Ecology and Classical Liberalism

Since so many dead enders are using this site as their personal soap box to attack science, I figured I’d offer a small post on ecology and classical liberalism. The issue is filled with paradoxes.

The theory of spontaneous order first developed in the Scottish Enlightenment, especially by Adam, Smith, is the only theory rooted in the social sciences that has enriched the natural sciences. It provides the fundamental logic behind both ecological science and the theory of evolution - that order can arise “spontaneously” from independent actions channeled through impersonal systems of negative and positive feedback. Feedback in the market is via the price system. Feedback in nature is through successful or unsuccessful reproduction. In the human world ideas reproduce, develop or die. In nature organisms reproduce, develop or die. This isomorphic similarity is also the key to identifying the problems in harmonizing these orders.

There is a fundamental disconnect between feedback in human society and in the natural world because ideas reproduce, develop, or die at a much faster rate than human generations. Therefore human society changes much more quickly than the human genome. In the case of the market, human time preferences as reflected in the rate of interest gives the temporal reference for purely economic activity. Organisms that reproduce and adapt very rapidly can ‘keep up’ with human society – bacteria being the most successful. Slower natural processes are often at a serious adaptive disadvantage.

Now factor in the issue of scale. The human world has recently begun creating waste products that do not recycle easily into the biological community or deposit themselves harmlessly into the natural world (for example, as pottery shards did for thousands of years). When the scale of this waste production was small, it was not an issue. But as the scale has increased the potential for problems has grown accordingly. Global warming issue are one of several such cases.

Both biological processes and ideas liberate power and creativity. In the short run ideas liberate much more power and energy, in the long run biological processes provide the essential foundation for society to give ideas such power. We are dominant in the short run – nature in the long run. Hence over the long run it is vital that ideas not inadvertently undermine the biological support for their societies. Some societies succeed at this, some fail. Julian Simon was not always right – as the Anasazi and early civilizations of the Tigris and Euphrates could confirm.

Much of what is best about markets arises from their systemic characteristics – impersonal coordinating properties – rather than from a simple individualistic model of free exchange. This point is hardly denied by methodological individualism, but for less sophisticated interpretations of it this point is obscured. Individual exchanges generate the market system which then loops back to transform the context of further exchanges, and so on indefinitely. Markets would arise under any system of voluntary instrumental or partially instrumental exchange. At their most abstract level they are as impersonal as an ecology or evolution.

Harmonizing society and nature must occur in part at an equally impersonal level. Eliminating waste is the basic requirement, which means eliminating the capacity of people to leave significant negative externalities in their wake. Major negative externalities created by individuals are easy. Very small ones created by individuals that add up because there are many individuals are much more difficult to deal with. The language of property rights can easily encompass the problem – but institutions to make property right enforcement practical in this latter case are more difficult.

To give what I hope is a completely noncontroversial example, Missoula, Montana long had homes heated by wood stoves and fireplaces. But the city is located in a valley subject to winter temperature inversions. When Missoula was small this was not an issue. As it grew winter smoke trapped by the inversions made the air increasingly unpleasant to all and hazardous to some. Finally wood stoves and fireplaces were banned in new housing. Only an idiot would say this was unjust.

The logic underlying global warming is akin to this issue, but on a global scale. The same is true for other nonpoint pollution problems.

It seems to me most libertarians and other classical liberals are wedded to thinking of everything in terms of a state vs. market dichotomy, and so are reduced to denying these kinds of problems are significant because traditional market models are unable to deal very well with them. But institutions rooted in civil society may be able to address a great many of these issues (see Peter Barnes’ wonderful Capitalism 3.0 – start in the positive second part so you don’t get defensive with his critique of corporations in the first part). And for anyone who sees government as legitimately enforcing property rights, using its power to reduce negative externalities that cannot be reduced through traditional means of tort and injunction seems to me no theoretical obstacle at all. The practical issues are interesting – but can be creatively addressed only once someone is able to acknowledge a problem exists.

The irrational deniers of the growing judgment of the scientific community are reduced to alliances with fundamentalist lunatics like Sen. Inhofe because if they take the judgment of most scientists seriously they will have to rethink their fondly held beliefs. Like the Pope and Jupiter’s moons – theory trumps evidence no matter how otherwise persuasive that evidence may be. This attitude constitutes the greatest threat to the long term viability of many classical liberal insights in understanding the world. Ironically, they have chosen an evolutionary dead end rather than being open to new adaptation. It is a great pity because insights rooted in classical liberalism are desperately needed today.