Wednesday, 31 October 2007

The environment and liberalism

Joe Otten recently summarised the various chapters of Reinventing the State: Social Liberalism for the 21st Century (aka. the Huhne Manifesto?). Joe has generally been sympathetic to the “Social Liberal” argument, though as a member of the Sheffield Hallam constituency party one should not take his views on any particular issue for granted.

The focus of Joe’s attentions is liberal environmentalism, so the environment chapter in that book was bound to peak his interest. I’m not going to repeat Joe’s summary here, but I am going to raise three points that I made in response to his post.

Firstly, too many environmentalists are willing to throw away progress – both material and political. This is partly because of a misguided belief that environmental degradation is an inevitable consequence of economic growth, itself an echo of long-standing Romantic critiques of the Enlightenment and the fear of progress and change. Just as population growth did not exhaust our capacity to feed the people or increase their material wellbeing, so it does not automatically have to toast us in an ever-hotter atmosphere. There are alternative means to generate energy and there are technological solutions to rising levels of CO2. Those who want to halt or reverse economic growth are usually fired by either a combination of a Romantic and a quasi-religious view of an Arcadian alternative, or by other ideologies that have found an new justification in environmental extremism.

Secondly, the critique of the focus on economic growth statistics is correct, but only so far. It is true that growth statistics are not particularly useful or enlightening, but there is no doubt that over time we live demonstrably better lives as our economy expands (Layardian happiness research not withstanding). Indeed, much economic growth new results from services rather than manufacturing, which are often (though not always) low-carbon activities. (As an interesting aside, try finding a verb to apply to economic growth that is not a metaphor for either power or transport!). One obvious except is transport, but this highlights one fundamental difference between liberal and Green environmentalism. The Greens want to discourage travel; liberals seek more environmentally friendly transport. At the core of this is the liberal belief that mankind can shape a better future and the Green nihilism that sees humanity as a negative influence upon the planet.

When Greens (which I use here to refer to authoritarian and fatalist environmentalists rather than the Green Party, though there is obviously a huge overlap) criticise modern society, they often accuse it of concentrating on the “bottom line” to the detriment of everything else. This is a critique they share with socialists. It is pure guff. Take our supposedly “Capitalist” society as an example. Taxes are inherently harmful to labour, to profits and to economic growth, yet we tax profits and labour very heavily precisely because we put short-term welfare gains above long-term welfare gains. Similarly, we burden businesses with regulation because we consider other factors (notably but not solely environmental ones) to be of importance alongside wealth creation. I have argued before that we over-regulate and over-tax, but neither I nor anyone I know suggests we should have no regulation and no tax; profit is only one driver in society.

The key is to set rules that clearly guide everybody and lead them to make sensible decisions about the environment. This is traditional liberal ground, if slightly re-emphasised. The value of the environment is not inherent but comes from the fact that it sustains us and gives us pleasure; consequently our impact upon the environment impacts upon the freedom of others (the quality of your life being reduced if I pollute the public spaces). This is classical liberal stuff, and the solutions can be equally liberal. We need clear rules that apply equally to all and do not discriminate: for example, we should tax petrol and congestion rather than cars; we should tax aircraft fuel rather than passengers; and we should tax the carbon produced in electricity generation rather than banning incandescent light bulbs.

The point is that dictating to people how must they lead their lives will inevitably lead to arbitrary decision making that will be partisan and will miss the target (e.g. penalising those who buy big cars even if they don’t drive them very much). It will also cause a huge backlash: nobody likes to be told what to do, let alone told to feel bad about what they have been doing for years, which is why there is such a strong anti-environmentalist movement. The Greens have brought it on themselves (and the rest of us).

By comparison, factoring into the price of things the ecological as well as production costs (“capturing the externalities”, as I said on Friday just one second before I lost my audience) will enable government to reduce overall emissions, while allowing individuals to decide how much emitting is worth to them. That ensures that those who value emitting most can emit at a price, while those who value it less will emit less. Economically this results in an optimal distribution of resources (in this case, the limited capacity the earth has for more greenhouse gasses); socially this creates a free society where everybody is then free to pursue a better life as long as it is not at the expense of others.

Surely that’s a liberalism on which we can all agree.

12 comments:

Joe Otten said...

While I agree with what you say, Tom, I don't think this is the whole story. At least it will be hard to convince anyone that it is the whole story.

What pigovian taxes and subsidies do in capturing externalities, is influence commercial choices the correct amount. Their influence on personal choices is still good, but is less clear.

But there remains social choices to be made. For example, how much do we prefer one kind of land use policy over another if it gives us a more pleasant environment? The answer to this question may affect the rate of some pigovian taxes down the line, but it is still a question we have to answer first.

Tristan said...

The term 'social choice' appears to be nonsense to me.

Society cannot make a choice, only individuals can. When people start acting for society or trying to work out what society 'believes' you end up with arbitrary decisions and the tyranny of the majority with the ensuing loss of personal freedom.

Quite how you internalise people's value of a location I'm not sure, but as a start if people like the area as it is sufficiently, land would be expensive discouraging the use of it for damaging purposes (how would LVT affect the situation though? I suppose it depends upon what the most economically efficient use of the land is...)

Joe Otten said...

Tristan, you speak as if LVT is manna from heaven, but it can only be introduced by some sort of social choice. The same goes for the protection of property rights, enforcement of contracts, and all the other institutions that make capitalism possible.

Tom Papworth said...

Joe,

I don’t see why pigovian taxes fail to affect personal choices. Some people may ignore (or rather bare) the taxes, but at the margin people will be discouraged so it will work in aggregate. Of course if one has other (“social”) motivations as well it becomes diluted and also leads to arbitrary policymaking. As somebody said to me on Friday, “If we just tax plastic bags, it means rich people will be able to use them while poor people can’t,” to which I replied “I don’t really care as long as fewer bags are used.”

As for what kind of usage we like, I agree with Tristan. “Social choices” are just a collection of individual choices that have acquired a critical mass and can thrust aside a smaller group of individuals. That is exactly the kind of policy making that pigovian taxes are trying to avoid; otherwise, why not just ban what the majority dislikes and impose what it approves of?

Tristan,

LVT is perfectly compatible with this. If one is prepared to pay the full best-commercial-use rate, one may put it to whatever actual use one sees fit.

It is perfectly reasonable to create a massive parkland, but not at the expense of other people’s housing. LVT resolves this problem by establishing the “cost of land” and then leaving individuals free to set the “use of land”.

Joe Otten said...

Tom, Tristan, if the decision to introduce pigovian taxes is not a social choice, what kind of choice do you think it is?

How dare you thrust aside the smaller group of individuals who think the environment is worthless and object to any value being imputed to it in this way by the tyrannical majority?

This argument leads to anarchy, of course. At some point the "non-initiation of force" principle will usually be invoked as a last ditch attempt to avoid the complete slide into anarchy. I doubt it would stick to be honest, it is not really a coherent part of libertarian philosophy, more an afterthought to make it appear non-monstrous.

Anyway, I consider your pissing in my drinking water to be an initiation of force, and you don't. So where does that get us?

Joe Otten said...

Oh and by the way, I thought I was mostly demolishing the arguments in Reinventing the State.

I am sympathetic to the values of the social liberal. (Largely I share them, except where they turn woolly.) What I object to is when they see these values as grounds to attack economic liberalism.

You guys are in danger of losing me this argument I am making in defence of economic liberalism.

Tristan said...

These choices are political choices. They are made by politicians. True the context in which they gained power influenced the choice to do it, but they cannot be called choices made by society.

Other institutions come about without conscious choice - property rights are a good example of this, nobody has said 'there will be property rights' yet they exist.

Tom Papworth said...

Joe,

I’m really not interested in the argument between “economic liberalism” and “social liberalism,” both of which I consider to be unhelpful phrases that have done more to divide liberals than cast light on the subject.

The difference within the social choices that you describe is between setting broad principles for society (freedom of expression; protection of property rights) and limiting the choices individuals may wish to make (buy a large car, fly to Newquay).

The debate is between whether one wants a free society, where general principles apply that allow individuals to lead their lives free from coercion, or whether one wants a society where interest groups (environmentalists, Christians, the temperance brigade) can use the rules to force others to follow their prejudices. I think it is a very coherent part of libertarian philosophy.

You present the problem as a zero sum game (either I do not urinate of you drink polluted water). The aim is surely to create a positive sum outcome (you get clean drinking water; I get a sewer) with as little coercion as possible.

Joe Otten said...

Tristan, to clarify, there are two meanings of the word 'right'.

A legal right is claim that is recognised and protected in law and by society. A moral right is one that morally ought to be recognised and protected in law and by society.

Moral rights to property exist - at least according to moral realists like myself. Legal rights to property are, contrary to what you suggest, the creation of human societies.

Joe Otten said...

Tom,

I'm not presenting anything as a zero sum game. Again, I largely agree with what you say.

What I am getting at is that certain social choices are inescapable - including whether or not to protect drinking water. It is no good, as Tristan seems to do, to dismiss all social choices as evil, and then turn around and assert the few social choices one would support - such as the protection of property - as not just a natural right, but some kind of natural law.

None of this justifies coercion. Coercion is a wrong social choice. The price of freedom is eternal vigilance, not throwing away the possibility of good social choices.

Off for a day or two now, I'm not ignoring you.

Tristan said...

Rights are a creation of societies - or rather of the interaction between individuals - I agree with that.
What I disagree with is the concept of a social choice. Only a person can make a choice, a society cannot.

In the case of property rights, nobody made a choice to have these rights.

Tom Papworth said...

I don’t think that Tristan is suggesting that social choices are ‘evil’. I think he is suggesting that they are no more than the sum of their parts; a collection of individual choices made my all within society. For example, we all agree to accept freedom of speech, and consequently have to tolerate rudeness and ignorance, because we recognise that society benefits from it. However, these ‘social choices’/norms must by nature be basic and fundamental if the whole of society is to buy into them. Thus freedom of speech and property rights are fundamental norms whereas raising VAT on gas-guzzling cars is not.

That being said, it is entirely possible to have a broad principle of respect for the environment; in fact, I would argue that there is such a principle, broadly agreed. The debate is about how to codify it without infringing on other principles, such as freedom of property and the norm that the law should not be arbitrary. Pigovian taxes do that; a lot of current environmental measures do not.

But you’ve left now, so I’m talking to myself!