and I believe them when they say that the environment provides us with things we don’t always see in ways we don’t always understand but they also claim to be experts on everything else because they say “it would be difficult today for even the most optimistic rates of innovation and of adoption of improved technology (broadly defined) to offset the rates of increase in human disruption caused by rapid population growth and increases in per-capita impacts.”

How on earth could they possibly know that?

Like nature itself, knowledge is disperse and filled with complexities and intricacies we don’t always see or comprehend. How could a group of scientists from one field possibly declare with such certainty that we’ve—as a society—reached the apex of human progress? They can’t; no one can. Especially because it’s also wrong; the rate of technological progress is increasing, not decreasing, and for every mind that’s added, our capacity to reach farther increases. There’s no hard evidence that technological improvements won’t change our world. Arguments like this are based on conjecture and unimaginative doubt.

The role of incentives is similarly ignored. Their solution, they say, is to get all the interested parties involved—governments, companies, environmentalists, engineers and so forth—to value the services nature provides (which is weird because apparently their value is infinite; I guess that’s the problem with an assembly of essays instead of making a comprehensive book). They don’t say, however, how they will get all of these people to work together and why they would gather to talk about this. They touch on the idea of making this monitoring system an international government agency, but that, of course, has its own problems.

Furthermore, there’s little to no mention of private property in the book, which would solve the problems of incentives, opportunity costs and knowledge.

I really wish that people who want to use economics in their analysis would actually use economics in their analysis and not throw some in just to make their claims seem more viable.

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