Okay, welcome to the fifth session of the ten session Steve Berger seminar with Walter Block or was it the other way around, something like that.
As usual, I'd like to start with a moment of silence.
Could I ask Steve to stand up for a second and embarrass him and everyone let him have
a round of applause for...
Hopefully, one day we'll be taking private roads to hear your seminars.
The toll will be 50 bucks to be on the road because there'll be such demand for...
That'll be great.
And thanks for financing this week, it's just been a pleasure.
Before I start on today's subject of environmentalism, I wanted to do a little housekeeping details
from questions that have arisen from past sessions as is our practice.
And one of the points I wanted to bring up is this whole business of default position.
What's a default position?
The default position is you have to buy your way out or you have to buy your way in.
Who starts? Who is it incumbent upon what to do?
Boy, that sounds incoherent, but let me try to explain.
For example, Dan McCarthy raised the question of when Ben stole his hat,
Ben, cut it out.
When Ben stole his hat and I want to now go and get the hat from Ben and give it back to Dan,
Do I have to get Dan's permission, or in other words, is the assumption that anyone can go and get Ben the thief and get the ill-gotten game hat from him, or do you have to get permission?
In other words, where's the default position? Who has to do what first?
Another example, Stephan Kinsella asks, well, what about spam?
Do the spammers have to get your permission to spam you? Or do you have to tell them not to? Which way does it go?
And his answer is, forget about spam, it's too highfalutin, electronic. Just take the neighborhood porch. Who can come to your porch?
And his answer is, well, if the local Girl Scout cookie sale is coming to your porch, fine.
Because that's sort of the implicit assumption of a neighborhood.
On the other hand, when you get these guys that are trying to sell you encyclopedias, they have to get your permission to come there before they go on your porch, which makes some sort of sense.
And extrapolating from this, I would say that we don't have to get Dan's permission to go get Ben and get the head out of him, because the assumption is that the rightful owner wants his property back.
If he wants his property back, if he doesn't, if he's a pacifist, he has to announce that I'm a pacifist and leave Ben alone, I'm giving him a gift of the hat that he stole from me, it's not really theft.
Similarly, Carianne Citrin asks with regard to the bagel, does the inside person or the bagel homesteader, does he have to notify people that there's a bagel in there or a hole in the bagel?
Remember that example? Let me see if I can dig it out of here.
Here is somebody who doesn't homestead X, but rather he homesteads Y.
Does he have to notify people out here in Z that, hey, you know, you might think that I'm homesteading X and Y, but I'm not really.
And I've been thinking about this and it seems to me that the proper default position is that he has to.
It's just that if X is 20 square miles, you'd think everyone would know, but if they don't know, then you have to notify them.
And again, the reason I came up with this bagel business or this target, whatever, is because of a subject that we'll be getting into tomorrow, namely abortion and positive obligations.
And do you have an obligation to notify people that you're not feeding your kid?
And it seems to me that default position is you most certainly do.
And I get this from common law where you have to take the baby
and put it on the church steps or in the hospital and notify someone.
So the default position is that way.
But it's a very interesting question for libertarians where the default position lies.
Another one on this is sometimes I'm accused of being an information socialist
because my position on murder park, remember murder park where you're allowed to kill everyone
But it's all voluntary.
Well, do you have to notify people that it's murder park?
Suppose you just say, look, you know, come on in, there are rides, you know, and by the way...
Or I invite you to my house and then I say, well, I don't like the cut of your jib and I shoot you.
And I say, well, it's my private property, I don't have to tell you squat.
Well, it seems to me that the default position is that if I want to invite you to my house
and I have the right to kill you in my house, I have to notify you there
Because the presumption is, you know, non-aggression, so the non-aggression is the default position.
But as I say, it's a very interesting question and I want to thank Carrie Anne and Dan for bugging the hell out of me on these questions, pushing me, and I appreciate that.
Okay, with that housekeeping detail out of the way, I launch myself now into the subject for today, which is the issue of environmentalism.
What's going on here? What's going on here is that we face environmental crises.
We face lots of crises, war, disease, starvation, pestilence, drugs, and environmentalism.
I mean, you know, there are environmental dangers and it behooves us to take them seriously
because, you know, we've only got one home, the planet, and if we screw it up, where do we go?
It's the most hospitable place around.
And I think the environmentalists have a point that we should at least be concerned about this.
At risk is the air, the ozone, greenhouse, desertification, species extinction, oil spills, hazardous waste.
The list goes on and on.
Let me personalize this by
equating it with a cartoon I once saw, I think it was in The New Yorker
and there was a mother and a daughter and the daughter was oh, eight, ten years old
and they were sitting in an outdoor restaurant and you'd think the mother
would say to the daughter something like hurry up dear, eat your soup before it gets cold
instead what she said is hurry up dear, eat your soup before it gets
dirty
because the air is so
is so messed up
And it's just sort of like one little vignette of what the situation is like.
Given environmental problems, an environmental movement has arisen to address them.
That's the good news. The bad news is that it consists mainly of people like
Lester Bram, David Suzuki, Barry Commoner, Paul Ehrlich, Tom Hayden, Meryl Streep and John Denver,
who are experts in environmentalism.
And what they do is see environmental problems as a stick with which to beat up on capitalism and free enterprise.
For them, the market is the cause of the problem, the solution is more government and an eradication of the market.
My claim in contrast is the very opposite, that the reason we have environmental problems
is because either we don't have private property rights or we have too much
government intervention or we have environmental socialism or what have you.
Now in my notes here, I now have a
thing from On Liberty by John Stuart Mill
where he says, you know, the idea is, you know, you're supposed to hear both sides.
And the reason I have this here in my notes is that when I give this speech to
non-libertarian audiences, as soon as I say that the problem of
Some of environmentalism is government and the solution is the market, booing and hissing and they won't shut up and so I have to read them John Stuart Mill to get them to shut up, but here I think I'll skip John Stuart Mill, I don't think I'll have to do that.
There are some signs that the left-wing environmental groups are seeing some benefits of the market.
For example, Nature Conservancy, Ducks Unlimited, Audubon Society, Sierra Club.
There was a case, the Audubon Society happened to own the Rainy National Forest Preserve in Louisiana.
They bought it vast acreage, many square miles. They bought it in order to keep the ducks and our brothers of field and stream safe.
And then guess what happened? They discovered natural gas right there.
Now, you know what the Audubon Society would say when natural gas or oil is discovered in parkland?
Don't use it, it's the invention of the devil or something.
But what they did is they reasoned as follows. They said, look, if we follow our usual pattern,
you know, we just won't use the gas and in order to get more land or save more ducks or whatever it is, we'll have to
get contributions.
But wiser heads prevailed within the Audubon Society and they said, look, if we develop it,
we'll make a ton of money and then we can buy tons of nature preserves and
we can spread our good work. And that's what they did.
So, here you have an inkling that even the Audubon Society is receptive to market principles.
Unfortunately, they don't extrapolate from this. They don't say that this applies to other people.
They still say that other people should not be allowed to develop anything. Only they should be.
The insight that markets can help is they're aware of it but they don't extrapolate it, they don't take it to their bosom, they don't use it, they just use it in a very narrow limited way.
Okay, before I get into the environmental problems and libertarian solutions, let me lay out who the ballplayers are, so you can tell who's who and what's what.
Well, the way I see it, there are five different groups and what I'm going to do is to divide them into left and right and under left I'll put the radical and the moderate and under right I'll put the moderate and the radical.
The radical left are the deep ecology people for whom man is a virus and the sooner we get rid of man and save ducks and plants, the better off the ducks will all be, I guess.
The moderate environmentalists, left-wing ones are, you know, think Ted Kennedy or think all the mainstream environmental groups that I just mentioned,
Nature Conservancy, Sierra Club, Audubon, Ducks Unlimited, groups like that.
They're the ones that want to have CAFE standards, make sure that cars get so many miles per gallon,
They favor the EPA, the Clean Air Act, CITES, conventional trade of endangered species should be stopped, things like that.
Moving on to the moderate right, you get the Chicago types, PERC, Political Economic Research Center located in Nevada, which pretty good groups.
They favor things like tradable emissions rights, which I'll get into in a little bit.
The problem with them, as the problem with all Chicagoans, is that they see market failure.
I don't see any market failure, I just see government failure.
And you might even include Pigou and people like that who say that, you know,
pollution is an external diseconomy and therefore we have to tax it
and have to subsidize external economies, things like that.
So that's the Chicago School. The radical right, I guess, would be us guys or me guys or whoever, namely the libertarians who see no market failure, who see all of this as government failure and the solution as the market.
And I just want to stick in Ayn Rand over here. I don't know where to put her. I can't put her in the left, although in this case maybe I could or should, because she has this thing about kissing smokestacks.
Kissing smokestacks? It's not a sexual perversion, but she's always, you know, it's sort of in reaction against these people.
She's saying things like, you know, you people who are against smokestacks, you ought to kiss the smokestacks
because they're great, they mean civilization and this and that and the other.
And then her thing in Atlas Shrug where the tip of this lit cigarette is sort of man's mind or something like that
If you don't smoke you're evil. It's sort of a little weird and idiosyncratic, but I figured I'd stick her in there because she's always of interest.
The kindergarten teachers, when my daughter was in the third grade she'd come home from school and say,
Daddy, Daddy, you're environmentally incorrect because I wouldn't recycle or something.
And I was ready to give it to her, but my wife told me to shut up, leave her alone, because if I convinced her of anything, all of her school chums will hate her.
So instead I started writing about this stuff, you know, because I couldn't tell my daughter because my wife forbade it.
But her and her kindergarten or third grade teachers, they're innocents, unsophisticated people, they naturally gravitate toward the moderate left.
Left, they're not extreme left or radical, but now the radical tree people, you know,
the tree huggers and the tree lovers, they're the ones that say not only that trees have rights,
but that they have as much rights as anyone else, as us, and what's this cutting down of trees?
How do you like to be cut down? You know, so, and they have cartoons, you know, when somebody's
cutting down a tree, the tree is going eek, and little kids are watching this stuff, and it's just
It's just horrible.
Let me give you a few quotes from the radical left group to sort of set the deck here.
Here's someone who's condemning pulp mill operators.
They would rather rate the environment and make a lot of money for themselves
than not rate the environment, clean up and later on stay competitive.
These guys are here to make a lot of profit and they're making a lot of profit at the cost of our environment, a typical radical left kind of view.
E.F. Schumacher, the author of Small is Beautiful,
The world was much better in medieval times when the movement of populations except in periods of disaster was confined to persons who had a very special reason to move, such as the Irish saints.
So no one should be able to travel anywhere.
They say as they travel all around the world to environmental conferences in jet planes and using fuel and stuff,
the earth first has as their motto back to the Pleistocene.
I'm a little weak on history, but I don't think there are any people alive then.
Some of these radical environmentalists are very specific about the man-made things that people should do without.
Here's another quote, the danger lies not in the odd maverick polluting factory, industry or technology, but in industrialization itself.
So they're just against industry, which means we sort of go back to the caves.
Here's Murray Bookchin, the plundering of the human spirit by the marketplace is paralleled by the plundering of the earth by capital.
Free markets, Schumacher says, take the sacredness out of life because there can be nothing sacred in anything that has a price.
Barry Commoner writes that the origin of the environmental crisis can be traced back to the capitalist precept that the choice of production technology is to be governed solely by private interest and profit maximization.
Here's a national park research biologist who says that until such time as homo sapiens should decide to rejoin nature, some of us can only hope for the right virus to come along.
That's pretty harsh stuff, you know.
Okay, I think you get the idea, these people are maniacs.
And we've got to, I don't know, somehow solve these problems,
less maniacalism runs rampant and takes over even more than it is.
So what I'm now going to do is read off a list of problems.
I don't know that I'll get to them all in the hour and a half allotted me,
but I'll make a good shot at it.
and see if we can't apply free enterprise kinds of analysis to these problems to show why they come about and how they can be solved.
And what I've got on my list, and if I've left anything out, please, you know, raise something and we can talk about it in the question period.
I've got air pollution, hazardous waste, running out of resources, species extinction, oil spills, greenhouse effect, ozone layer,
Overpopulation and Environmental Racism.
So let's start with air pollution.
Arthur Pagu, who is a very famous economist of,
I don't know, 80 years ago, 100 years ago almost,
wrote in his book, Wealth and Welfare, in 1912,
smoke in large towns, which inflicts a heavy loss
on the community, comes about because there is no way
to force private polluters to bear the social cost
So this is the classic market failure doctrine that there's no way that private enterprise can stop smoke pollution which is an external diseconomy and only the government can get in there.
Samuelson talks about the divergence of social and private costs.
Oscar Wang and Fred Taylor, socialists say that a feature which distinguishes a socialist economy from one based on private enterprise is the comprehensiveness of the items entering into the socialist price system.
Tom DiLorenzo does a great job in debunking this myth. He says, well look, if the socialists are so great, then the environment in the Soviet Union order have been wonderful in Eastern Europe.
in Europe and he finds that it's way worse than ours.
Rivers getting on fire and pollution
that makes our pollution look very small.
The idea here is that the average manufacturer pays wages
for labor, rent for buildings, interest on loans.
He pays for insurance, he pays for raw materials,
he pays for everything else, except he doesn't pay
He doesn't pay for disposal of the waste products that his process involves.
So, for example, we have a supply and demand curve, and here is the quantity of, I don't know, let's say we're making these podiums again,
and here is the price of the podiums, and there's the supply and demand curve, and in the supply curve are all the private costs.
And this is the actual amount that is produced.
But, Kagoo and the mainstream economists say that there are other costs.
The costs that are imposed on third parties in the form of pollution.
And when we add those costs, the supply curve increases.
And therefore, where we should be is over here.
In other words, the optimal amount of production of these things would be the amount such that all the costs were taken into account.
But due to market failure, they can't or won't or something take into account all these costs and therefore we have to help them.
Then we have to tax these things and take the money to use to prevent smoke pollution or something like that.
That would be the way that the moderate right views this issue.
Let me tell you a little story.
Once upon a time, long, long ago, in a faraway land,
well actually it wasn't that far away, it was the United States.
In the 1830s, and what I am now about to tell you,
I get from Murray Rothbard and a guy named Horowitz of Harvard, a historian.
In the 1830s, there was a spate of nuisance cases, that they called it nuisance cases then, we would now call them environmental cases.
And typically what would happen would be a little old lady would hang out her washing on the clothesline,
and she put it out there wet and clean, because she just washed it, and she came back three hours later and it was dry and dirty.
And she'd go to the court and she'd say, that there manufacturing firm put its smoke over to my laundry and they got my laundry dirty and I want two things, one I want damages and two I want an injunction, injunction means a ruling from the court saying, you know, cut it out or we'll put you in jail or something.
Or you got a case where a farmer, you know, had haystacks and a railroad choo-choo train came by with sparks all over the place and caught his haystacks on fire.
And similarly, the farmer would go to court and ask for, the plaintiff would ask for damages and an injunction.
And in the 1830s, 40s and 50s, pretty much these things were granted.
Not always, you had to prove it, but the law was pretty much in favor of private property rights
because the interpretation was that the soot or the sparks were trespassing.
And just as a person can't trespass on someone else's property, neither can you send your crap through the air
and then onto their property and into their lungs and on their laundry.
And things were sort of hunky-dory because the law was operating as it should.
Now, the manufacturer had to take into account the costs imposed on other people.
And you had research and development in smoke prevention devices.
And you had early attempts to have scrubbers.
And then you had people trying to buy up enough land so that their stuff would only stay in a certain area and wouldn't go all over the place.
He even had the beginnings of environmental forensics.
Now, we all know what forensics is.
What's that show, that cop show where they're always catching people?
Biology, chemists?
CSI.
You know, they go into the laboratory and they measure this and they measure that.
Well, you see, the reason we have forensics for blood and semen and hair particles
and stuff under your nails is because we have laws against murder and rape.
If we didn't have laws against murder and rape, if murder and rape was okay, you wouldn't need CSI to have forensics,
because forensics is the study of stuff, the blood and semen and whatever, to find out who done it.
Well, environmental forensics is an analogue of ordinary biological medical forensics,
and what it consists of is saying, aha, here's a dust particle, where did it come from?
Let's go get the guy who sent it over here and, you know, put him in jail or get money out of him or make him stop.
Okay, so there was no problem. There is no market failure as long as the government or whoever it is, the forces of law and order, uphold private property rights, namely stop trespass.
Okay, then what happened is you got the progressive period, and in the progressive period, 1890, the history of the thing was such that who was the number one power in the world?
Great Britain, not the U.S. The U.S. wanted to be the great power, and how do you become a great international power?
You industrialize, you have manufacturing, you have steel and iron and stuff like that.
So in the 1870s and 1880s when the little old lady and the farmer and the other environmental plaintiffs came to court,
they got a very different message.
The court would say, sure they violated your private property rights, your stinking, lousy, selfish private property rights.
There's something more important than private property rights, and that's the public good.
And then you get a little drum roll, ta-da, public good.
And what does the public good consist of?
The public good consists of U.S. being the number one imperialist power.
And we're only number two and we're trying harder.
You know, they were really not Hertz.
What's the other one?
Avis.
They were really Avisians, I guess.
And so they said to the little old lady and to the farmer and other environmental planners,
you know, forget it.
We're not going to do this.
And Murray Rothbard, one of the best things I think he's done, and the best thing in environmental economics, is a thing called air pollution, which was in the Cato Institute Journal.
And then I copied it in my book on environmental economics and environmental reconciliation.
He quotes somebody from Georgia in 1910 saying that the use of the air for the purposes of, it's the Athens Empire laundry case.
And he says, the use of the air for pollutants is not actionable.
Not actionable? Well, then of course you have market failure. Well, not market failure, but you have government failure.
Look, suppose you're an environmental businessman, you're filled with the, you know, love for the planet and in the 1830s and 1840s you engage in smoke prevention devices and research and development and you use, what is it, the clean burning anthracite coal, even though it's more expensive than dirty burning sulfur coal because you have care for the environment and you don't want to be sued by people,
You can make money, sure, you can make money, you can profit.
Now, move forward to 1895, what happens to the Green Businessmen
where the court will allow all of your competitors to pollute
until the cows come home and they use the dirty burning, cheap sulfur coal,
but you are using the more expensive, cleaner burning anthracite coal, you go broke.
So Adam Smith's invisible hand
doesn't work. Remember, Adam Smith's invisible hand is that
You make profit and do well by serving the public good, and the public good here consists of not polluting other people.
So the whole thing is perverse, but it's not perverse because of anything intrinsic to the market.
It's because the government is not upholding the law of property rights and stopping pollution.
So the answer is, go back to the 1830s, turn back the clock.
I mean, it sounds horrible, it's not modern, but we had it right in the 1830s and the 1840s
and have environmental suits like we did then.
Now, the obvious objection is, well, you know, you really can't sue every car driver individually
because, you know, it would be just chaos and to get to what Coase would say, and I'll talk about him this afternoon,
The transactions costs of suing each and every individual car driver who goes by your house or by your town would be prohibitive.
And Murray Rothbard's answer to that is, well, you don't have to sue each individual car driver.
In the Free Society, all roads would be privately owned, and you would just sue the highway owner.
In other words, there'd be many few highway owners than car drivers, right?
So you just sue them for having a body house not of sex but of pollution
and then they would turn around and say to their people, their customers,
well, you know, sure, you want to drive without a catalytic converter
and you want to drive with using high lead content gas, fine,
but I'm going to charge you quadruple or septuple or something
because they're going to come sue me.
On the other hand, if you put in a little cleaner burning gasoline
and a better motor and it doesn't smoke at the tailpipe, then I'll charge you less.
It's very similar to what private road owners did in the days before asphalt.
They would charge based on the heaviness of the cart and how many horses and on the width of the wheel.
Thin wheel, think ice skates, makes a rut in the road, so they would charge you more,
even though you can go faster with a thin wheel, a big fat wheel would sort of damp it down, so they would charge you less.
So, in other words, the market signals would go through the intermediation of the road owner to the customers and the problem would be solved.
And that is pretty much the solution to the air pollution problem.
Air pollution is not endemic to the market.
There's no market failure.
There's no need particularly to have, what is it, tradable emissions rights.
Tradable emissions rights are, the idea is, you know, let's say we have three companies each polluting 50 tons of stuff into the air.
And we've decided, we being the government, because we're now not suing anyone.
And we decided we can only have 100 tons of pollution, not 150.
Now the old way, the left-wing way, is, well, every company has to cut down from 50 to 33 tons of pollution.
The environmental, the right-wing or the moderate right-wing, the Chicagoite, the tradable emissions right idea is,
Well, each one doesn't have to cut down from 50 to 33 to get from 150 to 50, from 150 to 100.
Rather, they can buy and sell the rights to reduce pollution.
And some firms might be more efficient at cutting it down.
So one could cut it down from 50 to 10 and get the others to pay him to do it.
So you still have the same 100 tons of pollution.
But this is, and they see that this is a great improvement over Pagoo's tax system, but all of it is quasi-market.
You know, whenever I hear the word quasi-market, I check my wallet and I check to see how many fingers I've got.
I'm not interested in quasi-markets, I'm interested in real markets, and real markets are predicated on private property rights.
Now, there is one more complication, and that is this thing called coming to the nuisance.
Suppose I have an airport right there, and what I do, and now an airport wouldn't be smoke pollution,
but it would be noise pollution, but it's the same economic thing.
And what the airport does is it pollutes noise, and if you don't like the airport example,
Just think of a manufacturing firm that pollutes dust, and let's say that they're the first ones there.
So based on the homesteading, they own the airport or the manufacturing thing,
but they also own the right to pollute in that general area, either the noise or the dust.
And if they're there first, they do two different kinds of homesteading.
One, the little area, and two, the bigger area.
So, if somebody comes then and puts up a house right here, and then sues them on the grounds of pollution,
noise or smoke, it doesn't matter, they are, quote, coming to the nuisance, unquote.
Namely, they were their second, and they have to accept the air quality the way it is.
See, this is an attempt to undermine the objection to the thesis I'm offering,
namely, well, you know, if we listen to you, we're not going to have any airports,
we're not going to have any manufacturing.
We will. We'll have some.
If you move to Pennsylvania, Pittsburgh, where they had iron and steel there,
and you're the type that needs an oxygen tent, you can't shut down Pittsburgh.
You have to get an oxygen tent or move out into the boonies somewhere where the air is cleaner.
Now, if they follow you there, if the airport follows you or the manufacturing follows you, then they have to buy you out.
So again, we're getting back to this situation of who the onus is, where's the starting point.
Okay, I think that's all I'll say on air pollution.
Yeah.
What about radio frequencies? A bunch of people have to build a house and all of a sudden radio is invented.
Is the transmission of frequencies from a certain spot to a larger area a violation of the larger areas?
No, Murray Rothbard talks about this in his article, which I recommend very, very highly to anyone interested in environmental economics or environmental law.
And he says, there has to be some sort of harm, like everything has radiation, like, you know, this wristwatch has radiation.
We all radiate stuff, but it's imperceptible and harmless.
So he would say that radio, you know, it goes right through your house, but it doesn't harm you and you're not even aware of it.
He would say that that would not be a violation. It's, in effect, homesteadable.
Like, take the case that we all breathe out, and we breathe out carbon dioxide, which is a poison.
But we've, in effect, homesteaded the right to breathe out by having our grandparents breathe out.
You can't sue anyone for breathing out, which would be another possible objection to the thesis.
Okay, what I want to do now is get to the issue of hazardous waste and paper and plastic bags,
which gets a lot of people very exercised.
Now, I'm going to give you two scenarios, and the first scenario, imagine yourself at the checkout counter of a Walmart or a Kresge's or A&P or something like that,
and, you know, you give them your groceries and they run it up, and now they ask you that inevitable fateful question, paper or plastic bag.
Now, I'm going to assume with the environmentalists, the left-wing environmentalists, the watermelons, you know, green on the outside, red on the inside,
I'm going to assume that plastic is horrible.
It's the invention of the devil, it's non-biodegradable, it poisons the ground where you have to finally get rid of it.
It's just a horrible thing.
Whereas paper is wonderful, it's lovely, it's biodegradable, it is like fertilizer, it helps make the earth better and all that.
And I'm going to, you see right now in most groceries, but not all, what they do is they implicitly figure in the cost of the wrapping the paper bag or the plastic bag.
They don't charge you for it any more than they charge you for the lighting or for cleaning the aisles.
But let's assume that this is not so. Let's assume that they charge you
explicitly for the paper or the plastic bag and let's assume that they charge you
a penny for each because they're very cheap. Okay, now the argument is that the
only incentive that you'll have to be environmentally sound, that is pick the
Paper is benevolent because it costs a penny each and we'll draw up some sort
of analytic framework here where here we have paper and here we have plastic and
here we have the cost to produce or buy the paper or the plastic and it's a penny
And the argument against the market is, well, the market is supposed to lead us by an invisible hand to do that which is in the public good, and here the only incentive that we have is benevolence, feeling for the planet or something like that, and the hippie dippies will do the paper and the rest of us will do plastic, maybe it's more convenient or something like that, and the market is not working.
Now, the error of this is, the cause of the problem, and this is as a constant refrain, is not the market, but rather government preempting the market.
Where did government preempt the market? Well, government preempted the market by municipalizing solid waste management, or garbage dumps.
In most cities, there are some rare exceptions, but in most places what you do is you pay taxes and then they collect your garbage and then they ship off your garbage to the dump and that's it.
So it costs you no more to do paper than to do plastic because you pay for it through taxes and there's no law or anything like that.
Imagine now, we de-municipalize or privatize garbage dumps.
Now, I tell you that paper is easily disposed of and there the cost of disposal of paper is also a penny.
And because plastic is so horrible, the cost of disposing of plastic is five bucks.
I'm just using this as a numerical example to illustrate what the argument is.
Okay, now Prem, you own a garbage dump.
How much would you like to charge if I bring a plastic bag to you, given that the cost of it is five bucks?
No, no, no, no. No, no, no. Remember, you're a capitalist pig. You want to make profits, greed.
Remember, we have dollar signs on our eyeballs and cash registers for hearts.
How much would you like to charge?
Ten dollars.
Nah.
Twenty.
A million.
A million. There we go.
Ben, he's charging a million dollars. What are you going to charge for plastic?
For a competing garbage dump place, a little less, because you can make a big, big profit, right?
And a max a million, you'll charge a little less. Where will it end?
Adam, how much will you charge if he charges 10 bucks?
Nine.
Nine or 9.99 or whatever.
In other words, in equilibrium there are no profits, so the price has to be bid down to the cost of it.
So I assume that in a private garbage dump setting, the price of putting a plastic bag in a dump will be about five bucks, give or take in equilibrium.
We never get to equilibrium, so it'll be 550, there'll be some profit, but it'll be roughly that.
Whereas the cost of putting in a paper bag will be about a penny.
See, the idea is that if you put in paper bags, after the dump is all filled, then you can put a farm there, or you can put a hotel there, or a housing development or something.
Whereas if you put plastic, it'll be like Love Canal or something, which is a whole fallacy, but I don't want to get into that for the moment.
And it'll be, you know, this toxic waste, toxic dump site, and you won't be able to use the land for anything,
So you might as well get your five bucks for each plastic bag so that you're compensated for not being able to sell the land for any reasonable purpose.
Okay, now let's go back to our original scenario. You're out at the supermarket checkout counter.
The dump sites have been all privatized and the prices that you now face are the total price, the sum of the prices,
is two cents and here it's 501. Now, does anyone doubt that the whole problem goes away?
That now there is an incentive, that now the invisible hand is working?
You're going to have to pay 501 if you pick the plastic bag and only two cents if you pick the paper bag.
So all of a sudden, Adam Smith comes back into the picture.
The point is that the reason Adam Smith was banished in the first place in the
first scenario was not because there's something about the environmentalism or
garbage or anything like that that is not conducive to markets, rather it's
because the government screwed up and messed up and created the problem and
then they blame it on the market. At 501, will plastic bags be used? Yes, but only
when their value is more than 501.
For example, you know those plastic bags that they use to drip stuff into your arm when you're in a hospital, right?
They'll use them.
I mean, we're not crazy here, we're not against plastic bags, but we're just saying that with a price system,
the problem of socialist calculation that the Austrians have been very involved in doesn't arise.
If everything has a price, then there's the solution.
Similarly, you have a baby, Bob Murphy just has a baby, that baby has diapers, should he use plastic diapers or what do you call it, diapers, cloth diapers with safety pins and stuff like that?
Well, there is no answer. The reason there's no answer is because all the prices are not, they're available and you can't choose.
You have this problem of anarchy in the bad sense, or chaos, because you know what the cost of the plastic diaper is, you know what the cost of the cloth diaper is,
but you don't know what the cost of using the water is, because you're not charged for it.
You don't know what the cost of putting a dirty diaper into the landfill is, because it's municipalized.
So the solution to this environmental problem of hazardous waste is that everything should have a price,
and then we'll be able to figure it out and you can only get a price if you have
private property rights and that means markets, not quasi-markets but actual
real markets. What's the view on fuels? Should we go wind power, solar power,
water power, coal, gas, oil, nuke, what? Again the same motif. If everything had a
If we had a market price, we could figure it out, but we have, in terms of nukes, we have prohibitions of building nuclear power, which is harmful to nuclear power.
On the other hand, we have the Price Anderson Act, which subsidizes all sorts of things, so you don't know.
The solution to that problem, you see, libertarians or Austrians or what have you, we don't have stock in coal companies or oil companies and therefore we're pro-coal or pro-oil.
Our view, I think, is let there be a fair race between all of the possible fuels and let people pick whatever they want
based on price or convenience or what have you, but let the prices reflect the full costs.
And the reason the prices are not reflecting the full costs has got nothing to do with market failure.
It's because government is not allowing, the government is subsidizing and taxing and making complicated
And nobody can figure out what to do.
The thing about Love Canal, and here the PERC people are very good,
what happened is that the Hooker Chemical Company sold the land,
I think they were forced to do it, I'm not sure, they sold it for a dollar and they
they gave them a letter saying, you know, there's stuff
under here that we got
three foot thick cement walls around,
be careful, and the government said, no, no, no, don't bother us.
And then they stuck pipes through it later and the stuff got into the Love Canal.
So again, this is not a market failure, this is a government failure.
I have to tell you about my man William Rathgee.
Maybe I'd better spell that because it's a hard name to...
William Rathgee is a garbologist.
What's a garbologist?
A garbologist is to garbage as an archaeologist is to ancient statues.
Most people see a mound of garbage and we go, whoa, you know, let me get away from it.
The garbologist says, oh no, you know, let me...
Sort of like nobody really grows up wanting to be a proctologist or a garbologist and, you know,
mothers don't say, my son, the garbologist, but in any case, Rathje is a garbologist
And he studies garbage dumps, and what he tells us is that the real problem is not plastic, it's paper, especially telephone books.
They set off methane gas, and they're just a big pain in the neck, whereas plastic is inerted, it's not poisonous or anything like that.
Well, remember I told you the can't open a joke about assuming things?
As an economist, we have a specialization in division of labor.
I don't know who's right on this, whether it's paper or plastic, that's the good guy or the bad guy.
But all I can do is, you know, use a different, I would reverse the case and say,
aha, you know, it's the paper that's five bucks and the plastic is only a penny.
The point is, we don't have any, what's the word, desire to have any particular fuel or paper or plastic or anything.
All we're saying is, let there be market prices based on private property rights and the problem goes away.
Okay, the next issue is running out of resources.
Now you get this group, the Club of Rome, and the Club of Rome will say things like this.
They'll say, well, we use 10 tons of stuff per year.
We have proven resources of a hundred tons per year, and therefore in ten years, we'll run out of this stuff, geniuses.
They don't realize that as you start to run out of stuff, what happens to the price of it?
Price of it rises. When the price of it rises, you go look for more of it, you use substitutes for it, and the problem goes away.
And you don't run out of anything.
There was a bet between Paul Ehrlich, who won the Genius Award by the MacArthur Foundation,
which I think is half a million bucks or some serious money for these left-wing geniuses.
And he had a bet with Julian Simon.
And this was in the 70s or the 60s or some long time ago, 80s, I forget when it was.
And they bet 10,000 bucks on whether we'd be running out of resources.
And they agreed that the way to determine whether we're running out of resources is whether a market basket of resources rose or fell in price compared to other things.
And I guess the market basket of goods was like, you know, a ton of copper and a pound of gold and a bushel of wheat.
and you know this that and the other you know just sort of what's happening with
the price index of those five or ten things and the genius lost our man Simon
won and that hasn't stopped the Ehrlich I mean Ehrlich is the one who says when I
get to overpopulation I'll have a lot more to say about Ehrlich you know we're
doom and gloomster in the 60s and 70s 80s every 10 years he writes a book
saying, you know, that in 10 years from now we'll all die from lack of food and, you know, we're still going.
Now, right before Julian Simon unfortunately died, they were thinking of another bet.
And the way Paul Ehrlich wanted the bet was, now it was on things like fish.
Are we going to run out of fish?
And Ehrlich wanted the bet to be just on fish that you catch in the ocean.
And Simon said, no, no, no, let's make it all fish, you know, fish that you find in the ocean and fish that you find from fish farming.
And Ehrlich didn't want that back.
What else do we have on depletion of stuff?
With regards to deforestation, in my class on environmental economics, I show these cartoons where they're hacking down the forest.
There's this wonderful guy, Cyril Sneer, lumber profiteer.
This cartoon is really precious.
And he's cutting down all the trees.
You know, he says every tree is money and there's no such thing as petty cash.
And he's got these great quotes about, you know, kill all the trees.
And it turns out that he's killing all the trees on government land, because he has a contract to do with those trees as he wishes for six months and he's got to get them all in by the end of six months.
But suppose he owned the land. Would it make sense to kill all the trees and not replant? No, it's silly. So the cause of the problem is government ownership.
Out West, the sage brush revolution or rebellion or whatever, they've got this stuff of letting wolves loose.
Why do they let wolves loose on their own property?
I mean, suppose they let wolves loose in the city or something.
I mean, the idea here is that if we have private property, again, I hate to sound like a broken record or a parrot repeating and repeating,
but these problems come about because of government ownership, not because of anything intrinsic to the market.
Okay, the next one is, what else have we got here? Ah, species extinction. I think I can get this in before the break.
Species extinction. Now remember we went over the tragedy of the commons the other day?
And we said that when you own stuff, together when it's communal, everyone tries to suck up more of the orange juice or the Coca-Cola,
Coca-Cola that is communally owned, whereas when you own it yourself, you tend to preserve it.
Well, there's this evil, horrible movie, which I really like, and I had to suspend my judgment when I watched it,
Dances with Wolves. Anyone see that movie? It's a really good movie if you can forget about your brain,
and just sort of, you know, oh yeah, yeah, you know, groovy man and, you know, if you're a little drunk, it might help, you know,
but you have to suspend your critical faculties if you want to enjoy these Hollywood left-wing movies.
But the motif there was that the Indians were great guys and they would only shoot as many buffaloes as they needed,
whereas the white men are the devil and, you know, they just shoot them all and they're evil.
Well, the reason we had the buffalo become extinct, almost become extinct, is because they weren't owned.
The reason the cow never came within a million miles of extinction is because it was always privately owned.
Now I'm going to illustrate this. Here is a cow. I'm going to give him a smiley face because he never came within a million miles of being extinct and he was privately owned.
And here's a buffalo, and I'll give him an unhappy face, because he almost went extinct.
They're the same animal. I mean, they both moo, I think. I'm not sure if they moo.
I've never been that close to a buffalo, but they're both big and fat and give milk.
And if you crash into one of them, you're in trouble.
and, you know, they have horns and they're both stupid and, you know...
Why did one become extinct and the other never within a million miles of extinction?
Why doesn't the farmer go into his lower 40 with a machine gun and start mowing down all his cows?
Rat-tat-tat-tat!
Whereas that's what they do with the buffalo.
The reason is opportunity costs.
If you kill a cow today, what's the cost of it?
It's the... the cost of it is a cow tomorrow.
Well, you don't have a count tomorrow, so it's a big cost to shoot a count today.
It doesn't mean you don't shoot him or kill him or slaughter him, but you don't
shoot the young ones or the female ones that can give birth and all.
Whereas, what's the cost of shooting a buffalo today? Is it a buffalo tomorrow? No, it's nothing!
Because if I don't shoot it, Ken's going to get it.
Right? I mean, it's running by me and Ken and then Steve,
And if I don't shoot it, Ken will get it, and if Ken doesn't shoot it, Steve will get it, so we'll all grab it, and we'll just use the tongue, or the liver, or whatever the delicacy is, and we'll leave them littered all over the place.
The Indians did it too, the way they would kill buffaloes, they'd run them over a cliff, and you just can't be picky about who you run over the cliff, it's the whole kit and caboodle run over the cliff, but that's another issue about Indians and white people.
But the point is that if you have private property rights, there's no extinction because there are costs of killing it and you handle them in a reasonable way.
And if they're not owned, well, then the sky's the limit. And then we have overfishing and killing.
Look, the elephant is just a cow with a funny looking nose, right? I'm not into biology.
Okay, there are other differences. You need a strong offense for an elephant or a rhino, but the reason that they don't allow this is because the governments are perverse.
What the government is saying is that since they're extinct, we can't have markets and it's illegal to sell ivory.
The very opposite is the case.
See, their analysis is that the reason elephants and rhino are going extinct is that the ivory is very valuable and the rhino horn is even more valuable.
It's $100 an ounce or something like that.
And therefore, you shouldn't shoot it.
The point is that if the only reason the elephant and the cow and the buffalo have a chance of extinction is because they are valuable.
The animals that are much more in danger are not these big animals, but it's the creepy, crawly, disgusting animals that slither around.
Those are the ones that are more in danger of being extinct, because we'll just stamp them out because they're disgusting and ugly.
Who will preserve those animals?
The ones that will preserve those animals are a very specialized group, namely, what do you call it?
namely, what do you call it, pharmaceutical companies, because they might, there was this other movie, Medicine Man, with Sean Connery, 007 guy,
and they found some cure for cancer in the Brazilian forest and they were cutting down the forest.
Well, pharmaceutical companies and biology departments of great universities would buy up parts of Brazil or wherever they think that there'd be a shelf of animals that could teach their students or be part of future medicines.
And they would safeguard them. But there's no reason to worry about the elephant or the rhino. All you have to do is privatize them.
Now it's true, you can't put an elephant in a barnyard, it needs a bigger space and you have to put a thicker fence or an electrified fence, but as I say, the elephant is just a big cow, it's the same principle.
Okay, you guys ready for some wonderful jokes? Not like the previous ones which were lousy, but today's for some reason are much better.
Okay, here are some wonderful jokes.
You know you're in California when your coworker has eight body piercings and none of them are visible.
You make over 300,000 and still can't afford a house.
You take a bus and are shocked that two people carrying on a conversation in English.
You know you're in California when your child's third grade teacher has purple hair, a nose ring and is named Breeze.
You know you're in California when you can't remember, is pot illegal?
You know you're in California when you've been to a baby shower that has two mothers and a sperm donor.
You know you're in California when you have a very strong opinion about where your coffee beans are grown
and can taste the difference between Sumatran and Ethiopian.
These aren't that good. Let me skip them.
You know you're in California when your hairdresser is straight, your plumber is gay,
and the woman who delivers your mail is into S&M, and your Mary Kay rep is a guy in drag.
You still can't remember. Is pot illegal?
Okay, last great joke. Pay attention to this because this will absolutely be on the final exam.
Four men were bragging about how clever their pet cats were.
The following ensued. The first man was an engineer, the second was an accountant, the third was a chemist, and the fourth was a government worker.
To show off, the engineer called his cat, T-square, do your stuff.
T-square pranced over to a desk, took out some paper and pen, and promptly drew a circle, a square, and a triangle.
Everyone agreed that that was pretty good.
But the accountant said that his cat could do better.
He called his cat over and said,
Spreadsheet, do your stuff.
Spreadsheet went out into the kitchen and returned with a dozen cookies.
He divided them into four equal piles of three cookies each,
and everyone agreed that that was very clever.
But the chemist said his cat could even do better.
He called his cat and said,
Measure, do your stuff.
So Measure got up, walked over to the fridge,
took out a quart of milk, got a 10 ounce glass in the cupboard,
and poured exactly eight ounces without spilling a drop.
Everyone said, wow, that's a great cat.
Then the three men turned to the government worker
and said, what can your cat do?
The government worker called to his cat and said,
coffee break, do your thing.
Coffee break, jumped to his feet, ate the cookies,
drank the milk, peed on the papers,
sexually harassed the other three cats,
claimed that he injured his back while doing so,
filed a grievance report for unsafe working conditions,
Put in for workers' compensation and went home for the rest of the day on sick leave.
Okay, let's get back to the economics, which is, as we know, deadly, boring and dull, so we'll do the best we can.
There was another movie, Star Trek IV, where there were no whales because we had killed all the whales
and our boys had to go back to the 20th century from the 25th century to bring the whales back to the 25th century
because there were super guys that were kicking their butt, another example of, you know, species extinction.
And the thing with whales and fish is not having quotas for fishing, which is quasi-market, but ownership of the ocean.
And what is this fish freedom crap where they run around like maniacs?
You know, we got to put them in pens, you know, with electrified fences and stuff.
And the reason we don't have research and development in electrified fences in the ocean
The reason we want to keep the whales and these other critters where we want them is because there's no private property rights in the ocean.
That's the same thing with oil spills.
If I own some ocean and Ken had an old boat with rust and only a single hull with oil in it,
I'd charge him a ton of money to go in my ocean because I know that if he lets loose in my part of the ocean,
then Steve is the next guy who'll sue me.
So I would insist, you know, whereas if he had two holes and it was freshly painted and all, then I'd charge a lower price.
So again, it's privatization that is lacking. It's non-ownership or government ownership which is the problem.
Now how did the mainstream deal with the endangered species problem? They deal with it with an Endangered Species Act.
and this has given risen to the three S's, S as in sand. So suppose you find an
endangered species on your land, what are you supposed to do? Shoot it, shovel it
and shut up. Because if you announce, hey look there's a parrot or something there
they're going to come down and you're not going to be able to use your land for
anything. They'll take it over. So it sets up negative incentives. During the break
Ludwig, someone was mentioning that, you know, if you found the last pair of bald eagles
on your land or some species on your land, you know, should the government stop you from
doing this?
Well, the point is that if it's the last pair of species, it'd be worth millions.
You're not going to shoot them in a free society where the government won't take over your
land.
Okay, the next one is, what do you call it, greenhouse effect and global warming.
Now what's going on with the greenhouse effect and global warming?
So, what's going on, as far as I can see, as a non-meteorologist, as a non-weather person?
Well, first of all, you know, weathermen have a lot of trouble predicting tomorrow or today.
They sort of get it half right.
And here, some of them are predicting what's going to happen in 100 years from now.
And if we don't trust them for tomorrow, why are we trusting for 100 years from now?
One problem.
The problem is, I think what you want, or what the lay person wants, and I'm a lay person when it comes to these things, is consensus of the field.
You don't want to hear, you know, three guys say this and four guys say that.
There is no consensus within the field of, you know, operationally defined as people with a PhD in weather or meteorology or something like that.
There's nothing like 98% of the people say this, whereas 98% of economists will say the minimum wage law creates unemployment for unskilled workers.
It's just Carden Kruger and a few other crazies that won't.
It doesn't have to be 100%, but if you get something like 90-95%, but you get nothing like that.
You get these guys that say this and those guys that say that.
You get this guy Bjorn Lomborg, who wrote a magnificent book, and they try to Michael Belial him,
you know, get his book banned because he was, I don't know, something wrong
and he's withstood the test and, you know, he makes the case that we're not going to hell in a hand basket
and this was Julian Simon's thesis too, that things are not getting that bad
despite government interventions which we shouldn't have.
When I look at the weather patterns, here's what I see
This is from 1860 to 1980 and notice the, we're talking about one degree centigrade.
It seems to me that it's sort of flat for the last hundred years or so.
Yes, if you start over here and you end over there, it's an upward trend,
but if you start here and you stop there it's flat and you can sort of if you
want to interpret the thing that it's going up you you pick a certain starting
point in a certain any point it's going up you want to pick that it's flat you
can do that and pretty much you can pick that it's going the other way around
there are other problems with this stuff first of all this is the northern
hemisphere secondly there's a thing called the heat island effect if you
If you take your readings near cities, then you'll get an overestimate of the global warming.
There are different places to take the readings in the air, in the water, in the icebergs, on land.
And when I, you know, when you put it all together, it doesn't seem like much is happening.
And the big stuff that's happening is within one degree centigrade.
Okay, that's 1860 to 1980.
Let's take another look over here.
This is just the US as opposed to the Northern Hemisphere.
And again, it looks pretty flat within one degree centigrade.
So it seems difficult to extrapolate from this sort of a thing
that the sky is falling and Chicken Little is right
and we got to, you know, stop everyone from using underarm deodorant
and refrigeration and stuff like that well now that's what do you call it
that's ozone liar which interestingly enough the the ozone hole is over
Antarctica but there's no industry in Antarctica and when I mentioned this to
my left-wing environmental friends they start talking and I don't understand
what they're talking about it's strange okay let me try another one on you good
People. Here is one a thousand years ago, the past thousand years average
temperature. You can see the warm period where they called Greenland, Greenland
because it was green, that was global warming. So you know if you start over
here and you go to here, we're having global cooling. It's interesting in the
In the 1970s, the left-wing environmentalist movement was saying we're having global cooling and therefore the government's got to get involved
And now it's global warming and the government's got to get involved
And if it's global leveling, the government's got to get involved, you know, sort of whichever way it goes, the market is failing
So I'm not sure what you get from this, but it doesn't seem that there's need for panic
This guy at the Hoover Institute, what's his name? I forget his name
I wrote a book saying that the global warming is good because, you know, now the northern USSR and northern Canada will be able to be fertile and stuff and won't be so bad and, you know, we'll have air conditioning or something.
Okay, now here you have, let me get both of these in.
Here you have a much longer period, here you have 20,000 years,
and that looks as if we are having global warming.
But if you look at a million years back, again it doesn't seem like much,
and especially since this last little bit here is way before the advent of mankind.
Okay, let's suppose though that they're right.
Remember, they can't open, and what we do is we suppose, if we don't know as economists, we suppose this, and then we suppose that,
and we analyze each case because we are not experts in that, or at least I'm not.
Now, some of you might be, but I certainly don't have any strong feeling as to whether we're having global warming.
But suppose we were. So what do they say? They say, well, we should get rid of industry,
because industry is creating global warming, and you have only one planet, and all that.
The argument against that is, one of the theories as to why the dinosaurs disappeared,
is that there was this big meteor that fell somewhere in the Gulf of Mexico,
and it created havoc and all the dinosaurs died.
Well, every day we get hit by little teeny meteors that get smaller in the atmosphere as they come down,
But every once in a while, there's a big mother of a meteor.
And what they're afraid of in two, five hundred years, I don't know, is a real big meteor that can end the Earth.
So what I'm trying to say is that there are really two dangers we have to worry about.
Not just getting the planet a little warmer, which means that we should have less industry,
but also worrying about meteors, which means we should have more industry,
even at the cost of one or two degrees centigrade higher.
Because the only way we're going to stop the big meteor,
which might come in two or four hundred years, we don't know,
is to go up there with spaceships and blow it up or steer it away or do something like that.
And in order to go up to a meteor that's around Jupiter now in two hundred years,
we've got to have a technological society.
We can't do that living in the caves and no toilet paper kind of society.
So even if it's true, it's not clear that what is indicated is that we have to end industry.
Okay, what else do we have?
We have environmental racism. What's environmental racism?
Environmental racism is the siting of garbage dumps and facilities that are not pretty in areas inhabited by black people.
And this is seen as, you know, another capitalist trick that, you know, we're inherently racist.
The proper analysis that I think of this is that it's not really a black-white thing, it's rather a rich-poor thing.
And it just so happens that blacks are poorer than whites on average, for reasons I don't want to go into now,
so that these places are sited in poor areas.
Why is it that you don't have a cement factory in downtown New York City?
Sorry? Land values. Not zoning. I mean, they wouldn't allow it, but the key is land values.
I mean, you can't put a cement factory on the corner of, you know, 57th Street and 6th Avenue. It's crazy.
It's land values. Now, there are two ways to go. One, the people are already living there, and now you put in a garbage dump.
The other is the garbage dump is already there and then the people move in there.
Suppose the garbage dump is already there.
You've got to have a garbage dump somewhere.
It's already there. Who's going to be moving in? Rich or poor people?
Poor people because the land around the garbage dump would be lower value
and poor people want to build a house, they go to a lower valued area.
Poor people don't go to California to build a house because, you know,
to buy a little bungalow in the outskirts of San Francisco is a million dollars.
So if you want a little bungalow, you have to go to flyover country.
I was teaching in Conway, Arkansas, at the University of Central Arkansas after I left Holy Cross.
And I bought a house there and the house cost $60,000.
And this was just a couple of years ago and I had about a half an acre and it was a 1200 foot house.
A friend of mine had a house in California that was a little smaller than that.
was like 900,000. So poor people naturally tend to gravitate toward lower real estate values
and lower real estate values are in places where nobody wants to be.
You know, sometimes what they do is they take a survey of which is the best city to live in
and they do this and that and the other and, you know, nearness to schools and this and that and the other.
The best way to figure it is real estate prices because that's what people want to live.
The market is sort of telling you what the best place to live is based on real estate prices.
So, it's not environmental racism, certainly not when the poor people move in second after the place is already sited.
Now, how about the other way around, when there are people there?
Well, where will you... Now, remember you were all in the role of private garbage dump owners?
Where are you going to put your garbage dump? In the middle of Manhattan? No.
You're going to put it out somewhere in the boonies, where poor people live,
and poor people are overrepresented as black people.
So it's got nothing to do with racism. The whole thing is silly.
It's just another stick with which the enemies of the free market try to beat up on capitalism.
Okay, let's now go to overpopulation.
What's happening in the overpopulation area?
In the overpopulation area, people like Paul Ehrlich are saying,
You know, we're going to choke on our own whatevers and we'll have too many people.
And population density is the cause of environmental problems
and they go into all this stuff, you know, every person,
every baby that's born is going to eat, you know,
10 tons of turnips and five tons of spinach
and where are we going to get it from?
And we're going to run out of the earth
and on and on with the overpopulation.
Thomas Sowell offers us the following analysis, and what he says, he says he relates population density,
I'm trying to make this more clear, I guess that's better, I guess you have to make it as big as possible, there we go.
What he says, what Tomasol says is, if the overpopulationists were correct, then the countries that have the highest density of population, namely the most like the horror scenario of Paul Ehrlich, would be the poorest, and the places that are the emptiest would be the richest.
You get that? In other words, if overpopulation means we're all going to choke our own waste products
and we're all going to die of starvation because there's just too many people on the planet,
then high density places would tend to be very poor and low density places would be very rich.
So what you should have is a supply curve, namely these three boxes should be filled in.
You've got it, namely there ought to be entrance in those three boxes, namely the very heavily dense places should be poor, and the very low population places should be rich, and you should have only those three boxes, but in actual point of fact there is no relationship between population density and wealth, and therefore you cannot make any such
and the Basile Equation.
Any of you ever been in a plane lately?
That's a silly question.
If you look down, the bloody U.S. is empty.
There's nothing there.
Okay, every once in a while you see New York City, about this big,
and then you see Philadelphia.
And this is the East Coast, which is more populated.
and then you go over the mountains in West Virginia and there's nothing there.
You go to the west of the Mississippi, there's nothing.
There's absolutely nothing. Okay, there's Chicago and Denver, but the place is bloody empty.
And the U.S. is, you know, not an empty place compared to other places in the world.
I mean, you go to northern Canada and there's nothing there.
There's an igloo or something.
The earth is empty.
Another way to put this is Thomas Sowell, who says suppose we were to take all the population of the earth, all 6 billion people and put them into the form of a single-family house of about 2,500 square feet with a normal front yard and a normal backyard, how big a territory would you need to fit all 6 billion people in?
Now look, there'd be no shopping, there'd be no roads, there'd be no playgrounds, there'd be nothing.
Just people in these little single-family houses, middle-class style, you know,
2500 square feet with a front yard and a back yard. And you know the answer is?
Texas.
Texas, that's right. The whole country could fit into Texas. The whole world could fit into Texas.
Just to give you an idea of how empty the place is.
When I was a kid,
what we used to do when we were feeling silly was have contests
as to how many people you could fit into a telephone booth.
I see John saying, yes, yes, I remember that.
Whatever. Nowadays you can't fit people into a telephone booth because there's no such thing as a telephone booth.
Such is progress, you know, you have these little things there and
even without, you know, there's no booth. Nowadays I understand what the kids do is
is they all gather in a musical thing and they put somebody above them and they, what's that called?
Moshing, where you put someone above you and crowd surfing, that's it.
Well, suppose we go back to my generation, forget about this crowd surfing stuff,
and we get back into a telephone booth and we ask how big would the telephone booth have to be
To get everyone in the world into it, the average person, I guess I'm 5'8", it's roughly the average person of the world and I'm, I don't know, a foot thick and maybe two feet wide and 5'8 tall and we, and now look, this telephone booth is going to get crowded and it's going to be smelly in about a minute and I'm not advocating that we do it, but if we did it, how big would the telephone booth have to be to fit all the people in it?
The answer is one mile cubic, a mile high, a mile wide, and a mile deep, and everyone could get into it, just one cubic mile.
Just to give you an idea of how few people there are, and there are these people saying, you know, there are just so many people and we're going to, I don't know, whatever.
Now, taking a long run view, one of these days if the government gets off our back, we're going to colonize the moon and Mars, and we're going to go to other solar systems,
and if you take a real long view the sun is going to go out one day, and we'd better be not only on other planets but other solar systems.
To do that we need more people. For every 10 million people you get one semi-Einstein or one Mises.
So the more people the better, if the human race is going to survive.
So what these people are doing is putting their heads in the sand and I'm offering a more open scenario.
Now, here is a ploy that I use when I debate people.
I remember using this and boy was I booed because it was a hostile audience and I said my opponent is going to come up to the podium here in about a minute
and he's going to tell you that we have too many people.
He has it within his power to reduce the size of the population by one.
But by the fact that he's sitting over there, I note that he hasn't done it.
See, he's a hypocrite. He's acting incompatibly with his own crappy theory.
Oh, boo, boo, you know, his, this is horrible, you know, you can't say that.
But it's true. The argument is intellectually incoherent.
It violates praxeological insight.
Namely, you can't non-contradictorily say there were too many people because you're alive.
If there were too many people, you should kill yourself.
Okay, I still have a few minutes for questions.
Anyone have any questions on this stuff?
Questions, objections?
Well, I've got more here and I don't want to...
Let me see if I've got anything else here.
Sure, as I said, you know, questions can be free-ranging on anything.
I'm still going back to the doughnut and the example you gave of something in the center of a landlocked property is a homestead in the X area.
A person in Y has to put up a sign saying there's this property here that's not homestead and they have to let people go through Y to get to X and homestead it.
Wouldn't that then hold true for any other kind of property and not just land and the garbage in your house and things that you don't want?
Well, I'm not sure I understand you, but see right now we have two dimensions.
Remember in the episode of the Simpsons where he put a big umbrella over the whole city so that everyone would have to pay him for electricity and there'd be no sunlight?
Well, he would then be precluding people in an upward direction.
You couldn't do it in a downward direction either.
But I'm not sure I understand what you mean by, in your house, keeping garbage.
Well, if you're not, I mean, if you have something you don't want in your house,
and it's kind of the same concept to be forestalling by not putting up a sign outside your house
and also not allowing an easement for people to walk through your house
and get this piece of property in your house that you don't want.
So, in other words, I keep garbage in my house and it smells up the neighborhood?
No, just that you keep garbage in your house that you don't want.
And so by keeping it in your house and not letting other people know outside your house,
you have the stuff in your house and you don't want it,
I'm not letting you do it and I'm not telling you it's there for stalling,
in the same way that person Y is keeping in effect this property X.
I see, I see, I see what you're saying. You're a nasty girl. That's a vicious reductio. That's, Adam?
No, no, no, it's not garbage. What it is, if I understand you correctly, I've got this bicycle. I'm just not using it.
But I'm not letting anyone else use it either. Don't I have an obligation to say, hey, here's a bicycle, come take it?
And I'm just sort of being mean, right?
Well, can we kick her out?
I mean, how dare you criticize me in an intelligent way?
No, I'm kidding. You know I'm kidding.
That's a very, very good point.
You must be a good chess player and a very bright person.
This isn't the first time you've got me good.
Let me see if I can wiggle out of this one.
See, what I'm saying, there's a difference that I can think of.
I don't know if it's a relevant difference that it'll satisfy you that it's relevantly different, but at least it's different.
See, the reason I'm all up on this X business, and it could be the Z because everyone could be in the X,
and now you're precluding everyone from the rest of the world, doesn't matter, goes both ways,
but my justification for this is that as nature abhors a vacuum, libertarian theory abhors something unowned.
Now, you have to concede to me that the bicycle I've got in my back bedroom is owned, or at least it was once owned, so it doesn't apply.
And if I want to keep the bicycle there, I'm getting some enjoyment from keeping the bicycle there, keeping it from all you good people, but it's different.
Now, I don't know that it's relevantly different, but at least it's different at a first shot.
In that example, I sort of see a parallel between having knowledge of something that you are not giving out to people, is that okay?
And from your earlier statements, you said that, of course it is.
So if you've got, say X is a mountain, Y is the area around the mountain, someone is homesteaded, Y,
and why and people would look up and you know people see the fence there and why
and they would assume that X is also homesteading but you know why isn't it going to tell them one way or the other?
You know whenever I'm introduced to a new person and they find out that I'm an economist they say well will the share of the stock go up or down or something?
And I say I don't know and if I did know I wouldn't tell you because I would take advantage of it myself.
If I really knew for sure, I would, you know, buy it and not tell you because you'd lower the price or, you know, lower the profit for it.
So you might try the reductio. Well, each of us has knowledge that we're not telling other people.
Do we have an obligation to tell the knowledge? No. Now we're getting into positive obligations, Bill.
And I think the same thing applies to the bicycle, but it was a real good try.
And I appreciate the thought that went into that.
Other questions? Did you already hand up Adam? No? I thought you did. Prem?
The problem I have with this scenario is that it seems like by saying that Y has a positive obligation to tell others that there is this un-owned, un-homestead land within the bounds of their property,
It seems to me that it's like Z has a right to X, but ultimately Z doesn't necessarily has a right to X.
It's simply that if they're able to get to X and it's not pre-owned, they can then own it.
But if no one owns X, no one necessarily has the right to own X.
Well, first of all, I would just correct you on a minor point.
I'm trying to get out of this positive obligation.
So I'm saying it's not a positive obligation.
It's rather inherent in the idea of homesteading and in the idea of property rights.
But that's a minor point. But on the major point, I do disagree with you. I think people do have a right to homestead, unhomesteadable, unhomesteaded land.
Everyone has a right to homestead, unhomesteaded land. Now the objection that Hans Hoppe and I have gotten into,
or the dispute that we've gotten into on immigration, is I say right now there's vast lands in Utah and Montana and in the West.
And suppose somebody came in from Bangladesh with a helicopter or he was a good pole vaulter, you know, he just sort of got there.
What law is he breaking by being there?
You see, I sort of share Hans' view about immigration.
I don't like being overrun by hordes of people who are going to engage in suicide bombing and stuff like that.
And I'd like to keep them out.
But I think the only way to keep them out is to first privatize every square inch of the U.S.
And then Hans' point kicks in, because then immigration is trespassed.
But as long as this one square inch of unowned land in the middle of Montana,
or in the middle of Nevada, and there's plenty in the middle of Nevada,
I can't see my way clear to agreeing that people who go in there and homestead it
are violating any libertarian law.
But as I say, these are tough issues, and we're out of time,
or should I, can I go a little bit more, or should I shut up?
Okay, two more questions. Stephen and him.
You may have addressed this in prior sessions.
Ignore the question, but what is either the most economically just or efficient way
You would advocate for privatizing the general resources that are either publicly owned or state land in Nevada or Montana or the oceans or the roads.
That's kind of a libertarian solution to getting from a state of public ownership to putting it in private hands.
You're a vicious fellow too. That's a very tough question.
And I would divide it into two. First is the unowned stuff, the middle of Nevada, I mean the government claims it but they never homesteaded it.
There I would say the first guy that parks himself in there and starts mixing his labor with the land, fixing up the cactus or whatever you do there.
That's easy. Then what do you do for the library? The Auburn has a library, it's a public library.
Well, if we had the God's eye view and we knew exactly from whence all the money came,
what you'd do is sell it or give a share of that library building in proportion to the taxes that went into it.
In other words, it would mainly be auburnians who would own that library.
The street here in front of the Mises Institute, what's the name of the street?
Magnolia, whoever paid taxes.
Now, if you couldn't find out who paid the taxes, then maybe based on the frontage,
Like the Mises Institute has 50 yards of frontage, so they own 50 yards over the total length of the thing, a share in the company called the Magnolia Company.
If you couldn't find that out somehow, what Margaret Thatcher did with the public housing was reasonably good.
Namely, you sort of throw up your arms and say, we don't know who owns this, but we know who's homesteaded it.
namely the people that are there right now, so they own it.
And that might be a good way to do the public housing, it would be very politically acceptable
because the people in the public housing are poor and black,
and if you just said, we'll give it to you, and now you can buy it and sell it to whomever you wanted,
and a market develops, all the poor people would be booted out of Manhattan,
as they should be, because what the hell are they doing there?
There's no room for poor people, and blacks happen to be poor, but that's irrelevant.
Manhattan is a fountainhead of wealth. You just can't have poor people.
The poor people have to come in from the suburbs or the Brooklyn or somewhere to clean the places or whatever.
There's a public housing development right next to Lincoln Center.
You know what Lincoln Center means in terms of real estate values.
And there they are paying $25 a month for their apartment. It's crazy.
So, another way is, there was this thing in British Columbia, the BCRIC, British Columbia Resources Investment Corporation,
where they gave five shares to every citizen of British Columbia in the company, the private company called BRIC.
So there are various ways of doing this, and it's sort of complicated, and there are different principles, but there's a hierarchy.
First, give it to the rightful owner. Second, if you can't figure that out, then this, then that.
And I'll have a bit more to say about this when I talk about reparations.
It's somewhat related.
You get me afterward. I'm not messing with you.
Thanks for your attention.