 First edition | |
| Author | Terry L. Anderson and Donald R. Leal |
|---|---|
| Publisher | Pacific Research Institute for Public Policy |
Publication date | 1991 |
| ISBN | 0936488336 |
Free Market Environmentalism is a book by Terry L. Anderson and Donald R. Leal that was of great importance to the free market environmentalist movement.
The book focuses on a method of environmental protection with minimal bureaucratic intervention. Anderson and Leal argue that free markets have been making the environment cleaner for centuries and that private innovations, such as the energy consumption of cars, are more effective than government intervention. The book contains a number of case studies where juries recognize that a company is harming an individual and grant appropriate reparations. The central argument is that property rights, which are resolved through a direct transfer of payments between parties, are more effective as a form of environmental protection than government intervention through taxes. [1]
The book was intended as an ideological tract and a call to action, rather than as an empirical study. Glenn Fox of the American Journal of Agricultural Economics lauded the book for its readability and described its reference list as "one of the most comprehensive offerings currently available in this area." [2]
John A. Douglass of Forest & Conservation History praised the book for presenting the possibility of replacing zero-sum contests between industry and conservationists with markets that would allow for mutually acceptable arrangements. However, he also criticized the book as having a narrow assessment of environmental values and various policy options, and not weighing historical facts carefully. [3]
David Pearce of The Economic Journal criticized the book for, in his view, not presenting a persuasive argument for tradeable permits, inasmuch as only one significant example of their application to water quality, and that a not very successful one, was cited. Pearce also criticized the book for not explaining how liability rules would work when pollutants are pervasive and synergistic. [4]
In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any other external authority. Proponents of the free market as a normative ideal contrast it with a regulated market, in which a government intervenes in supply and demand by means of various methods such as taxes or regulations. In an idealized free market economy, prices for goods and services are set solely by the bids and offers of the participants.
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.
In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's activity. Externalities can be considered as unpriced goods involved in either consumer or producer market transactions. Air pollution from motor vehicles is one example. The cost of air pollution to society is not paid by either the producers or users of motorized transport to the rest of society. Water pollution from mills and factories is another example. All consumers are made worse off by pollution but are not compensated by the market for this damage. A positive externality is when an individual's consumption in a market increases the well-being of others, but the individual does not charge the third party for the benefit. The third party is essentially getting a free product. An example of this might be the apartment above a bakery receiving the benefit of enjoyment from smelling fresh pastries every morning. The people who live in the apartment do not compensate the bakery for this benefit.
Ecological economics, bioeconomics, ecolonomy, eco-economics, or ecol-econ is both a transdisciplinary and an interdisciplinary field of academic research addressing the interdependence and coevolution of human economies and natural ecosystems, both intertemporally and spatially. By treating the economy as a subsystem of Earth's larger ecosystem, and by emphasizing the preservation of natural capital, the field of ecological economics is differentiated from environmental economics, which is the mainstream economic analysis of the environment. One survey of German economists found that ecological and environmental economics are different schools of economic thought, with ecological economists emphasizing strong sustainability and rejecting the proposition that physical (human-made) capital can substitute for natural capital.
A Pigouvian tax is a tax on any market activity that generates negative externalities. The tax is normally set by the government to correct an undesirable or inefficient market outcome and does so by being set equal to the external marginal cost of the negative externalities. In the presence of negative externalities, social cost includes private cost and external cost caused by negative externalities. This means the social cost of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not efficient and may lead to over-consumption of the product. Often-cited examples of negative externalities are environmental pollution and increased public healthcare costs associated with tobacco and sugary drink consumption.
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. A CBA may be used to compare completed or potential courses of action, and to estimate or evaluate the value against the cost of a decision, project, or policy. It is commonly used to evaluate business or policy decisions, commercial transactions, and project investments. For example, the U.S. Securities and Exchange Commission must conduct cost-benefit analyses before instituting regulations or deregulations.
Douglass Cecil North was an American economist known for his work in economic history. Along with Robert Fogel, he received the Nobel Memorial Prize in Economic Sciences in 1993. In the words of the Nobel Committee, North and Fogel "renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change."
Free-market environmentalism argues that the free market, property rights, and tort law provide the best means of preserving the environment, internalizing pollution costs, and conserving resources.
Eco-capitalism, also known as environmental capitalism or (sometimes) green capitalism, is the view that capital exists in nature as "natural capital" on which all wealth depends. Therefore, governments should use market-based policy-instruments to resolve environmental problems.
In economics, the Jevons paradox occurs when technological progress or government policy increases the efficiency with which a resource is used, but the falling cost of use induces increases in demand enough that resource use is increased, rather than reduced. Governments typically assume that efficiency gains will lower resource consumption, ignoring the possibility of the paradox arising.
William Jack Baumol was an American economist. He was a professor of economics at New York University, Academic Director of the Berkley Center for Entrepreneurship and Innovation, and Professor Emeritus at Princeton University. He was a prolific author of more than eighty books and several hundred journal articles. He is the namesake of the Baumol effect.
The Property and Environment Research Center (PERC), previously known as the Political Economy Research Center, is a free market environmental think tank based in Bozeman, Montana, United States. Established in 1980, PERC is dedicated to original research on market approaches to resolving environmental problems.
Paul Davidson is an American macroeconomist who has been one of the leading spokesmen of the American branch of the post-Keynesian school in economics. He has actively intervened in important debates on economic policy from a position critical of mainstream economics.
The Poverty of "Development Economics" is a 1983 book by Deepak Lal. Adam Szirmai notes that this book "summarised and popularised much of the earlier criticisms on the dominant paradigm" in development economics and that it "was an influential publication which contributed to the enormous shift in thinking about development." The dominant paradigm that he was criticising is described by Lal as the "dirigiste dogma". However, this has been criticised with claims that Lal overstated his case claiming that those he criticised had wanted to "supplant" rather than supplement the price and market system, but that he failed to provide evidence for this.
Enviro-Capitalists: Doing Good While Doing Well is a 1997 book written by economists Terry L. Anderson and Donald R. Leal. In this book, Anderson and Leal further developed the concept of free-market environmentalism, which they first described in their 1992 book Free Market Environmentalism. The book argues that privatization of sectors like wildlife conservation, aquatic habitat development and environment-friendly housing is beneficial and environmental protection should be done by private entrepreneurs, not by the federal government. Enviro-Capitalists received the 1997 Choice Outstanding Academic Book Award.
Richard Lyndell Stroup (1943-2021) was a free-market environmentalist and emeritus professor of economics at both North Carolina State University and Montana State University. He was co-founder of the Property and Environment Research Center (PERC) and a senior fellow. He was also a research fellow at the Independent Institute, adjunct scholar of the Cato Institute, and a member of the Mont Pèlerin Society. At Montana State University, he served as head of the Department of Agricultural Economics & Economics from 2003 to 2006. Stroup was director of the Office of Policy Analysis in the U.S. Department of the Interior from 1982 to 1984.
Terry Lee Anderson is an academic and author primarily focused on the intersection of economic and environmental issues in America. Anderson's works argue that market approaches can be both economically sound and environmentally sensitive. Influenced by the Austrian school of economic thought, his research helped launch the idea of free-market environmentalism and has prompted public debate over the proper role of government in managing natural resources.
Robert Stephen Pindyck is an American economist, Bank of Tokyo-Mitsubishi Professor of Economics and Finance at Sloan School of Management at Massachusetts Institute of Technology. He is also a research associate with the National Bureau of Economic Research and a Fellow of the Econometric Society. He has also been a Visiting Professor at Tel-Aviv University, Harvard University, and Columbia University.
Andrew Donald Roy was a British economist who is known for the Roy model of self-selection and income distribution and Roy's safety-first criterion.
Gary Don Libecap is a Distinguished Professor at the Bren School of Environmental Science & Management and Distinguished Professor of Economics at the University of California Santa Barbara. Libecap is a research associate at the National Bureau of Economic Research; a senior fellow at the Property and Environment Research Center, and a member of the Research Group on Political Institutions and Economic Policy, Harvard University. He was the Erskine Professor at the University of Canterbury, New Zealand, 2019; Pitt Professor of American History and Institutions at Cambridge University 2010–11, and was previously the Anheuser Busch Professor of Entrepreneurial Studies, Economics, and Law at the University of Arizona.