TT`s Lost in Tokyo : cordato

More stupid from Tierney; this time on "Kuznets curve" and the dynamics of "wealthier and greener"

TokyoTom — Mon, 11 May 2009 18:28:00 GMT

UK jury approves damage to power plant in defense of a commons/ other private property; libertarians and conservatives freak out

TokyoTom — Fri, 12 Sep 2008 01:32:00 GMT

See this surprising decision in the UK , letting climate-change protesters/trespassers off the hook for damages resulting from spray-painting a coal plant smokestack, on the grounds that a UK law "allows damage to be caused to property to prevent...(read more)

Does Cordato favor carbon taxes? McKitrick's "innovative carbon tax proposal"

TokyoTom — Mon, 10 Dec 2007 08:11:00 GMT

[Snark level - medium]

[update below]

Austrian economist Roy Cordato is playing at collectivism by bringing favorable attention to Ross McKitrick's "T3" carbon tax proposal on Cordato's blog, Environment NC (hosted by the John Locke Foundation, where he is Vice President for Research & Resident Scholar).

Says Dr. Cordato:

"Canadian economist/statistician Ross McKitrick has a good article in the Christian Science Monitor describing his innovative carbon tax proposal. The tax is tied to actual temperatures as measured in the tropical troposphere. It is an interesting approach in that it does not involve betting on the science coming from either side of debate."

McKitrick raised his intriguing carbon tax idea six months ago at the Financial Post.

Steve McIntyre put the proposal up at the Climate Audit blog - in a post which is apparently still open for comment. This tax was discussed on ealier on the Mises blog here . Some comments by yours truly litter both sites.

I'm not sure Dr. Cordato fully understands what he is up to - give the misanthropic enviros, "alternative energy" rent-seekers and their political gatekeepers an inch, and they're guaranteed to take a mile. If McKitrick's idea gets any play at all, it's probably to the effect that, despite his criticism of some scientific work, McKitrick thinks that climate change IS something to be taken seriously and that TAXES are an appropriate policy tool.

Dr. Cordato seems determined to help move the Overton Window further in the direction of the Warmers. Is he intentionally yielding ground?

[update:

I note that Austrians who oppose environmental measures that involve the coercive machnery of the state would probably dismiss such measures as "faux environmentalism". Here, the T3 proposal of McKitrick and favorably commented on by Dr. Cordato is an example of such "faux environmentalism". I guess that makes ME the "faux environmentalist" for drawing our dear readers' attention to Dr. Cordato's post. My humble apologies!]

Sophomoric optimism?

TokyoTom — Mon, 15 Oct 2007 14:39:00 GMT

Jon Bostwick agrees on another post that "Man is clever but not wise ("homo sapiens" is a misnomer)", but further comments (emphasis added):

"True. But humanity is wise. Men create cultures, economies and law.

"Man's flaw is that he is over confident of his own intelligence. He tries to control things he doesn't understand, like culture, economies, and law.

"You have just made an excellent case for why government involvement will not improve the environment. Because governments, like man, are not wise."

http://mises.org/Community/blogs/tokyotom/archive/2007/10/12/libertarian-reticience-other-than-to-bash-enviros.aspx

This is too simple, as well as self-contradictory. Humanity is wise because he collectively (but non-deliberately?) creates "cultures, economies and law" (let's not forget governments), but individuals are foolish when they seek to use institutions to achieve particular purposes?

Our states are merely one subset of the wide universe of formal and informal institutions through which we cooperate with one another. States are not a market, to be sure, but then neither are corporations, and there is a spectrum of ownership types between the two. We can study all of these institutions and use that knowledge to direct how we make use of them. Such study has informed, for example, the deliberate shifts in policy that have led to the ongoing (yet incomplete) privatization of the former USSR and of China.

A study of institutions governing common pool resources by guru Elinor Ostrom makes the following point:

"Whether people are able to self-organize and manage CPRs also depends on the broader social setting within which they work. National governments can help or hinder local self-organization. "Higher" levels of government can facilitate the assembly of users of a CPR in organizational meetings, provide information that helps identify the problem and possible solutions, and legitimize and help enforce agreements reached by local users. National governments can at times, however, hinder local self-organization by defending rights that lead to overuse or maintaining that the state has ultimate control over resources without actually monitoring and enforcing existing regulations.

"Participants are more likely to adopt effective rules in macro-regimes that facilitate their efforts than in regimes that ignore resource problems entirely or that presume that central authorities must make all decisions.If local authority is not formally recognized by larger regimes, it is difficult for users to establish enforceable rules. "

Elinor Ostrom et al., Revisiting the Commons: Local Lessons, Global Challenges, Science, 04/09/99 http://conservationcommons.org/media/document/docu-wyycyz.pdf

Was von Mises foolish to suggest we can use the state to reform our institutions?

“It is true that where a considerable part of the costs incurred are external costs from the point of view of the acting individuals or firms, the economic calculation established by them is manifestly defective and their results deceptive. But this is not the outcome of alleged deficiencies inherent in the system of private ownership of the means of production. It is on the contrary a consequence of loopholes left in this system. It could be removed by a reform of the laws concerning liability for damages inflicted and by rescinding the institutional barriers preventing the full operation of private ownership.”

http://mises.org/humanaction/chap23sec6.asp

And Cordato, for suggesting that Austrians take particular policy approaches to environmental issues?

"For Austrians then, public policy in the area of the environment must focus on resolving these conflicts over the use of resources that define pollution, not on obtaining an ultimately unobtainable "efficient" allocation of resources. ... For Austrians, whose goal is to resolve conflicts, the focus is on clarifying titles to property and rights enforcement.

http://mises.org/story/1760

Sorry, but I cannot believe that we are condemned always to repeat all mistakes, despite our rather constant human nature. Rather, as Yandle notes, our very history as a species is about our success in evolving, devising and adopting ways to manage shared problems. http://www.fee.org/publications/the-freeman/article.asp?aid=4064

This is a message of profound optimism, not cynicism --- said the fool.

Cordato summarizes Austrian environmentalism

TokyoTom — Thu, 11 Oct 2007 20:55:00 GMT

Roy Cordato has cogently summarized his views and the work of his Austrian colleagues here: http://mises.org/story/1760. Thoughts on what this framework implies for modern issues are welcome.

Below are some favorite excerpts, with emphasis added:

"Austrian economics lacks a formalized, self-conscious theory of environmental economics. But in fact all of the major elements of such a theory already exist and in that sense what is needed is to piece together the relevant aspects of Austrian economics in order to draw out and focus a theory that is already there. ... In developing an Austrian theory of environmental economics, very little new theoretical ground will be plowed. But by bringing together Austrian concepts of costs and the praxeological foundations of economics we discover a unique perspective on pollution and the role of property rights in solving environmental problems. Furthermore by placing environmental problems within the context of personal and interpersonal plan formulation, we discover that they are not about the environment per se but about the resolution of human conflict."

"The concept of social costs, as typically invoked, completely disembodies and impersonalizes costs. ... The "social cost" approach to environmental economics has led to the "dehumanization" of issues related to the environment [where] [p]ollution or "tragedy of the commons" problems are not problems because of the damage that some people may or may not be inflicting on others, but because they create what amounts to disembodied harms. A problem occurs because some goods are "overproduced" while other goods are "underproduced." In its more extreme form this has led to a separation of the concepts of costs and harm from human beings completely, substituting notions such as "costs to the environment," and damage to the ecosystem."

"Economic analysis of the environment that starts from a praxeological perspective shifts the focus from maximizing the social value of output or equating price to marginal social cost, to efficient intra- and inter-personal plan formulation and execution, i.e., the internal consistency between the means that people use and the ends that they desire to achieve. Within this context, pollution problems that are indeed problems create an interpersonal conflict over the use of means and therefore obstruct efficient plan formulation and execution. Pollution is therefore not about harming the environment but about human conflict over the use of physical resources."

"Humans cannot harm the environment. Instead, they can change the environment in such a way that it harms others who might be planning to use it for conflicting purposes."

"The focus of the Austrian approach to environmental economics is conflict resolution. The purpose of focusing on issues related to property rights is to describe the source of the conflict and to identify possible ways of resolving it."

"If a pollution problem exists then its solution must be found in either a clearer definition of property rights to the relevant resources or in the stricter enforcement of rights that already exist. This has been the approach taken to environmental problems by nearly all Austrians who have addressed these kinds of issues (see Mises 1998; Rothbard 1982; Lewin 1982; Cordato 1997). This shifts the perspective on pollution from one of "market failure" where the free market is seen as failing to generate an efficient outcome, to legal failure where the market process is prevented from proceeding efficiently because the necessary institutional framework, clearly defined and enforced property rights, is not in place."

"The starting point for all Austrian welfare economics is the goal seeking individual and the ability of actors to formulate and execute plans within the context of their goals. Furthermore, in all three approaches, social welfare or efficiency problems arise because of interpersonal conflict. onflict, that similarly cannot be resolved by the market process, gives rise to catallactic inefficiency by preventing useful information from being captured by prices. … A theory of environmental economics and pollution that evolves from problems associated with human conflict then would be a natural implication of each of these welfare standards."

"rresolvable inefficiencies, i.e., inefficiencies that cannot find a solution in the entrepreneurial workings of the market process, arise because of institutional defects associated with the lack of clearly defined or well enforced property rights. In a setting where rights are clearly defined and strictly enforced, plans may conflict but the resolution to that conflict is embedded in the exchange process. … In the absence of clearly defined and strictly enforced property rights this process breaks down and the conflict becomes irresolvable through the market process. Under … Austrian approaches to welfare economics, therefore, the solution to pollution problems, defined as a conflict over the use of resources, is to be found in either clearly defining or more diligently enforcing property rights."

"e have integrated the Austrian focus on the actor’s means-ends framework, including its emphasis on the subjective nature of value and therefore costs, with the definition of what constitutes an environmental problem. By defining such problems in these terms, both the nature of pollution and the definition of a polluter take on new meaning. Environmental problems are brought to light as striking at the heart of the efficiency problem as typically seen by Austrians, that is, they generate human conflict and disrupt inter- and intra-personal plan formulation and execution."

"[T]he Austrian approach to solving pollution problems may face implementation problems at the margin, i.e., with certain "tough cases," defining and enforcing property rights already stands as the fundamental way in which interpersonal conflicts of all kinds are avoided or dealt with. …This is not to suggest that the clear definition of property rights is an easily achievable goal in all situations. It is not. But, while the Austrian approach to solving pollution problems may face implementation problems at the margin, i.e., with certain "tough cases," defining and enforcing property rights already stands as the fundamental way in which interpersonal conflicts of all kinds are avoided or dealt with. This approach is clearly operational as it has been in operation, to one extent or another, throughout human history. The challenge for Austrians is to explain how we apply the theory in certain tough cases, not to explain, in reality, how it can be applied at all.”

-- Okay - this sounds like a productive framework for approaching environmental issues.

But on tough cases, let's start off by hating the enviro-nazi watermelons (green on the outside, red on the inside) and by letting them know exactly what we think about them. Not because that is productive, but because it satisfies other visceral needs. Besides, we can always rationalize that the best form of progress is stalemate, while various parts of the global environment are trashed.

Right?

Environmental Markets? Links to Austrians

TokyoTom — Tue, 02 Oct 2007 13:34:00 GMT

Here's a partial list of useful articles, alphabetically by author:

Terry L. Anderson and J. Bishop Grewell
Property Rights Solutions for the Global Commons: Bottom-Up or Top-Down?
http://www.law.duke.edu/shell/cite.pl?10+Duke+Envtl.+L.+&+Pol'y+F.+73+pdf

H. Barnett and Bruce Yandle
The End of the Externality Revolution
http://mises.org/Journals/Scholar/Barnett.Pdf

Walter Block
Environmentalism and Economic Freedom: the Case for Private Property Rights
http://mises.org/Etexts/Environfreedom.Pdf

Robert W. McGee and Walter E. Block
Pollution Trading Permits as a Form of Market Socialism and the Search for a Real Market Solution to Environmental Pollution
http://www.walterblock.com/publications/pollution_trading_permits.pdf

John Bratland
Toward a Calculational Theory and Policy of Intergenerational Sustainability
http://mises.org/Journals/Qjae/Pdf/Qjae9_2_2.Pdf

Roy E. Cordato
Toward An Austrian Theory of Environmental Economics
http://mises.org/journals/qjae/pdf/qjae7_1_1.pdf

The Common Law Approach to Pollution Prevention; a Roundtable Discussion (1997) ( Hope Babcock, Elizabeth Brubaker, David Schoenbrod, Bruce Yandle, Michael Krauss )
http://www.Cei.org/Pdf/1353.Pdf

Peter J. Hill

Market-Based Environmentalism and the Free Market; they're Not the Same
http://www.independent.org/Pdf/Tir/Tir_01_3_Hill.Pdf

Murray N. Rothbard
Law, Property Rights, and Air Pollution
http://mises.org/Rothbard/Lawproperty.Pdf

Fred L. Smith Jr
The Bankruptcy of Collectivist Environmental Policy
http://www.Cei.org/Pdf/3238.Pdf

Fred L. Smith, Jr.
Eco-Socialism: Threat to Liberty around the World
http://www.Cei.org/Pdf/3818.Pdf

Robert J. Smith
Resolving the Tragedy of the Commons by Creating Private Property Rights in Wildlife
http://www.cato.org/pubs/journal/cj1n2-1.html

Ludwig von Mises
"The Limits of Property Rights and the Problems of External Costs and External Economies", in Human Action
http://mises.org/humanaction/chap23sec6.asp

Bruce Yandle
Coase, Pigou, and Environmental Rights
http://www.environnement-propriete.org/english/documentation/doc/Coase_Pigou_and_Environmental_Rights_Bruce_Yandle.pdf

Bruce Yandle
The Commons: Tragedy or Triumph?