Socialists like to say that capitalism causes environmental damage, and that under socialism no such thing would occur. They say that the motivation to maximize profits by capitalistic businesses causes them to cut corners with pollutants, such as the kind that dirties up our air and water – something they refer to as an externality. They say that under socialism, that would not happen because the government would be in control of that business, there would be regulations in place to stop that pollution, and socialist “planning boards” would make sure that production of goods and use of our resources would be done in a way that’s not environmentally harmful. But there’s a big problem with this argument – there’s nothing about it that’s true.
Cutting Corners for Profits?
Let’s take the idea that capitalistic, for-profit, businesses like to “cut corners” and pollute to save money to make more of a profit. There are two problems with this statement. The first problem has to do with how environmental factors are affected by the profit motive, and the second has to do with the legal system.
Let’s talk about the first problem. The argument has to do with the profit motive, and how it motivates businesses. Opponents to capitalism, like I already said, claim that the desire to maximize profits motivates businesses to cut corners, which hurts the environment. The problem is, though, that in reality, one of the best ways to maximize profits is to minimize use of resources, or to use waste material in ways that allow for more profits.
For example, a soft drink company figuring out how to use less aluminum in their drink cans is a way to reduce use of resources and maximize profits. A lumber company creating particle boards, that are created using sawdust, that formerly went to waste, is an example of using waste material in a way that brings more profit rather than letting that material go to waste. There are consultation businesses out there whose sole purpose is to help manufacturing firms find where they are wasting energy, and help them reduce their energy use, such as by replacing hot, inefficient motors with cooler, high-efficiency motors on their assembly lines – by helping the manufacturing firm reduce their energy use, they save energy, maximize their profits, and reduce their carbon footprint. Trucking companies will install devices so that they can keep track of how much the engine gets “revved up,” and coach drivers who don’t drive at lower RPM’s, all in an attempt to save fuel costs for the sake of maximizing profits. These are just a few of the multitude of different ways that for-profit businesses maximize their profits by minimizing their environmental footprint. When a company is wasteful with its resources and energy usage, or throws away materials that it could turn into another product, it’s losing money and throwing away potential profits.
Positive Image
Another thing that you need to think about is the fact that for-profit businesses maximize their profits by being on good terms with their customers and providing good customer service – that is, by presenting a positive image. If customers go away angry, they’ll most likely not come back, and tell other potential customers of the terrible experience they had with that company, meaning a loss of future customers. Businesses are driven by the profit motive to make sure their customers are pleased and happy, and complaints are handled in the best ways possible – they try to maintain good relations with their customers and community.
Being good to the environment is one of the factors that businesses use to maintain good relations with their customers and community. They know that if they do things that are harmful to the environment, people will become displeased and the community will turn against them – that’s no way to maximize profits, now is it?
Again, Cutting Corners for Profit?
“But wait! It does make sense that businesses try to maximize their profits by minimizing use of resources and energy, and minimize waste, which are all good for the environment. That’s all good. But there are also for-profit companies out there that do cut corners when dealing with their waste products, and the way they dispose of them causes environmental problems. Is there anything to be said about that?”
Actually, yes there is. Let’s talk about that potential problem.
It used to be that here, in the United States, the legal system was based on the individualist view of law. The idea was that the legal system was most importantly to be used to protect the life, liberty, and property of individuals. This included protecting their property from being harmed by another individual or entity, including businesses, which, of course, included environmental harm and pollution, because that damaged another’s property. It also included physical harm, such as harm to one’s health, as a result of another person’s or entity’s pollution. For example, if a factory owner polluted their air or a stream used by people in a community, and by doing so caused financial, physical, or emotional harm to members of that community, they would get sued for damages by people in that community, or by the community as a whole, and would almost always be found guilty, and have to pay some penalties. Such a legal system worked well for a long time and motivated businesses to make sure they didn’t harm the local community by causing pollution. I would deem this to be a sound legal system based on libertarian values that protected individual rights and property rights.
But then things started to change in the late nineteenth century. Socialism started to creep into our legal system. We started having more of a collectivist and less of an individualist mindset. The idea was that no individual or group of individuals should stand in the way of economic progress and growth that is beneficial to the entire community. The idea was that “the greater good” must happen, and we shouldn’t let a few victims harmed by pollution get in the way of, or interfere with, “the greater good.” That collectivist mindset that crept into our legal system started turning a blind eye to the pollution caused by businesses who no longer had a legal obligation, or financial incentive, to protect individuals or groups of individuals from environmental harm. When politicians on the political left think of pollution and environmental harm as an externality of a purely capitalistic system, they’re dead wrong – it’s really a problem based on a legal system that evolved to become socialistic and collectivist rather than individualistic and libertarian. This new legal framework allows capitalistic businesses to get away with things that they formerly were not able to get away with, because this newer socialistic legal setup turns a blind eye towards businesses in the name of “the greater good.”
You can read all about this transformation and evolution of American law from individualist and libertarian to collectivist and socialist in The Transformation of American Law, 1870-1960: The Crisis of Legal Orthodoxy – it’s a 2-volume treatise written by Morton J. Horowitz.
This new mindset made its way into the minds of many economists by the early 20th century. In 1912, a book named Wealth and Welfare was published and made the circuits around the economics community. This book was authored by a British economist named Arthur C. Pigou. He blamed pollution and environmental issues on capitalistic, for-profit businesses that, in the name of making more of a profit, and because there weren’t regulations in place, would cause pollution and other forms of environmental degradation, something refered to as a “capitalistic externality,” and this theory of where environmental problems come from has become the standard theory in many economic circles. It gave rise to the idea that there needs to be more rules and regulations on capitalistic businesses, and more taxes on the production of goods that cause pollution, such as steel manufacturing. These taxes are known as “Pigouvian taxes” in honor of Pigou. Many economists support these kinds of taxes, based on this way of thinking, as a way of reducing environmental and pollution problems based on capitalistic “externalities” by forcing businesses to cut back on their production of those goods.
Pigou believed that environmental and pollution problems would not exist, or would be small and unnoticeable, in a socialist economy. His idea was that in a purely socialist society, there would be some sort of planning board that would determine how all the production assets of society would work together for the benefit of all, and that this board of directors would take into account all the external costs of pollution and environmental issues. But, Pigou was wrong about all of this for two very important reasons – first, businesses are not prone to abuse the environment and cause pollution if there is in place a sound legal system that will hold businesses liable for any damages it may have caused on people and groups of people (like we used to have before collectivism started creeping into our legal system in the late 19th century), and second, if you read about countries that practiced socialism throughout the 20th century, you discover that they left in their wake environmental disasters and destruction that were unparalleled in the annals of human history. This would suggest very strongly that socialism is much, much worse for the environment than capitalism, especially capitalism under an individualist and libertarian legal system.
Private Ownership vs. Public Ownership
Now let’s get into a slightly different topic, but one altogether related to the subjects of capitalism, socialism, and the environment. It has to do with ownership. Capitalists believe in private ownership, while socialists believe everything should be publicly owned, that is, owned by the government who is responsible for determining how property is used, ideally, for the benefit of all. Socialists believe that if government owned our natural resources that it would better protect those resources than if they were in private hands. If all housing was owned by the government, they say, no one would be homeless, and they could do public housing in a way that was not detrimental to the environment. So, which idea is right?
The first thing I want you to think about is how people treat their own property vs. how property is treated when they don’t own it – I’m especially talking about expensive things like cars or homes. I want you to compare how car owners treat their car, as opposed to someone who is borrowing someone else’s car or renting a car – the car owner will take much better care of their car than the other person would. Same goes for home ownership – homeowners take much better care of their homes than renters do. Now why is this?
Public Housing
When it comes to housing, people who endorse socialism tend to support the idea of public housing. They frown upon the idea of people having to work hard for their home and purchase it with their own funds, something that to me represents enjoying the fruits of one’s own labor. But there’s a big problem with this approach.
When governments provide public housing to their citizens who they believe need housing, those citizens tend not to appreciate that housing; they instead take it for granted, and believe they have a “right” to that housing, that they’re “entitled” to it, and because of that, don’t take care of their housing. If you don’t believe me, here’s a story for you:
In the late 1990’s, I attended a church that had an interim pastor who was in his eighties at the time. He once told a story of something that happened back in the mid-1960’s when they first built the large-scale welfare housing projects in Chicago. He lived in the area at the time, and took advantage of an open house for the general public they had before they let people move in. The yards, he said, were nice and spacious – a nice place for the kids to play. The hallways were nice and clean, and the apartments he was able to see were spacious, clean, and fully furnished. He thought, “If anything would help these people get on their feet, it would be this.” He went away encouraged.
One year later he decided to return to the same high-rise apartment building he visited in the open house the year before. What he found turned his encouragement into discouragement. The yard was full of junk cars and destroyed appliances and old hypodermic needles. When looking at the structure, some of the windows had been broken out, and some had char above their openings denoting a fire. The hallways wreaked of urine, and occasionally an apartment door was open, allowing him to look inside. The inside of these apartments looked trashed and ransacked.
He went away that day learning an important lesson. His notion that you could change someone’s behavior by changing their environment was entirely wrong, and, in fact, was backwards; in reality, what lies in someone’s heart effects their behavior, and their behavior is what makes their environment good or bad. This was the lesson he learned that day. Being a pastor meant he was in a good place to change people’s hearts.
But there’s a second lesson to be learned here that has to do with socialism and the environment – specifically, using our resources to provide public housing for people. These people who receive public housing don’t take care of their housing like owners do. If people work hard and save up their money to buy property, or handle their finances in a way that allows them to have a good credit score that’s good enough to secure a home loan with an adequate down payment, then in both of these cases, they are strongly motivated to take care of their property, because it’s theirs, and it’s an investment. To these people, their own home represents the fruits of one’s own labor. People that are given housing by the government don’t appreciate and value that housing, but are taught that they are entitled to that housing; there’s no motivation for them to take care of it – in fact, they have no desire to take care of the place because, if they trash it, government will just give them a “new” place.
In other words, from the standpoint of protecting and preserving our environment, and not being wasteful with our resources, home ownership is the way to go, and public housing is, in reality, anti-environmental. If you believe we need to take care of our environment, and then you turn around and support public housing, you are contradicting yourself.
When you work hard for something, and spend your hard-earned money on something, you tend to value it and take care of it. You protect your investment. On the other hand, when someone is renting a home or a car, they really don’t care how they treat that property, because it’s not theirs – it’s someone else’s.
Using Government-Owned Property
The same goes for property owned by a business vs. property owned by the government and just licensed to a business to use.
For example, a lumber company that owns its own forest lands that it uses for making lumber will make sure that they manage their forests well. They will not over-harvest their own lands, but harvest at a controlled rate to make sure they have lumber supplies to sell every year, and make sure they replant new saplings on land just harvested so that when those new trees grow to maturity, that those trees on that land can be harvested again. They want to make sure that they can continue to be in business into the future, so they protect their forests. In fact, they may try to breed new hybrids that grow faster so they can be harvested quicker.
Whenever you hear about a lumber company over-harvesting land, and not bothering to plant new saplings, but leaving the land bare and denuded, it’s always based on the fact that they’re not harvesting their own lands – it’s always government-owned land that was licensed for use to that lumber company. They basically harvest that land, and run, since they have no self-interest in taking care of that land. Even if the government required that the lumber company plant saplings in the newly-harvested and denuded areas, many of these lumber companies that harvest government-owned land close up shop, or declare bankruptcy, without doing any replanting, in order to save money. Because it’s land owned by the government, and because the government is inefficient and slow to react, it often takes them a long time before they realize what happened to that land.
The same goes for ranchland out west. When a rancher owns his own land, he will make sure his cattle don’t overgraze, but will take care of his land, so that it’s available for his cattle to graze on into the future. Compare that to a rancher who is licensed to let his cattle graze on government-owned ranchlands; they will routinely let their cattle overgraze, not caring how it effects the land, because it is not their own land. For this reason, you will see the desertification process going on in western lands in the Intermontane region of the United States.
These are just a couple of examples that show how private ownership of land creates a strong incentive to take care of the land, whereas using the socialist idea of government-ownership of land, and letting businesses use it by licensing that land out, in the name of “the public good,” just causes environmental harm and destruction. Businesses had little incentive to take care of the land; it was the government’s job, and they are usually very slow and inefficient in their reaction.
Socialism brings to a nation and society a lack of private ownership, which means no commercial and self-ownership incentives to be good stewards of the environment, and at the same time, it stifles economic progress and innovation, the kind that brings about new technologies that allow us to take better care of the environment and reduce our use of resources.
Examples of Environmental Degradation Under Communist-Style Socialism
In fact, we saw this very truth played out over and over and over again in countries that went all-in on the communist-style socialist route, and were no-holds-barred on trying to stop every trace of capitalistic enterprising and of private ownership, such as the former Soviet Union and countries in Eastern Europe that were behind the Iron Curtain. We also see such problems today in socialist countries like Venezuela and China.
Many of these environmentally devastating examples of socialism were not known to the western world until the Soviet Union collapsed around 1991, and brought down with it socialism in Eastern Bloc countries like East Germany, Poland, Czechoslovakia, and the republics that were formerly part of the Soviet Union.
Before I get to some examples, let’s ask a question: Why did this environmental destruction take place, and on the scale that it did? The answer lies in the size and scale of ownership. When a property is owned communally on a small scale, such as you might find in the United States with a neighborhood homeowner’s association, or in a kibbutz in Israel, at least the scale is small enough that everyone in the community can be a check on each other and make sure there’s not some kind of environmental abuse going on. But when property is owned communally on a large scale, and controlled by a distant government, who treats that property as a free resource to be used for the benefit of all, abuse of that property always seems to happen because of several factors that we already touched on – there’s no pride of personal ownership that motivates one to take care of their property, there’s no motivation to make a profit, and there’s no motivation to simply maintain that land and its resources so that it can be used by future generations. People in those societies simply look at that property as something to be used now. There’s no consideration of the future.
This is why there was such a large amount of environmental destruction and degradation in the former Soviet Union. You can read all about it in Ecocide in the USSR. If you think we have environmental problems in the capitalist west, it doesn’t even compare to the level of pollution and degradation found behind the Iron Curtain.
Here are some examples:
- Exploitation of the resources around the Black Sea, of gravel and sand for construction purposes, and of surrounding forests for lumber, caused erosion of epic proportions to take place, which caused the Black Sea to lose half of its coastline.
- Water pollution across the Soviet Union was epic. For examples, many passenger ferries on Russian rivers warned their passengers not to throw their cigarettes overboard because it might catch the river on fire. Remember reading stories about the Cuyahoga River in Cleveland, Ohio catching fire in 1969, which helped spawn the environmental movement in the US? Well, it was like that, except much, much worse. In our case, it led to new public awareness of environmental problems and pollution that helped make our rivers cleaner (also thanks to a free press that brought national attention to this matter); in their case, the catastrophe went on all over the country for several decades. Not only that, but the massive amounts of pollution caused massive fish kills across their major rivers as well.
- At one time, the Aral Sea (pictured above) was the fourth-largest freshwater lake in the world. Because of massive irrigation projects in the Soviet Union, the sea shrank. Today, it is about 1/10th of its original size. The larger southeastern portion has dried up completely, is covered with salt flats, and is now called the Aralkum Desert. This has been called “one of the planet’s worst environmental disasters.”
- The Volga River in Russia, which is the longest river in Europe, at 2,295 miles, or 3,694 kilometers, long, has for decades had billions of cubic meters of waste products pumped and dumped into it, including oil byproducts, pesticides, and heavy metals. There’s also the fact that there are around 3,000 sunk oil tankers, cargo ships and passenger ships on the bottom of the river, that the government just abandoned, that could be seeping oils and fuels into the river. This pollution was ignored for decades by socialist authorities, and this socialist legacy continues on to this day.
- Lake Baikal in eastern Russia’s Siberia became horribly polluted, and one of the primary culprits was a paper mill that dumped waste product, full of bleach for making paper white, into Lake Baikal. Raw alkaline sewage could be seen floating in the lake; one such reported floating island was 18 miles long. The sewage gave local air a putrid stench. Deforestation without replanting saplings in place of trees that were cut down led to erosion and dust storms.
- Poland suffered from levels of acid rain that caused erosion of railroad tracks, forcing trains to not run any faster than 24 MPH, or 40 kph. The air pollution that caused the acid rain caused many people to get chronic lung disease, especially in the heavily-industrialized Katowice region of Poland. Even as life expectancy was rising in much of the world where capitalism was being practiced, it was falling for men living in Poland.
- By the time communist-style socialism collapsed in Czechoslovakia in 1991, its leaders proclaimed that they believed their country to have the worst environment in all of Europe. There were many barren and denuded hills, devoid of any plant life, in Bohemia, where hundreds of thousands of acres of forest disappeared due to extreme pollution. The northern parts of Czechoslovakia had a sky that had a thick brown haze for much of the year, and much of the country’s groundwater was poisonous and toxic, rendering it undrinkable as a result of pollutants getting into the water.
- East Germany had many similar environmental and pollution problems. According to studies done in the 1980’s, 1/3rd of all lakes were biologically dead, 1/5th of all trees in their forests were dead, residents in many cities had to use their headlights even during the day, and visitors would be so disgusted by the stench that it would cause them to vomit – all because of the extreme amount of pollution.
- If you do some research, you’ll find similar stories about pollution and environmental harm that was done in other Eastern Bloc countries such as Bulgaria, Romania, and Yugoslavia, during the socialist era.
These are just a few of the numerous examples of the type of extreme pollution found in Eastern Europe where communist-style socialism was practiced.
Communist China
The same type of socialist-inspired pollution found under Eastern Bloc countries in the past can be found today in China.
Although China has come a long way in terms of liberalizing its economy to allow for capitalism, free-market competition, and even some semblance of private ownership, it allows these things under the auspices of state socialism, so they still have the collectivist mentality that a few people, a few victims, shouldn’t get in the way of general progress for all. This mentality allows China, like the former Soviet Union did, to head down the same road of environmental destruction as its predecessor.
For example, according to some sources, by the early 1990s more than 90 percent of the pine trees in the forests of China’s Sichuan province had died from air pollution. Air pollution and acid rain has led to deforestation as trees are killed by the toxic water and air and has also led to massive crop destruction in parts of the country. Depletion of government-owned forest land has resulted in desertification, and millions of acres of grazing land in the northern Chinese plains has been made alkaline and rendered unusable. According to a 2007 CBS News report, 16 of the world’s 20 most polluted cities at the time were located in China. We see pictures of heavily-smog-bound cities in China on the news and other media sources all the time these days.
Democratic Socialism
If you think things are better for the environment under democratic socialism today, you’re wrong.
You’ll find that government-run enterprises are just as inept, and harmful to the environment, under democratic socialism today, just as they are under autocratic forms of socialism in the past.
Democratic Socialism in Venezuela
Just take a look at Venezuela. Most of the natural resources over most of the country are government-owned, which means that there is a lack of private property rights over them, including the motivation and incentive to manage those resources well, as comes with private ownership. On top of that, there are not privately owned oil companies in the country competing for customers, and managing their resources well, but all oil resources, refineries, extraction and delivery infrastructures, etc. have, at some time in the past, been confiscated, taken over, by their government and united into a single, government-owned, nationalized oil industry that goes by the name PDVSA.
Because of the way things are set up in the country, they have environmental problems much worse than you would find in a country practicing capitalism and private ownership. For example, they are losing forest at twice the rate of other South American countries, including Brazil with its massive Amazon and Pantanal regions.
Their Lake Maracaibo is heavily polluted with toxic chemicals such as mercury, as well as human sewage. There are about 2 million people that live around the lake, and with no sewage plants to treat that sewage, it all goes into the lake at a rate of more than 10,000 gallons per second. And this is on top of the more than 800 companies that are allowed to dump industrial waste into the lake as well. A similar story, although on a smaller scale, can be told about Valencia Lake that sits farther east in the country.
PDVSA, their government-run, nationalized oil company, has more than 15,000 sludge pits where waste from oil wells sits, slowly leaking into the ground, and will no doubt, over time, seep into the ground water, rendering most of the country’s water supplies poisonous and toxic.
Comparing Capitalism to Socialism in Mexico
Several years ago, British Petroleum (BP), a privately-owned corporation, because of the Deepwater Horizon explosion, caused an oil spill in the Gulf of Mexico. It immediately established a $20 million fund to pay for damages and to help clean up the mess its company made. It had legal obligations to clean up its own mess. Because it was a private corporation separate from the government, it was much easier to bring legal recourse against it. It was also strongly motivated and incentivized to take care of the situation as quickly as possible, because it had to fend for its corporate reputation to its customers.
Compare this to Pemex, Mexico’s nationalized, government-owned, oil company that, to me, represents socialism. In 2015 alone, Pemex was responsible for three catastrophic environmental tragedies, which resulted in several deaths, other injuries to workers on the oil platforms, as well as air and water pollution. Pemex denied that they caused any oil spill, and this is despite the fact that satellite imagery proved that an oil slick 2 1/2 miles long was created in one of the instances.
When the media tried to shed light on these events, the Mexican government tried to silence and censor any media reports that exposed the oil spills caused by the explosions. The argument was that the oil industry was in the “public good” and that negative media reporting would hinder progress that benefited everyone.
If you were in some way victimized by the explosions and oil spills caused by Pemex, you had no legal recourse. Why? Because Pemex is owned by the very same government that you would need to turn to in order to get justice for being a victim, you’ll find that you won’t get it because Pemex claims “sovereign immunity” from any legal damages brought upon it. Besides, the argument is that a few individuals shouldn’t stand in the way progress for all. Government ownership, in this case, is not just bad for the environment, but seems to make it very difficult to bring justice to those victimized by those government-owned businesses.
This comparison between capitalism and private ownership vs. socialism and government ownership makes it very clear to me that the first path is the better way to go when it comes to caring for our environment.
Conclusion
So, what have we learned today? We learned many things. A good, sound libertarian legal system, based on individualism and property rights, helps protect people from environmental harm, whereas a legal system based on collectivist and socialist ideas doesn’t. For-profit businesses have an incentive to be conservative with their resources and energy use to save money vs. government-run monopolies, which are downright wasteful. Property owners take care of their property much better than property owned by someone else, including the government. Socialist policies bring environmental destruction unparalleled by anything else, including capitalist policies. And if you still doubt the detrimental effects of socialism on the environment, we have more than a century of countless examples of environmental atrocities that took place under the auspices of socialism.
In other words, if you care about the environment, but support socialism, you really are working against yourself.
