WEBVTT

NOTE Free Market Environmentalism, 1980s

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Part of the book's title is what?

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The book's title is

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Economics and the Environment, a Reconciliation

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Okay

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And in it, I guess you state, I haven't read the book, sorry

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But you state that you believe that the government should get out of the regulation game

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and let, I guess, industry monitor itself?

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Well, no, that's not exactly it, although I can see why people might say that

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The way I see it, and as out of the book I suppose I speak on behalf of the book

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is that the government is guilty of two wrongs, sins of omission and sins of commission.

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The sins of omission is that in the free enterprise lexicography or in the free enterprise system there is a role for government.

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And the role of government apart from defense and other things is to define and protect private property rights.

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That's one of the most important things that government can do.

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and government has fallen down in that task.

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So not only have they fallen down on the task that they should be doing,

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but instead of doing what they should be doing,

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they are doing things that they shouldn't be doing,

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namely regulating all sorts of things,

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subsidizing burning of fossil fuels

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and subsidizing the nuclear power energy field, for example.

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So it's a combination of both.

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Now, let me illustrate how, first the omission and then the comission.

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It used to be, before the 1830s and 1840s, there would be a spate of lawsuits that now

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we would consider environmental suits, and in those days they would consider them nuisance

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claims.

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And the way they ran was some lady would complain to the court that this manufacturing company

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is getting soot and ash on her laundry. Or some farmer would say that the railroad is

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getting sparks on his haystack. And they would go to court and say, well, you know, this

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manufacturing plan or that railroad is a nuisance. They're violating my property rights, my laundry

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on my haystack, and I would like an injunction to get them to stop it. And pretty much, regularly,

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the courts would grant these things, and that would be the end of the problem. They would

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In the 1830s and 1840s a new philosophy permeated, and this is mainly in the United States and Great Britain and also in Canada,

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where the courts took a very different point of view. They said, well, yes, yes, we admit that your private property rights are being violated,

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but there's something more important than your stinking, sniveling private property rights, and that's the public good.

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What does the public good consist of in their view? Manufacturing and economic progress for which you needed manufacturing.

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So they pretty much gave these people a carte blanche to go and pollute.

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They said, in effect, if we can put it in biblical terms, you know, go thou and pollute, and it costs you nothing.

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Well, when the law of the land is such, people will go and pollute.

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Because suppose that there was an environmentally conscious manufacturer in the 1850s,

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in the 1950s, and he said, well, I believe that pollution is evil, and I shouldn't do

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this to people. We'll have a greenhouse effect in a hundred years, he would say to himself.

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What would happen to him is he'd go broke, because every other competitor would not do

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this, would not be so public-spirited. He would be very public-spirited, and he would

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then take on extra costs for himself that none of his competitors had. So if other things

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If things were equal, he would tend to go broke and no longer be part of the situation.

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As a result of these legal cases, our economic structure of production was shunted from what

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might have otherwise been a non-pollution-intensive mode of technology to a pollution-intensive

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mode of technology, namely there was no incentive to engage in research and development for

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Scrubbers or smoke prevention devices or any attempt to substitute high-grade coal

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which didn't leave as much soot and ash as did low-grade sulfur coal.

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So in all these cases the government by its own mission, by its failure to

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protect private property rights, and even nowadays we don't have

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property rights in the Constitution,

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has unleashed the Pandora's box of environmental problems.

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They should

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get back to square one and start protecting property rights by

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Allowing People to Sue and Get Injunctions

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Is it possible to go back to square one now?

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Well, it might not be feasible easily to go back without some disruptions

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because, you know, if you go for 150 years in the wrong legal system

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you don't solve it in one fell swoop in one day.

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And there are complications and there are interim solutions

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proposed in this book, Economics and the Environment of Reconciliation.

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But I think that that's the direction in which we have to head.

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We have to see the government as committing the sin of omission from which we have to correct it.

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Also, in addition, the government has created plenty of sins of comission,

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which have also messed up the environment.

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Like lobbying groups?

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Well, no, lobbying groups have asked the government to do it, but government has yielded.

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For example, government owns most of the forest lands.

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And the problem with government owning forest lands is that the incentive of the private

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enterprise logging companies who go on to those lands are very different than if they

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own the land themselves.

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See, if you own the land yourself and you clear cut and you don't replant, then the

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present discounted value of your land, which means the future income streams translated

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into value at present, becomes very quickly dissipated and if you do that once too often

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This is why warehouses continually replant.

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impact on your bottom line today.

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Now, in addition to government owning land and thereby encouraging the too quick reduction of the forest resources,

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they put in logging roads and they subsidize this in many other ways.

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Now, the latest case of this is in Brazil, but Canadian and Norwegian and American governments are all objecting to this,

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but this is very hypocritical because they have been doing the same thing for many years.

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What about what's going on in northern Alberta right now?

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This is a tricky case where it's an outside interest, which is Japan, has bought a lot of forest land.

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When they're done with it, they're not going to care.

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You're quite right. This is another problem.

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Now, I don't see the problem as Japanese.

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I don't think it's a racist or a nationalist issue.

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It's an outside element.

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No, no, no. It's not whether it's outside or inside, or upside or downside.

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It's whether it's private or public.

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Short term leases, or relatively short, so they just take the resources and they don't lose their buy from taking the resources, whereas if they owned it they would say to themselves,

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What they're doing instead is granting them leases, short-term leases or relatively short.

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So they just take the resources and they don't lose their buy from taking the resources.

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Whereas if they owned it, they would say to themselves,

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My God, we own it, let's take care of it, because if we don't take care of it, where will we get wood in 20 years?

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I mean, when people buy something that they own, they take care of it.

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If you own a car or a bicycle or a cow, whatever it is, you take care of it because if you let it rust or let it get ruined in the weather, inclement weather, you suffer in the pocketbook.

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But if I say, well, here's this deal where I'll let you use this cow or car or whatever it is, bicycles, roller skates, and you can't keep it.

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You can just use it now and then what happens you don't know about, well, then you'll tend to misuse it.

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Well, almost like leasing a car, then the car leasers have to really watch out for you

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and make sure that you take good care of it. Whereas when you buy it outright, they don't

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have to breathe down your neck and watch you. This is sometimes called the tragedy of the

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commons, and the problem that it creates is dustballs, because what happens is if you

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Because what happens is if you own sheep, and I own sheep, and he owns sheep in common,

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we have no incentive to take our sheep away and let the grass cover regenerate itself.

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Because if I take my sheep away, your sheep will come in.

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So I can't benefit from doing that which would be in the public interest.

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Whereas if I owned, say, a hundred acres, or a hundred square miles, or whatever it was,

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and the lower forty was becoming depleted, I would keep the cows out of that for a season,

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for a season until it re-vegetated.

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So, one of the reasons for the dust bowl and the okies

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and all those environmental problems was because the range was not fenced in.

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And it's the same with the buffalo.

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That's why the buffalo almost went extinct.

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Because no one could own the buffalo privately.

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The only way you could capture a buffalo is by killing it.

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Now, contrast that with cows, which have never come within a million miles of becoming extinct.

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Indeed, the very threat is just ludicrous, extinction of cows, no.

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The reason is, because if you don't kill a cow now, you have it tomorrow.

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It's just a bizarre thought, I mean, it's so out of, not out of left field,

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but it's just something that modern industry, I don't understand how,

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if it's going to be something they're going to accept, or could accept.

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I don't know whether modern industry will or not, but I think that they will.

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They have children and grandchildren.

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They don't want their children or themselves to have to go around in gas masks.

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People in industry or people like anyone else, they don't want to have a problem, an environmental

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problem.

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They don't want greenhouse effects and ozone layers.

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They don't want to have...

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They don't purposely want it, but when they have the bottom line being money.

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No, no, you see, the bottom line being money is not the problem.

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The bottom line is that the incentive system is such that the bottom line being money leads them astray.

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Adam Smith, in his book, The Wealth of Nations, had this view that the invisible hand, that is the marketplace,

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leads us to do that which is in the public good, even though it's not any part of our intentions to be public spirited.

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He says it's not from benevolence that the butcher and the baker and the candlestick maker

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And then people such as yourself, say a TV producer, give us the wares that they do give us.

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It's not out of benevolence. It's out of an interest in their own self-interest or in their own pocketbook.

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Yes, so people are self-concerned. They're concerned with their bottom line.

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But if the economic legal system is such that it's coordinated with the market, then we have good results.

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But if it's not, then we have very bad results.

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Now, the case I just gave you with regard to the polluter, if there is a law that prevents

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trespass, and that's all it is, is trespass of soot and particles and dust and ash, well

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then they will engage in smoke prevention devices, they'll use better grades of coal

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or fuel or what have you, they'll engage in research to find smoke scrubbers and smokestack

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So let's say this plan is being implemented. Where do you start? What's the first step?

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Well, one interim possible step, and this would not be the ultimate aim, but at least

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it would be a compromise or a beginning or a first step back toward a regime of property

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rights, would be for government to consult engineers and weather people and meteorologists

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and environmentalists, ecologists and say, well, what is the maximum amount of pollution

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that the air will tolerate before becoming a problem.

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I'm reminded of a joke, if I could stick one in, it used to be

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that when mothers and little children

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the mother would tell the little child to eat your soup,

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it would be, eat your soup before it gets cold.

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I once saw a brilliant cartoon that just encapsulated the problem that we now face

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and they were in an outdoor restaurant and the caption read from the mother

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to the little child, eat your soup before it gets dirty.

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The point is that with the atmosphere the way it is, the soup gets dirty very quickly

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and God knows what it does to our lungs.

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So one point that we have to realize is that there is a certain threshold of allowable

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pollution.

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We don't want to end pollution because then we couldn't breathe out.

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We all breathe out carbon dioxide.

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So there is a certain amount of carbon dioxide and other pollutants that the air and the

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Air and the water can safely tolerate.

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Once you go above that threshold, you get the problems.

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Once you're below the threshold, the air and the water can automatically deal with them.

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So what we have to do is find out what is the scientifically determined pollution level

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that is tolerable.

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On a daily basis?

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On a daily basis, monthly, weekly, yearly, whatever.

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Let's say when I left Montreal, the air pollution level was at 56, which was poor.

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Okay, well then it should be better than 56.

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I don't know what the level is, but whatever the level is, call that X.

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Then what do you do?

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Then what you do is you offer bidding rights to various companies.

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One solution, in other words, you now have pollution rights.

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You have a market in pollution rights.

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Let's say we can have 100 tons of pollution per day in Montreal and that is acceptable

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or very good.

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Well, then we say, well, how much am I bid for these 100 tons?

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Oh, you want a ton?

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Okay, how much am I bid for that, and we have a little auction for that ton, and we have

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an auction for this ton of pollutant rights per day.

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And then we know that there will not be more than a hundred tons of pollution if a hundred

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tons is the reasonable amount.

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One possible way is to have an auction, another is to give it to the people that have homesteaded

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over the years by engaging in these technologies.

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The advantages of this is that the more efficient people, the people that are able to get more

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More production per ton of pollutants will be able to buy those pollution rights or outbid

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in an auction those people that are inefficient users of pollution rights.

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Some people would say that means that it's not free enterprise anymore, it's the people

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that have the most money that are going to be making more money.

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Well what I think free enterprise is, is the right to engage in production of an economic

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in American commercial nature, given that you pay the cost of it.

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Now, capitalists pay the cost for laborers, they pay the cost for capital, namely the

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interest rate, they pay rental costs for the land they use.

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I don't think that it's incompatible with the vision of free enterprise that they also

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pay the cost for pollution.

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See, right now they pay every other cost.

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They pay for land, they pay for labor, they pay for capital, but they don't pay for pollution.

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Why is that so incompatible with capitalism?

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I don't see that at all. To me, capitalism is you pay your way. You pay the full cost of what you're engaging in.

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Let me give you another example.

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That makes sense.

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Well, I'm glad it makes sense to you. We'll have to broadcast this from TV as we are now.

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Let me give you another example of how the market can come to the rescue of the environment

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and why it is and how it is that government has pursued unwise policies that create environmental messes.

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Right here is a plastic bag. Right here is a Styrofoam container, Tupperware, Styrofoam.

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We've got things like that all over. I mean, you go to a supermarket, that's where we got this bag. It was from a supermarket.

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People drink out of cups that are Styrofoam and plastic carry-alls.

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You go to McDonald's or Burger King or Wendy's and everything is wrapped to the gills with non-biodegradable stuff,

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Non-Environmentally Friendly Stuff

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Now, what's the explanation for this?

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Well, people like David Suzuki and other people that really don't know economics

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say that the cause of this is, well, it's greed, corporate greed

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or the lust for the unholy buck or something like that

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and that's on the side of the manufacturer

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and then on the side of the consumer they see it

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Well, it's irresponsibility, it's stupidity, short-sightedness, whatever it is, you know.

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We're up to our armpits in plastic and we can't do anything with these toxic wastes

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and yet people are buying them as if there's no tomorrow.

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I have a very different explanation for why the situation is acting so irresponsibly

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and I admit that the situation really is intolerable,

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but the explanation is very different than the Suzuki type explanation.

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My explanation is that it's government's fault.

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Why is it government's fault?

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Is this a fetish, you know, whenever there's a problem, you know, it's the big G government?

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No. It's because government has nationalized the solid waste management industry.

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It's government that comes to your curbside at home and collects your garbage.

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And then it's government that takes that garbage to a dump site and puts it in there.

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There is no market there. There is no competition.

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competition, and that's not free enterprise at all, that's government. Yes, sometimes

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the government contracts out and allows a private enterprise company to collect the garbage

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at curbside, but they're doing it under the government regulations and there's no real

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market here. Imagine if there was a market, and let's assume that the case is correct

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I'd like to assume that the case is correct that plastics and styrofoam really are environmentally dangerous.

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Given this situation, if I had a private dump site, if I had a square mile of land and I wanted to set myself up in the dump site business,

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I would say to you, and you're the trucker now, you're the person that's bringing the garbage to me,

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I'd say, well look, I'll take your plastic, I'll take your styrofoam, but it's environmentally dangerous.

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It's going to ruin the value of my land, my dump site land.

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Whereas if you just put paper in here, I can, you know, go on forever with paper because it's recyclable.

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So I'll tell you what I'm going to do.

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I'm going to charge you based on how much plastic and styrofoam and dangerous substances you bring to me.

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And what are you going to do?

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You're going to turn around and give the same spiel to the consumer, the person, the house owner, the homeowner.

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You're going to say, sure, I'll take your plastic and your styrofoam.

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But, I'm going to charge you for it because they're going to charge me for it.

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So, let's say this plastic bag is going to cost five bucks to dispose of.

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That's an arbitrary number. I happen to use that number in illustrating the point in this book,

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Economics and the Environment of Reconciliation.

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So, let's just use it for illustrative purposes.

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So, it costs five dollars to get rid of this plastic bag.

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And let's suppose that the market situation works itself out such that it only costs a penny to get rid of a paper bag.

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Now, picture yourself at the supermarket checkout counter and they offer you a paper bag or a plastic bag.

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Previously, to produce them, it would cost, oh, say, a penny each.

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Now, you might not pay this penny because it's implicit in the cost of the groceries you buy, but it's a penny each.

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and you didn't have to worry about the cost of disposing of it because the

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ever-generous government is doing so, of course with your tax money but that's

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another story. Well now that they're charging you five dollars for this, I mean

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the whole problem will evaporate. There will be no more problem of being up to

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our ears in plastic bags and styrofoam and that whole mess because we'll say

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to ourselves, you know, is it really worth five dollars to me to have this

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What is plastic bag? And the answer is no.

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See, right now the price system does not give us the full information.

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It only gives us the information as to how much the plastic bag costs to produce.

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It doesn't tell us how much the plastic bag costs to get rid of

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because the government has interfered with the market,

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has made it impossible for a market to exist.

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What I'm saying is that if the government butted out,

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if the government stops, committed this sin of commission,

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Nationalizing or municipalizing the garbage removal service, the problem would go away

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because then prices would reflect not only production costs but disposal costs, and with

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true disposal costs, nobody, well I shouldn't say nobody, there might be some people that

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would use plastic bags for a total cost of 501, 5 dollars to...

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Can you reach to this?

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Here you go.

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Okay, anytime.

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Okay, everything that you said makes sense.

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It sounds simple. I mean, it's not a complex idea.

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So, why is this the first time I've heard of this?

283
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Well, I think this brings us to the whole mission of the Fraser Institute.

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The Fraser Institute is sometimes characterized as right-wing extremists or something, and a lot of the media...

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See, we don't really impact directly on people.

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There are too many Canadians for us to deal with directly.

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We have to deal with Canadians through the intermediation of the media.

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But the media have this idea that the views of economics or conservative economics are, how shall I say, untrustworthy or wrong or wrong-headed

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and they have a different philosophical viewpoint.

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So it's hard for us to get the views across to the Canadian public, as we would like.

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I agree with you. This sounds very commonsensical.

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It's not anything that somebody can't understand who just gives it a few minutes to think about.

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And I think that the reason that this will come as a shock to most people as it is now coming to you

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is because our Weltanschauung, our philosophy, our public policy persona in Canada

295
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is such that it's very unreceptive to the marketplace.

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And to me this is a big paradox because over on the other side of the iron curtain in Eastern Europe

297
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we're seeing the results of central planning and socialism and lack of private property rights

298
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and the whole economy is unraveling and they're calling for perestroika

299
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and they're calling for restructuring and more free enterprise

300
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and over here we're going in almost the exact opposite direction

301
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I think what we need is a little more perestroika in Canada

302
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not just in the Soviet Union or Hungary or East Germany or Poland

303
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And I think that a lot of people just aren't aware of the Adam Smithian message, which is, I think, what the Fraser Institute is all about.

304
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Showing that profits and private enterprise and a price system that really reflects true scarcities, and is not a made in Canada price system, can have very great beneficial effects.

305
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It's still, it's so simple, so I know it's guessing, so who do you think, what type of

306
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interest industry will be the first of the government to take the first step?

307
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Well I don't know, but take the nuclear power industry as an example, you see there's a

308
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perfect case in point, the nuclear power industry has to pay its, it has to pay land, has to

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buy land, has to pay, or it rents it, it has to pay its employees' salaries, it has to

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to pay interest to its bondholders.

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There's one thing that it doesn't have to pay,

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and that's the cost of disposal of nuclear waste.

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This is done courtesy of the government.

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Another thing that they don't have to pay is insurance

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for dangers because the government,

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through the Nuclear Regulatory Act in Canada

317
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and the Price Anderson Act in the United States,

318
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they're free of this problem.

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They don't have to obtain insurance.

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So, what we're saying is, let the nuclear power industry pay the total costs,

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not just land, labor and capital, but also risk or insurance and also a disposal.

322
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And then we'll see. Let the nuclear power industry free on the seas of the marketplace

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to either sink or swim. Right now the government is subsidizing it.

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So this is a perfect case in point where the government is committing another sin of commission

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and is increasing the toxicity, or the toxicity of the system, the toxic waste.

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And we have no control over it as an economy.

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This is a bit of central planning right in the midst of the sea of free enterprise in Canada.

328
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So that would certainly be one industry that I'd like to see reformed.

329
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Another one would be the forestry industry.

330
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And now while I think that the nuclear power industry might take great umbrage at this analysis,

331
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I think that the logging and forestry companies would be very happy with our view, because

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what we're saying is that Canada, the government of Canada shouldn't own any land, except the

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parliament building or places where their bureaus are located. But right now, I forget

334
00:26:31.140 --> 00:26:36.820
which page it's in in the book. I should be able to pick it out better. But right now

335
00:26:36.820 --> 00:26:44.980
Now the government owns about 85% of all the land, and I think if we abstract, oh no, I've

336
00:26:44.980 --> 00:26:50.500
got the page now, it's page 300, and if we abstract from the Northwest Territories and

337
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the Yukon, the percentage is, what is the percentage, it's about 80, almost 90%. Now

338
00:27:01.500 --> 00:27:06.100
this is a disgrace. There's no reason why government should own 90%, some 90% of the

339
00:27:06.100 --> 00:27:36.100
Let them buy the land. What they should do is auction it off to private enterprise. Namely, let the logging companies, who I presume would be among the people that are buying it, let them buy the land. Let them take care of the forest. They'll take care of it a lot better when they own it than when it's under this tragedy of the commons where the government owns it and leases it out and you get all sorts of graft and corruption and bureaucracy and inefficiency.

340
00:27:36.100 --> 00:27:41.100
Great. Well, if you're happy with this, let me give you some more radical stuff.

341
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Take ownership of lakes. Right now, lakes are in the public sector.

342
00:27:49.100 --> 00:27:55.100
This is a bad thing, because we're against public sector owning much of anything.

343
00:27:55.100 --> 00:28:01.100
The lakes are in the public sector, but I guess the access to the lake is private sector?

344
00:28:01.100 --> 00:28:04.100
Well, no. Sometimes there are public beaches so that anyone can get there.

345
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What I'm thinking of is not so much who can get access to the lake, but rather should the lake be used as a sink to put in the chemicals which accompany logging and lumber mills, or should they be used for recreational purposes?

346
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And right now this decision is made in the public sector, through the political ballot box or the political sphere.

347
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What I would like to see is lakes privatized. You own a lake, I own a lake, and we each decide, as owners of a lake, we try to maximize our profits.

348
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Now, I know that sounds like a dirty word, but it's not, because maximizing a profits is a way of finding out what is in the best interest of the consumer.

349
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Because, look, we as consumers, we want to have logs, and we want to have recreation.

350
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It's not a matter that we want to have all recreation and no logs, or all logs and no recreation.

351
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Either one is senseless. It's just like saying we should have all peas and no carrots, or all carrots and no peas.

352
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We want to have an optimal allocation between the two.

353
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Well, suppose there's a particular lake, and suppose it's owned by a logging company.

354
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And suppose that the logging company calculates that this lake is a super-duper lake for recreation,

355
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and if they put in a hotel and some boating and swimming facilities, they can make five million dollars.

356
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Whereas if they keep it in their present interests for logging, they can only make a million dollars.

357
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Even a logging company will use that lake for recreational purposes.

358
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But wouldn't a logging company maybe use it for their own purposes, for logging,

359
00:29:43.940 --> 00:29:48.060
then when they cannot do any more logging, would they just sort of walk away from it?

360
00:29:48.060 --> 00:29:50.620
Oh no, you see, if they walked away from it after polluting the lake,

361
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I presume that it's going to be unfit for recreational purposes for decades,

362
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or maybe hundreds of years.

363
00:29:58.140 --> 00:30:00.780
I'm assuming that these uses are incompatible,

364
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either it's recreation or it's industrial purposes.

365
00:30:04.740 --> 00:30:22.740
I'm just thinking about human nature a little bit. Let's say you own a house and you walk into some people's houses and it is just horrendous what you find inside. Now there are people you walk in and it's almost like a palace. And that's human nature. You're going to find that. So different companies are going to have different personalities.

366
00:30:22.740 --> 00:30:28.740
Oh yes, you're quite right. There are some companies that will really mess up the environment.

367
00:30:28.740 --> 00:30:34.740
People are imperfect. You're quite right. The human being is the mistake-making animal, as far as I'm concerned.

368
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We're making mistakes continually. Whenever I leave here, I say to my secretary,

369
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well, I've made enough mistakes for today. I'll come back tomorrow and I'll make some more.

370
00:30:44.740 --> 00:30:51.740
I mean, we're continually making mistakes, and any philosophy that doesn't take cognizance of this is erroneous.

371
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In the market, when you make a mistake, when you're the Ford Motor Company and you come up with an Edsel, you lose lots of money.

372
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You produce one too many Edsels and you go the way of the DeSoto Company.

373
00:31:03.740 --> 00:31:07.740
What about on a different scale, Exxon?

374
00:31:07.740 --> 00:31:14.740
Well, I'll get to the Exxon in a minute. It's a completely different question. Let's reserve that for a moment.

375
00:31:14.740 --> 00:31:20.740
Well, I'll get to the exon in a minute. It's a completely different question. Let's reserve that for a moment.

376
00:31:20.740 --> 00:31:28.740
Let's just say, okay, so I've said that in the market system when you make a mistake you pay the penalty for it

377
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and you cannot expand as much as you would otherwise and indeed you're forced to contract and maybe even go out of business.

378
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So the incentives are reasonable. They're rational. They encourage choices made in behalf of the consumers

379
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And they discourage choices that the consumers do not give their thumbs up to.

380
00:31:48.740 --> 00:31:50.740
Contrast this with the government sector.

381
00:31:50.740 --> 00:31:56.740
If you're the head of a bureaucracy and you come in over budget, what's likely to happen next year?

382
00:31:56.740 --> 00:31:58.740
They'll increase your budget.

383
00:31:58.740 --> 00:32:04.740
What happens if you're a great administrator and you're a great bureaucrat and you come in under budget?

384
00:32:04.740 --> 00:32:06.740
They'll cut your budget next year.

385
00:32:06.740 --> 00:32:10.740
They'll cut half of your employees if you can do the job with half the people.

386
00:32:10.740 --> 00:32:13.740
See what perversity we have in the incentives here?

387
00:32:13.740 --> 00:32:17.740
The incentives in government is to continually make mistakes.

388
00:32:17.740 --> 00:32:20.740
Not to save money, not to be efficient.

389
00:32:20.740 --> 00:32:23.740
Whereas in the market the incentives are the other way around, toward efficiency.

390
00:32:23.740 --> 00:32:28.740
So yes, people are people, they'll make mistakes whether in private enterprise or in public enterprise.

391
00:32:28.740 --> 00:32:32.740
But at least private enterprise has the advantage over the public counterpart

392
00:32:32.740 --> 00:32:37.740
that the mistakes continually tend to be reduced

393
00:32:37.740 --> 00:32:48.740
If a minister of lumber or a ministry of forest makes a mistake, he makes it for the entire province.

394
00:32:48.740 --> 00:32:52.740
If one company makes a mistake, they make it with 3% of the land.

395
00:32:52.740 --> 00:32:56.740
And then they lose money and they only have 2% of the land with which to make a mistake.

396
00:32:56.740 --> 00:33:01.740
Whereas if another company had 5% of the land and they did a good job, next year they can get 6% of the land.

397
00:33:01.740 --> 00:33:04.740
So you have a rational system.

398
00:33:04.740 --> 00:33:06.740
Now, let's talk about the Exxon Valdez.

399
00:33:06.740 --> 00:33:08.740
They made a big mistake.

400
00:33:08.740 --> 00:33:10.740
Oh, they made a gigantic mistake.

401
00:33:10.740 --> 00:33:15.740
I mean, you know, I forget how many tons of gallons of oil, millions of gallons of oil,

402
00:33:15.740 --> 00:33:17.740
and it was just an environmental disaster.

403
00:33:17.740 --> 00:33:20.740
I mean, that oil is sort of the consistency of black mayonnaise.

404
00:33:20.740 --> 00:33:23.740
Oh, worse than that, what they put on it to get rid of it.

405
00:33:23.740 --> 00:33:25.740
Oh, well, that's a whole other story, the cleanup.

406
00:33:25.740 --> 00:33:27.740
But at least, you know, the oil was a problem,

407
00:33:27.740 --> 00:33:32.740
and the birds and the water animals and the land that's nearby.

408
00:33:32.740 --> 00:33:34.740
So they made it. They made a mistake.

409
00:33:34.740 --> 00:33:38.740
It was a gigantic mistake. But now let's carefully analyze this.

410
00:33:40.740 --> 00:33:45.740
If I shoot you with a gun, would we say that the bullet killed you?

411
00:33:45.740 --> 00:33:48.740
Or would we say that I killed you? We'd say I killed you.

412
00:33:48.740 --> 00:33:52.740
The bullet is only the proximate cause. It's not really the underlying cause.

413
00:33:52.740 --> 00:33:55.740
If somebody said, well, the bullet killed her, let's put the bullet in jail,

414
00:33:55.740 --> 00:34:01.740
they'd be missing something. Their analysis would not be as in-depth as it should be.

415
00:34:01.740 --> 00:34:09.020
Well, I think that blaming Exxon for the Valdez oil spill is sort of like saying, the bullet

416
00:34:09.020 --> 00:34:14.080
killed her, therefore let's get the bullet. And there are many reasons for saying this.

417
00:34:14.080 --> 00:34:20.240
First of all, the proximate cause, or the most proximate of all the possible causes

418
00:34:20.240 --> 00:34:25.460
was the fact that the third mate was steering the ship. Why was the third mate steering

419
00:34:25.460 --> 00:34:29.780
the ship? He wasn't qualified to operate in these waters. I'll answer that one. The reason

420
00:34:29.780 --> 00:34:35.780
The reason he was steering this big gigantic ship, which is the length of three football fields,

421
00:34:35.780 --> 00:34:42.780
is because the captain, who was qualified, was drunk and sleeping it off in his quarters.

422
00:34:42.780 --> 00:34:46.780
Okay, so now we have to peel away the onion a little bit more.

423
00:34:46.780 --> 00:34:52.780
Why is it that this guy was made captain or was kept on as captain

424
00:34:52.780 --> 00:34:58.780
when the Exxon company had every incentive to make sure that the drunkards are not steering ships

425
00:34:58.780 --> 00:35:11.780
I mean, Exxon had no incentive to do this. Poor Exxon, they lost their ship and they lost all that oil. They didn't do well. I mean, they did worse for the environment, but they had no incentive to do this.

426
00:35:11.780 --> 00:35:21.780
Now, there's an interesting law in the United States. It's the law against discrimination. And one of the grounds for discrimination, it has been determined, is handicap.

427
00:35:21.780 --> 00:35:28.780
And one of the things that has been determined to be a handicap is, you'll never guess what, alcoholism.

428
00:35:28.780 --> 00:35:33.780
The point is that the law made it very difficult for Exxon to fire this guy.

429
00:35:33.780 --> 00:35:39.780
So if we're looking for causes that are a little bit beneath the surface, that are not just approximate causes,

430
00:35:39.780 --> 00:35:45.780
we can't say, well, Exxon's a swine, you know, they're a bunch of environmental pigs and the hell with them.

431
00:35:45.780 --> 00:35:51.780
We have to say, well, you know, maybe this anti-discrimination law played some part in it.

432
00:35:51.780 --> 00:35:59.780
And maybe a lion's share of the blame for that spill should be placed at the head of the human rights philosophy, so-called.

433
00:35:59.780 --> 00:36:05.780
Because it was because of that that they couldn't fire this guy, or it was more difficult for them to fire him.

434
00:36:05.780 --> 00:36:10.780
Believe me, they had every incentive to fire an alcoholic and not to leave him there.

435
00:36:10.780 --> 00:36:16.980
to leave them there, to give them a desk job, anything, get them off that boat.

436
00:36:16.980 --> 00:36:20.620
But we can go even a little deeper on this.

437
00:36:20.620 --> 00:36:26.980
Next question comes up, why wasn't the, what were the penalties on Exxon?

438
00:36:26.980 --> 00:36:33.240
Well, the penalties, according to common law and according to the law of the sea that now

439
00:36:33.240 --> 00:36:38.700
operate, the penalties are limited to the value of the ship and the cargo.

440
00:36:38.700 --> 00:36:55.700
Now that's very strange, because if I were to crash my car into your house, surely I would be responsible for a lot more than the value of my stinking car, which might be a 20 year old car worth 50 bucks, and I took half your house away.

441
00:36:55.700 --> 00:37:03.700
Surely a more rational legal system, which, by the way, is run by guess who, begins with a G, government,

442
00:37:03.700 --> 00:37:10.700
a more rational system would be not to limit the responsibility or the culpability to the value of the ship and the cargo,

443
00:37:10.700 --> 00:37:14.700
but rather to limit it to the value of the damages.

444
00:37:14.700 --> 00:37:20.700
That would have been a much more great incentive for Exxon to have double hulled its ship.

445
00:37:20.700 --> 00:37:24.700
And it was a single hull, so once you pierce that hull, out comes the oil.

446
00:37:54.700 --> 00:38:01.700
The Law of Average is that every once in a while, humans being humans, even if they're not alcoholic, you'll have problems.

447
00:38:01.700 --> 00:38:05.700
So let's double-hull them all as sort of an insurance measure.

448
00:38:05.700 --> 00:38:13.700
Because if one of them lets loose with oil, we'll have to pay for, you know, till the cows come home to mix my metaphors here.

449
00:38:13.700 --> 00:38:16.700
But that wasn't operational.

450
00:38:16.700 --> 00:38:25.700
Fishermen have been, suits on the part of fishermen have been dismissed on the grounds that they don't have standing because they don't own the fish.

451
00:38:25.700 --> 00:38:38.700
But yet the fish were damaged, the fishermen were damaged, but because of the law, and here's the sin of omission again, the government has got to, instead of doing everything in the economy,

452
00:38:38.700 --> 00:38:44.700
The be-all and the end-all, mixing in wherever it wants to and where it doesn't belong.

453
00:38:44.700 --> 00:38:49.700
Marketing boards, taxes, delivering the mail, doing everything under the sun.

454
00:38:49.700 --> 00:38:54.700
And what they do is they leave open the area that only government can operate in.

455
00:38:54.700 --> 00:38:57.700
Namely, defining and protecting property rights.

456
00:38:57.700 --> 00:39:00.700
So that's the classic sin of omission.

457
00:39:00.700 --> 00:39:06.700
So again, the Exxon case is not a case which indicts greed or indicts the market.

458
00:39:06.700 --> 00:39:15.700
It's a case which indicts the present mixed economy system, where there's large dollops of socialism.

459
00:39:15.700 --> 00:39:19.700
Now you ask me, why is it that it's so hard to sell this idea to the public?

460
00:39:19.700 --> 00:39:23.700
Another reason, in addition to the fact that the Fraser Institute is misunderstood,

461
00:39:23.700 --> 00:39:29.700
is that there are some very eloquent spokespersons on the other side.

462
00:39:29.700 --> 00:39:33.700
For example, David Suzuki. He's very articulate.

463
00:39:33.700 --> 00:39:40.700
He's very knowledgeable, at least in terms of what the environmental problems are, if not in terms of what the solutions are.

464
00:39:40.700 --> 00:39:46.700
He's got all sorts of podium from which to espouse his views.

465
00:39:46.700 --> 00:39:51.700
He's convinced many of the green people that his views are correct.

466
00:39:51.700 --> 00:39:55.700
So that's one reason that it's hard for the Fraser Institute to get its views across.

467
00:39:55.700 --> 00:40:00.700
Happily, though, the environmental movement is not totally given to socialism and central planning.

468
00:40:00.700 --> 00:40:12.700
There are some very important breakthroughs in the sense that there are people with impeccable environmental credentials who are espousing views very similar to the Fraser Institute.

469
00:40:12.700 --> 00:40:21.700
For example, there's the Nature Conservancy, there's Ducks Unlimited, there's the Auto Bond Society, there's Environment Probe.

470
00:40:21.700 --> 00:40:32.700
All of these groups, they look at the problem, they say, well, you know, there are certain wetlands that are hosts to species that are very precious to us and that are being depleted.

471
00:40:32.700 --> 00:40:39.700
What are we going to do about that? Are we going to go running cap in hand to government, the old socialist method? No.

472
00:40:39.700 --> 00:40:45.700
We're going to borrow a leaf from capitalism. We're going to go buy them. We're going to go buy these wetlands.

473
00:40:45.700 --> 00:40:51.700
and we're going to get acres and hundreds and thousands of acres all around the world

474
00:40:51.700 --> 00:40:56.700
and we're going to get money from voluntary contributions, not through taxes, but from voluntary contributions

475
00:40:56.700 --> 00:41:01.700
and we're going to go buy wetlands and nature conservancies all over the world and preserve animals.

476
00:41:01.700 --> 00:41:05.700
That's perfectly in keeping with the Fraser Institute philosophy.

477
00:41:05.700 --> 00:41:09.700
There was even a case in Alabama where the Audubon Society had a large tract of land

478
00:41:09.700 --> 00:41:13.700
and guess what was discovered on this land, this wetlands area?

479
00:41:13.700 --> 00:41:14.700
Oil

480
00:41:43.700 --> 00:41:48.500
And they made sure that the oil didn't drip out over the seagulls or the herons or whatever,

481
00:41:48.500 --> 00:41:55.220
but they made millions off of that, with which they bought more nature conservancy areas.

482
00:41:55.220 --> 00:41:58.780
And then there's this guy, Larry Solomon, who's the head of environment probe located

483
00:41:58.780 --> 00:42:03.460
in Toronto. And he wrote this magnificent article in the Wall Street Journal, certainly

484
00:42:03.460 --> 00:42:10.540
no socialist rag, and the title of the article was, Save the Trees, Sell Them to Private

485
00:42:10.540 --> 00:42:16.700
and Enterprise. Well, this is just what our book has been advocating. So there are glimmers

486
00:42:16.700 --> 00:42:22.180
of hope and certainly the book that we've just published, it came out about a week ago

487
00:42:22.180 --> 00:42:28.460
we released it, it's had a lot of media coverage and our hope is that the message from interviews

488
00:42:28.460 --> 00:42:33.700
such as this will permeate and get out into the Canadian public and we'll have a modicum

489
00:42:33.700 --> 00:42:38.380
of common sense instead of this audiological hatred for the market and profits and the

490
00:42:38.380 --> 00:42:40.380
So there is room for both?

491
00:43:08.380 --> 00:43:15.380
not only are they compatible but that the economic market and commercial principles are the best means of preserving the environment not only the opposites but the one is the best way to attain the other