Free Market

Hot Air

The Free Market
Free Market Patrick Weinert

The Free Market 16, no. 9 (September 1998)


When Carol Browner, head of the Environmental Protection Agency, proposed new air quality standards last year, she claimed that thousands of Americans are being killed every year by tiny particles in the air with diameters of less than 2.5 microns. The EPA currently regulates airborne pollutants 10 microns in diameter, so Browner asked to have the agency's powers expanded. Charcoal grills, lawnmowers, and other gasoline-powered equipment could be outlawed when they produce too much pollution.

She admitted she had not read the government studies she cited very carefully, but still announced that "when it comes to protecting our kids, I will not be swayed." The scientific evidence for the EPA's claims was dubious. Lifestyle, diet, and wealth were not included as factors in explaining the increased mortality of the test subjects. An independent study done with a group of Seventh-Day Adventists, for example, showed that there were no increased health risks due to high levels of Particulate Matter 2.5. This group is known to follow "strict dietary and lifestyle regimens." Like much of government science, her studies filtered out explanations that did not support her agenda.

Yet the real damage done by the EPA's claims was not to the methodology of science, but to the free economy. The EPA continues to emphasize the erroneous theory that pollution control is a public good, and therefore only provided efficiently by government. This error is deeply entrenched.

Statists have long charged that laissez-faire capitalism was incapable of controlling man-made pollution. Historians pack American textbooks with the "evils" of the Industrial Revolution, ragged women and children working slavishly in congested, smoke-filled cities. Millions are shown going to their deaths in coal mines and textile factories, with the little savings each accumulated quickly being pocketed by factory owners. For example, Christine Rider of St. John's University writes that "the old 19th-century industrial towns never became beautiful...for so long as coal was the predominant power source towns were dirty, smoky, and polluted."

Environmentalists frequently credit the Clean Air Act of 1970 with saving the United States from ecological catastrophe. It forced automakers to reduce car emissions, power plants to install smokestack "scrubbers," hospitals to stop incinerating medical wastes. This is a gross perversion of real history. Not only did the free market dramatically reduce pollution on its own, but the Clean Air Act was only successful at producing a cloud of regulatory red tape.

Of course living conditions are better today than a century ago. But by charging that the market was the cause of pollution, socialists make a polluted accusation. As Ludwig von Mises argued, the problem was not the absence of government regulation, but a lack in savings and investment. For so long as the capital base of a society was primitive, the means to deal with various societal problems would remain limited. Mises writes: "In the first decades of the Industrial Revolution the standard of living of the factory workers was shockingly bad when compared with the contemporary conditions of the upper classes. It is deplorable that such conditions existed. But if one wants to blame those responsible, one must not blame the factory owners who --driven by selfishness, of course, and not by 'altruism'--did all they could to eradicate the evils. What had caused these evils was the economic order of the precapitalist era."

Similarly in our times, air pollution was being reduced in the United States decades before any federal regulations were adopted. From 1950 until 1970, the amount of volatile organic compounds and carbon monoxide in the nation's air fell by more than 20 percent, even though total vehicle-miles traveled in the country rose by 120 percent, from 458 billion to 1.1 trillion. The level of sulfur dioxide in the air began falling as far back as 1920, and the total amount of airborne particulate matter has been reduced by 79 percent since 1940.

Much of this was achieved through increased fuel efficiency in automobiles, consumer adoption of oil and natural gas for the heating of homes, and the introduction of new energy sources such as nuclear and solar power. Entrepreneurs, in their desire to attain the highest yield of energy per unit of resource, were voluntarily reducing air pollution at a dramatic rate.

Yet government economic planners were not pleased with society's progress. In another usurpation of property rights, government forced businesses and consumers to cut back even further on emissions, to reduce the use of specific energy resources, and to cease at numerous other activities. Even today, the left continues to profess the Clean Air Act as society's environmental savior. Yet after almost 30 years of regulating, the EPA is unable to produce evidence that its efforts have independently improved air quality.

The agency did not even make an attempt to justify its activities until Congress demanded it in 1990, but even then the data was incomplete and questionable. In an interesting way, this demonstrates Mises's argument on the futility of socialism, since without economic calculation there is no way to define an increase in total utility.

The Clean Air Act has definitely contributed to the impoverishment of society, however, as all regulatory legislation does. By setting a universal standard for businesses and consumers, government distorted market incentives and created a superfluous discovery process in which the reduction of emissions was sought for its own sake, regardless of the consequences.

Some examples:

In 1994, under threat of lawsuit, the EPA forced the Pennsylvania state legislature to spend $145 million of taxpayers' money on the construction of 86 automobile emissions test centers. Later that same year, EPA officials realized that the project was a mistake, but forced the legislature to buy the empty buildings nonetheless.

In 1996 the EPA demanded that citizens in Salmon, Idaho close down the town's two sawdust-burning heaters and replace them with propane heaters at a price of $750,000. Seeing a rural population of only 3,100 in the town with most airborne pollutants consisting of road dust and pollen, the EPA was more successful at cleaning out the Salmonites' bank accounts than at cleaning their air.

During the summer of 1995, due to new federal limits placed on power plant emissions, utility companies in Chicago were forced to raise their prices for electricity. Over 700 residents of the city perished in their apartments from dehydration and heat stroke, many of whom had air conditioners but could not afford to turn them on.

Government standards for air quality have not only threatened the health of American citizens, they have actually increased public exposure to pollutants. Air conditioning provides not just cool air, but cleaner air, as well. The fine particles that the EPA wants to regulate are actually filtered out by air conditioning. The average citizen spends 90 percent of his time indoors. The quality of indoor air is much more important to human health than outdoor air. The 70 percent of Americans with air conditioning benefit from far less exposure to fine particles because of air conditioning's filtering capacity. But if the EPA is forcing the cost of electricity higher through decrees for pollution abatement, it is exposing more citizens to the very outdoor air pollution it wants to protect them from, since higher costs will make consumers less likely to use their air conditioners.

By attempting to control pollution with arbitrary standards, government prevents entrepreneurs from employing resources efficiently. If federal regulators really desire fresh air, then they need to take a fresh approach: repeal the Clean Air Act, permit pollution disputes to be settled through tort lawsuits, and allow entrepreneurs in the free market to continue seeking pollution reduction through efficient resource allocation.


Patrick Weinert lives in Harrisburg, Pennsylvania, and is a fellow with the Tenth Amendment Institute. 

FURTHER READING: Michael Fumento, Polluted Science (Washington, D.C.: American Enterprise Institute, 1997); John Merline, "How Deadly is Air Pollution?" Consumers' Research (February 1997); Ludwig von Mises, Human Action (New Haven, Conn.: Yale University Press, 1949).



Weinert, Patrick. "Hot Air." The Free Market 16, no. 9 (September 1998).

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