James Surowiecki reviews The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet by Indur M. Goklany in Foreign Affairs
Free markets and free people are, to be sure, wonderful things. But what Goklany offers up in his book is a fundamentally deterministic take on the world: as countries get richer and more technologically advanced, their citizens (all, or almost all, of them) naturally get healthier and better educated, eat better, live longer, and care more about the environment. The free market, recognizing people’s resulting desires, delivers the goods they want.
The environmental transition hypothesis is the most striking example of this view, since it postulates that environmental improvement happens, as it were, naturally. The reality, of course, is that the fight over environmental regulation, at least in the United States, was — and remains — a fierce one and that environmental skeptics and businesses have done their best to prevent regulations such as the Clean Air and Clean Water Acts from ever becoming law. It is also the case that without those regulations, the “cleaner planet” Goklany sees today would not exist. Goklany attempts the argument that air and water pollution in the United States were declining long before regulations were put into effect. Unfortunately, his own evidence shows that emissions for a host of pollutants peaked right around 1970, when the Clean Air Act was passed, or after, and myriad studies demonstrate that the United States’ rivers and lakes are dramatically more swimmable and fishable today than they were before the Clean Water Act.
The point is that far from being the inevitable product of a strong economy, environmental improvement is often the result of political struggles that could very easily have gone the other way. It is also unlikely to occur in the absence of a strong state that is accountable to its citizens. Yet Goklany’s entire work — perhaps not surprisingly for someone at the libertarian Cato Institute — is predicated on the idea that the state mostly functions as an obstacle to the benevolent workings of the market. This assumption is especially peculiar in the context of a discussion of pollution, since economic theory tells us that polluters, in the absence of regulation, have no reason to take the costs of their emissions into account. Pollution is the quintessential case of a negative externality and, accordingly, of market failure: since polluters do not pay the cost of their pollution, they will produce more than is socially optimal even if they may reduce their emissions as a byproduct of improvements in overall efficiency. The only way, ultimately, to reduce pollution is to constrain polluters to do otherwise.