Objections to the Simple Libertarian Argument for Environmental Regulation

By On October 1, 2011 · 38 Comments · In Current Events, Libertarianism

As I mentioned in a previous post, there’s a simple argument, consistent with hard-core deontological, self-ownership libertarian principles, that gets you to the conclusion it’s at least permissible for the government to issue environmental regulations.

Here it is, in a more straightforward form:
1. Start with minimal state libertarianism: Government may and should protect rights, when it can at a reasonable cost.
2. Make a claim about rights: Pollution and many other kinds of activities that damage the environment impose externalities upon others and in doing so violate their (negative) rights to life, health, and property.
3. Make a claim about government efficacy: Government regulation is at least some times pretty effective at protecting these rights, and it does a better job than using courts.

This gets us pretty close to the conclusion that the government should be empowered to issue environmental regulations to protect the very rights libertarians claim we have. Yet, here are some objections:

A. The Mission Creep/Abuse Objection: Though 3 is true, if we give government the power to enforce the rights mentioned in 2 through environmental regulation, government will abuse and misuse this power. It will misuse/abuse it so much that it won’t be worth it. It’s better just to leave things to courts, and if that doesn’t work, just let people pollute.

B. The Cost-Benefit Objection: While government is sometimes effective at enforcing rights, cost-benefit analysis shows that the EPA and other such agencies, even when acting without abuse and in good faith, spend/cost far too much for every year of life saved. Against, it’s better just to leave things to courts or even just let people pollute.

C. Other Unintended Consequences Objection: Allowing government to try to solve the problem causes various other negative consequences, and isn’t worth the cost.

D. The Market Can Fix It Objection: There are some market-based (e.g., Coasian) means to solve these problems.

Having been thoroughly schooled in public choice and all the usual stuff, I see the point behind A-D. There’s significant truth behind each of these objections. However, if you’re one of those libertarians who believes the government should issue no environmental regulations (and many libertarians do believe this), you seem to me to be far too pessimistic about A-C and/or optimistic about D. Do the facts really turn out to imply that the optimal amount of government environmental regulation is none?

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  • Hyena

    A-C are all arguments for why we should take institutional design seriously. A lot of libertarian arguments take place in the context of American government and society; to the extent that libertarians come up with “best not to do anything about it” as a solution, I submit that Americans would make poor libertarians. Higher trust cultures, for example, can more easily implement government solutions because they seem less prone to abuse and can rely far more on extremely subtle social norms to regulate officials rather than hoping the letter of the law doesn’t contain surprises.

    Objection D is laughable. Embracing Coasian solutions generally means that brutal murders become an acceptable “free market outcome” properly understood as an unfortunate breakdown in negotiation caused by mutual miscalculation.

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  • Anonymous

    Jason,

     

    I have been working on just such issues; that is issues
    about how to understand that status of pollution (and other minor infringements
    such as in soft-paternalism cases) in a deontological natural self-ownership
    rights framework (Nozick, Hospers, Rothbard, and Railton also have thought
    about this issue). I guess I think more important than issues of gov’t
    regulation is that if pollution is a rights infringement, and if rights
    infringements are normatively a very big deal, then it is difficult to see how
    fires or most of industry can be permissible as these involve infringing rights
    without the consent of those people who are hit with the pollutants. That is,
    given your premises it seems to me the most exciting conclusion in the
    neighborhood is that even not very toxic pollution is typically impermissible
    as it will typically infringe on the rights of people who have not consented. I
    have been working on how the friend of self-ownership might respond to this. I
    take Nozick’s own main response to be “cross and compensate”, that is, to make
    it permissible for one to cross other people’s boundaries provided they receive
    compensation that makes them no worse off by their own lights. This seems a
    very serious backing away from self-ownership to me, but it helps against the problem
    here. In the end, however, Nozick’s move seems to me insufficient. 

    • Anonymous

      David,
      What follows below only relates to Nozick. I will let the defenders of other libertarians such as Rothbard speak for them. First, as described in my book “Nozick’s Libertarian Project: An Elaboration and Defense,” it is a major mistake to classify Nozick as working within a “self-ownership rights framework.” While this is a common error, it has been debunked previously by such theorists as Leif Wenar, David Gordon, John Hasnas, and others. My book simply goes into more detail in outlining his actual derivation of libertarian rights.

      Second, although you don’t fully elaborate what you mean by “cross and compensate,” I am skeptical that it adequately describes Nozick’s views on pollution, especially your reference to “by their own lights.” Nozick actualy has something quite specific to say about the regulation of pollution, at ASU pp. 79-80. There he writes:

      “Since it would exclude too much to forbid all polluting activities, how might a society (socialist or capitalist) decide which polluting activities to forbid and which to permit? Presumably is should permit those polluting activities whose benefits are greater than their costs, including within their costs their polluting effects. The most feasible theoretical test of this net benefit is whether those who benefit from it wouild be willing to pay enough to cover the costs of compensating those affected by it…A society must have some way to determine whether the benefits do outweigh the costs. Secondly, it must decide how the costs are to be allocated. It can let them fall where they happen to fall…Or it can place it on those who happen to benefit from the activity…The last, if feasible, seems fairest.”

      How does your “cross and compensate” analysis fit in with what Nozick actually says on this topic? The passage just quoted indicates to me a willingness to engage in cost/benefit analysis, and in my book I argue that this approach is consistent with his actual derivation of individal rights–one based on respect for persons as rational agents in the Kantian sense.

  • Anonymous

    That is an instance of Nozick using cross and compensate. The boundaries of a person’s property rights are permissibly infringed upon here so long as the person whose boundary is crossed is compensated so that they are no worse off by their own lights. Nozick is explicit about the compensation needing to be adequate by the person’s own lights. He writes, p. 63, “full compensation keeps the victim on as high an indifference curve as he would occupy if the other person hadn’t crossed.”

    • Anonymous

      One of the reasons I wrote my book is that in delving into the literature I found that time after time Nozick’s ideological opponents would misconstrue his views in the most unfavorable light possible, then attack him for the positions they wrongfully attributed to him. Important examples are his derivation of rights, his theory of original appropriation and his framework for utopia. Thus, pardon the perhaps testy nature of this reply, but you seem intent on joining this club.

      The passage you quote is Nozick describing the view he is about to reject. He continues on the next page (64), “Allowing boundary crossing provided only that full compensation is paid ‘solves’ the problem of distributing the benefits of voluntary exchange in an unfair and arbitrary manner.” He continues on p.65: “The best method to discover this price, of course, is to let the negotiations actually take place and see what the upshot is. Any other procedure would be highly inaccurate, as well as incrediably cumbersome.”  Much more needs to be said here, but I don’t have the time right now.

      • http://www.sandiego.edu/~mzwolinski Matt Zwolinski

        Mark,
        I think the interpretive issues here are complicated enough that reasonable people can disagree. And can do so, I would hope, in a polite and charitable way.

        Both the passages you cite and the one David cites come very early in a long discussion of the problem how to deal with risk from a libertarian perspective . And Nozick, in typically Nozickian fashion, doesn’t solve it. What he does, it seems to me, is discuss some possible solutions, point out the problems with them, and then move on. Allowing activities that pose the risk of a boundary crossing so long as compensation is made has, he thinks, a number of moral and practical problems associated with it. But so does always flatly prohibiting the risk of boundary crossings (see the section David cites in his most recent post). Well, if we don’t always prohibit risky activity, we must sometimes permit it, and then our options are to demand compensation or not. Nozick doesn’t say how to deal with this issue in general, but note that he *does* set forth a “principle of compensation” that allows us to prohibit individuals from engaging in risky activity (and by so doing infringe upon their rights) so long as we compensate them for this infringement. So that looks an awful lot like the kind of cross-and-compensate policy David referred to.

        • Anonymous

          Yes, as you well know, he does set forth a principle of compensation that he seeks to apply to a narrow range of cases, i.e. those ”types of actions [that] are generally done, play an important role in people’s lives, and are not forbidden to a person without seriously disadvantaging him.” (ASU, 81). As you also know, libertarian theorists (Barnett, Rothbard, Childs, etc.) rejected this principle, with very good reasons, almost since ASU’s date of publication. Thus, if we are to deal with risk in a way that is both plausible and sympathetic to Nozick’s core principles, we must find a substitute for his principle of compensation.

  • Anonymous

    Mark,

    I encourage you to just make your points without the trash talking flourishes. 

    Nozick does reject unrestricted cross and compensate for a variety of reasons, none of them in my opinion good. But he clearly embraces a limited version of cross and compensate (see “Why not always prohibit?” which starts on p. 71). 

    Eric Mack, for example, interprets Nozick as I do. I think you should take the interpretation I offer seriously in its own right and not assume it is merely designed to make Nozick look bad.

    I would think any version of cost/benefit analysis that we attribute to Nozick had better not amount to permitting us to sacrifice the one for the sake of others–something Nozick clearly rules out. Cross and compensate has a real claim to not permitting this as, plausibly, one is not sacrificed if one finds oneself no worse off for the exchange. 

    Obviously we should not take over the thread that Jason started so this will be the last thing I say until Jason joins the discussion

    • Anonymous

      In your initial comment you say:

      “I take Nozick’s own main response to be “cross and compensate”, that is, to makeit permissible for one to cross other people’s boundaries provided they receivecompensation that makes them no worse off by their own lights. This seems avery serious backing away from self-ownership to me, but it helps against the problemhere. In the end, however, Nozick’s move seems to me insufficient.”

      Here, you suggest that I not assume that your interpretation ”is merely designed to make Nozick look bad.”  But, in light of your earlier comment I am struggling to see how you are suggesting something that is sympathetic to his core principles. Have you considered other ways that Nozick might address the problems of dealing with externalities and risk, such as an endorsement of cost/benefit analysis for purposes of determining the existence of a right, but not its stringency?

      • Anonymous

        Care to explain why you think this?

        • Anonymous

          I’m sorry, what does “this” refer to?

          • Anonymous

            “But, in light of your earlier comment I am struggling to see how you are suggesting something that is sympathetic to his core principles.”

          • Anonymous

            In the language that I quoted immediately above, you state that “cross and compensate” is “insufficient.” Thus, I understand you to be saying that the best position Nozick can take on externalities, consistent with his fundamental understanding of rights, is inadequate. Before reaching such a pessimistic conclusion regarding another philosopher’s work, I think we are obligated to explore other interpretations of his views that do not produce such flawed results.

            If we understand (as I think we must) Nozick’s derivation of rights as resting on Kantian notions of respect for persons, it is pretty easy to see how he can consistently hold that my rights are not violated when a single molecule of pollution enters my lungs on a nonconsensual basis, and how rights are violated when someone builds an unsafe nuclear reactor in a residential neighborhood, even though no boundary has yet been crossed. In my opinion, this is a sympathetic reading of Nozick.

          • Anonymous

            In my view nothing is easy when we try to derive rights from a Kantian notion of respect. But more importantly, I think reading around the strong presupposition of morally basic property rights in Nozick makes too much of what he is up to hard to understand. The Kantian stuff is designed primarily, in my view, to explain why the rights have a deontological structure, not to derive their content. In my view, unless we see Nozick as starting from within a broadly self-ownership/Lockean tradition, the view we end up with may be better but it will not be Nozickian.

          • http://www.sandiego.edu/~mzwolinski Matt Zwolinski

            You’re certainly right about the “nothing is easy” point. However, I agree with Mark that Nozick himself took the Kantian ideas to ground not just the structure but the content of libertarian rights:
            “The root idea, namely, that there are different individuals with separate lives and so no one may be sacrificed for others, underlies the existence of moral side constraints, but it also, I believe, leads to a libertarian side constraint that prohibits aggression against another…Thus we have a promising sketch of an argument from moral form to moral content: the form of morality includes F (moral side constraints); the best explanation of morality’s being F is p (a strong statement of the distinctness of individuals); and from p follows a particular moral content, namely, the libertarian constraint.”

            I’ve discussed this argument at a bit greater length in a paper on the separateness of persons, here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1097402.

          • Anonymous

            Matt,

             

            Excellent! That shows that some of what I said above is just
            wrong. Nozick apparently conceives of the Kantian story as more foundational
            than I thought and that certainly helps along Mark’s case that if the
            self-ownership story does not pan out, charity might suggest focusing on what
            Nozick took to be the basis of self-ownership. The passage you remind us of is
            very thought provoking and will require new thinking on my part but let me say
            a few things now. First, I look forward to reading your paper. I still think
            that Nozick thinks the content of the rights is self-ownershipy (really, “cross
            and compensatey”), and a lot of Nozick’s preoccupations make sense only under
            that assumption. Suppose that is granted. Then, if we agree the cross and compensate
            story is unpromising for interesting and non-obvious reasons, it is not clear
            to me what charity to Nozick recommends. 
            I have satisfied myself that Kantian derivations of rights are
            unpromising.  But more than that, it
            feels to me like reading around all of Nozick’s classical liberal stuff in the
            name of making his view closer to the true Kantian view makes Nozick into a
            minor figure. That because he, I would say, is not most impressive in the early
            chapter explication of how a specific set of rights flows from Kantian notions
            of not using or the separateness of persons, even if that is his aspiration.

             

            I guess I see the issue like this. Set aside Nozick for
            moment and imagine an unnamed philosopher who takes X to be the fundamental
            thing and for X to justify a view like Y. Then suppose this philosopher is
            unprecentedly impressive in working out the best Y-type view, but significantly
            less impressive (but still impressive) in explaining why X is the fundamental
            thing and how X generates specific content. Then suppose that Y turns out to
            not pan out, but that X remains a sensible option. If it were me (and this is
            wildly wishful thinking), I would very much hope people remember me as the guy
            who was amazingly impressive and intellectually honest in working out the
            details and problems with Y rather than the guy who made pregnant but
            underdeveloped remarks in the X tradition.

          • http://www.sandiego.edu/~mzwolinski Matt Zwolinski

            Agree with most of what you say here, but this –

            Excellent! That shows that some of what I said above is just
            wrong.

            Is why I love philosophers.  :-)

          • Anonymous

            Yes, the passage quoted by Matt, ASU, 33-4, is very hard for those interpreting Nozick as adopting the self-ownership thesis (or other derivation of rights) to explain away IMHO. I would also draw attention to pp. 48-51, where he tries to answer the question he poses to himself: “in virtue of precisely what characteristics of persons are there moral constraints on how they may treat each other or be treated?”

  • Anonymous

    Quickly violating my own policy, let me say first thanks for that Matt. And secondly, while I admit that Nozick is not as clear as could be here, I see his “principle of compensation” as related to but different from and narrower than “cross and compensate”. I don’t see, for example, how the principle would provide all the help we need in pollution cases and so I think Nozick is best understood to be endorsing a limited version of cross and compensate in addition to his principle of compensation (which only applies when we forbid people to engage in risky activity). I take us to need some way to make not very toxic pollution permissible and I think Nozick agrees with that thought, and I see cross and compensate as the only route he offers that has real hope to vindicate that result (in addition to the textual evidence Mark quoted above). But as Matt says, Nozick tries out ideas freely and does not always say which parts of his discussion count as his final view.

    • http://www.sandiego.edu/~mzwolinski Matt Zwolinski

      Agreed; the principle of compensation looks like the application of cross and compensate to a special kind of crossing (the prohibition of risky activities).  I suspect that the kind of reasoning that would lead one to endorse PoC would also lead one to endorse CaC in other contexts, but they’re certainly distinguishable.  Nozick never explicitly endorses CoC as a general approach to risky activity, but I’m inclined to agree that it’s the most promising approach he discusses.

      • Anonymous

        Let me politely dissent from your last sentence. I believe cross and compensate, at least as I understand it, has the fatal flaw of assuming that there is some way of determining after the fact the amount of compensation that would have made the rights-holder indifferent between the boundary crossing w/compensation and the absence of the boundary crossing. As argued in my book, I  believe Nozick has better options open to him, consistent with his fundamental derivation of rights, than this.

  • C Cruz

    Most would agree that Anarcho-capitalists are excessively pessimistic about A-C while excessively optimistic about D.  Most would also agree that socialists are excessively optimistic about A-C while excessively pessimistic about D.  Here’s a bell curve diagram I created to depict just such a continuum…
    http://pragmatarianism.blogspot.com/2010/11/libertarian-spectrum-diagrams.html

    It would be a huge oversight to talk about the scope of government without mentioning Herbert Spencer’s awesome and entertaining historical perspective on the duties of the state.  At the end of my blog entry on absurdity-spotting I shared his comment… http://pragmatarianism.blogspot.com/2010/12/can-you-spot-absurdity.html

    What’s truly absurd is a system that averages our perspectives.  Summing our perspectives will facilitate the integration of a gazillion bits of public goods information that will lead to an incredibly more optimal outcome.  It’s perfectly fine for some to say that the EPA is absurd just like it’s perfectly fine for others to say that the EPA is essential.  It’s also perfectly fine for both sides to debate the topic but at the end of the day people should be able to analyze the results and directly fund the government organizations that they believe are essential.  We all have different values and would be willing to bear greater costs to support the things that we value.

    A division of labor between taxpayers will reveal the perfect division of labor between the private and public sectors.  Just like we look back and realize how absurd it was that one king had sole discretion over tax allocation we’ll look back and realize just how absurd it was that 535 congresspeople had sole discretion over tax allocation.  It’s been nearly 1000 years since the Magna Carta was signed and it’s high time to take the next logical step.

    • Anonymous

      The problem with this idea on anything but a small scale is that the voter is not made responsible for their choice.  Suppose I choose not to eat today.  My body will soon send me feedback that this choice is problematic, and I will eventually die if I don’t change my course of action.

      In a nation of 300 million people my direct vote has such little impact that I receive no feedback by it.  Suppose that I vote zero dollars for police and national defense.  If everyone voted as I did society would quickly collapse.  But assuming others vote more reasonably, I am free to cast extreme, unreasonable ballots without getting the feedback I would were I to make poor choices as a market consumer.

      • C Cruz

        The difference between consumers and taxpayers is that taxpayers would not have a choice whether they paid taxes.  If a taxpayer did not allocate their taxes to defense then they would have to allocate their taxes to infrastructure, education, public healthcare, the EPA, etc.   Or they could just give all their taxes to congress.

        Each government organization website would have a fundraising progress bar and taxpayers could pay their taxes directly to the various government organizations at anytime throughout the year.  

        It’s already been well established that planned economies fail and will always fail yet we use planners rather than the invisible hand to decide how public goods should be allocated.  Public goods are no different than private goods once we correct for the free-rider problem (force people to pay taxes).  

        It’s mind boggling that so many libertarians realize that the invisible hand is infinitely more efficient at allocating private goods yet all have focused on kicking various public goods over to the private sector while none have even vaguely considered the implications of applying the invisible hand to the public sector.  http://pragmatarianism.blogspot.com/2011/08/if-door-says-pullwhy-are-you-pushing.html

        Incidentally, at the end of this tax allocation survey I created http://pragmatarianism.blogspot.com/2011/08/survey.html there are some links to threads where people have shared their allocation pie charts.  

        • Anonymous

          Suppose I love classical music, and allocate 100% of my taxes to the symphony.  Or I’m a farmer, and put 100% on farm subsidies.

          You are not going to make voters pay the price for extreme votes by giving them a different basket of services than those that vote more responsibly.  At least elected representatives can face the loss of their jobs for their votes.

          You are going to create a game of chicken where the first one to abandon the pet cause and the narrow interest to fund something like police or bridge repair that is needed but unsexy loses.

          In a limited government state where you are requiring the individual to meet all of their own needs, they are going to face the consequences of poor decisions in allocating their resources, or reap the rewards of good ones.  I don’t necessarily favor that system, and think it would give way to either private city/states that are run similar to our currenty government or some other feudal-like form.  But the system you describe doesn’t offer the feedback to the individual voter.  In fact, it probably offers them less feedback than electing representatives, since that vote does tend to impact people’s lives at least a little.

          • C Cruz

            If you looked at the surveys that people filled out it’s fairly rare that anybody allocated 100% of their taxes to one single public good.  

            Besides, the invisible hand is self-regulating.  It’s fine that you love classical music but if you get mugged then you’re probably going to allocate some of your taxes to the police.  

            Planners have statistics on muggings but they have no idea how many symphonies you would be willing to forgo in order to try and prevent future muggings.  

            Every individual considering the opportunity costs of their tax allocation decisions will lead to a far more optimal outcome.  

        • Anonymous

          You seem to think that the reverse problem of free-riding doesn’t exist. Even with the option to direct what is taxes how do you get around the forced carrying problem — that is people paying for public goods at a greater price than they actually value them at?

          • C Cruz

            You seem to think that if we subject government organizations to survival of the fittest that the forced carrying problem will still continue to exist.  Just how many government organizations do you think are going to survive having market principles applied to them?  

          • Anonymous

            That’s an irrelevant question. I’m not suggesting that government be organized as a market or markets be organized as government.

          • C Cruz

            I completely understand why you’re not suggesting that markets be organized as government but I’m not sure why you aren’t suggesting that governments be organized as markets.  

            You seem to care about the forced-carrying problem.  But if you applied free-market principles to government then you wouldn’t be carrying government inefficiency and you wouldn’t be carrying public goods that you did not value.  

            You’d only be paying for efficiently produced public goods that you valued.  

  • Fernando Teson

    I agree, Jason. The libertarian position cannot be that the optimal amount of environmental regulation is none. But that is still compatible with saying that ALL existing environmental regulations are bad. Again: saying that there is an ideal regulation R that will solve environmental problem E does not entail that we should empower the government to regulate, because it is likely that the government will screw up.

  • Anonymous

    I think we can at least make a pretty good case that a genuine free market would result in less pollution, less waste of resources and lower CO2 emissions than our present regulatory regime. 

    Bear in mind that tort liability is not the only libertarian weapon against such corporate malfeasance.  Before we even worry about questions of negative reinforcement like tort action vs. regulatory penalties,  we should attack things at the front end and stop actual state subsidies.  No more foreign policy aimed at guaranteeing access to foreign oil reserves.  No more subsidizing every step in the nuclear power production chain from building roads to uranium mines on public land to waste disposal.  All construction and expansion of highways and airports to be funded entirely by user fees like weight-distance tolls on trucks.  No more use of eminent domain for highways and airports.

  • http://twitter.com/VelizCF CFV

    Concerning D., I think we should carefully distinguish between the so-called “free market enviromentalism” and, for example, views that promote the design of marketable pollution rights or permits.

    Some libertarians believe that that kind of secondary market is better in efficiency terms than Pigouvian taxes. But I am unable to see exactly why, because both Pigouvian taxes and pollution rights are exposed the same kind of public choice illness (i.e. capture of the regulator by special interest groups; in the case of marketable pollution rights, capture of whoever decides the global amount of pollution we will tolerate).

  • Anonymous

    Just wondering what “regulations” means. Does it mean some preventative measure, such as checking if your vehicle will pollute before you are allowed to drive?
    Or is it the enforcement of the existing law after pollution has occurred, e.i. compensating those that were affected.

    In any case there is at least one other argument (apart from arguments against regulation in general):
    E. Dependency and crowding out of legal action.
    If people become dependent on the government for preventative measures they will not pursue legal action against polluters as much as otherwise and they will not develop better institutions to deal with this problem through property rights.

    In any case the government has to decide what the punishment for polluting is.

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  • http://blog.monstuff.com Julien Couvreur

    “Do the facts really turn out to imply that the optimal amount of government environmental regulation is none?”

    Define optimal. What social utility or welfare function are you implying?
    Optimality is a convenient scientific approach for finding the best solution while dodging subjective valuation. Unfortunately, the choice of the objective function to be maximized is itself a subjective valuation.
    So to talk about what is “better”, one cannot avoid resorting to value and ethics.

  • hastanebul

    My life is not over. Not sure jigolo
    if this would be a drama or a comedy. . . .
    Good Grape: What super-power would you most like to have, and why?