Re: ECON: "Unsustainable Predictions"

From: Technotranscendence (
Date: Fri Apr 06 2001 - 21:03:42 MDT

On Thursday, April 05, 2001 4:37 PM Hal wrote
> > Given pressure from consumer/voters, for example, the temptation for
> > government is usually to overutilize a good. That is why people are
> "loving"
> > national parks to death and why subsidized sugar farmers in Florida have
> > been systematically destroying the Everglades. In both cases, the price
> > system is subordinated to political distribution of goods, and the
> > is always predictable.
> I don't know the whole story about the sugar farmers and the Everglades,
> but I doubt that the free market would protect a bunch of stinking
> swampland. The only way to make money off it would be tourism and
> charity, and the demand won't be large enough to protect the vast expanses
> of the Everglades. So someone pushing free market solutions is a bit
> hypocritical if they imply that markets would save the Everglades.
> They'll save a little piece of them, a DisneyGlades with swamp rides,
> but not 5000 square miles.

What would most likely have happened under a free market is NOT that someone
would go out of their way to protect swamps -- though individuals and groups
certainly wouldn't be precluded from buying up and protecting it
themselves -- but that the cost would be too high to develop. Investments
would go elsewhere.

We see this with the lumber, mining, and farming industries elsewhere, e.g.,
in the American Southwest on the last. There, government supplied water,
roads, and power has made it cost less to farm basically crappy land.
Without government subsidization, I don't think anyone would bother -- at
least not in huge enough numbers to have much of an environmental impact.
(Ditto for Israelis farming the Negev Desert and around the Dead Sea. Ditto
for Arabians growing wheat.)

With the lumber industry, government built roads as well as the leasing
system make it profitable for these companies to strip forests. If the
government did not build the roads and otherwise subsidize the industry,
these companies would feel the full cost of their activities. Also, any
rise in wood prices would help the market to find substitutes or more
efficient means of supply.


Daniel Ust

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