The River: Public Policy or Private Responsibility?

What is common to many is least taken care of, for all men have
greater regard for what is their own than what they possess in
common with others. 

—Aristotle

The idea of aspects of the natural world being "privately owned" strikes as rather crass to most people and perhaps with some good reason as it brings to mind a vision of heartless mercenaries sacrificing nature to the pursuit of profit. Industrialists, we are led to believe, can only possibly view nature as a means to and end rather than an end in itself, and in doing so reduce it to a disposable commodity.

However, this prevailing assessment does not take into the equation the fact that true ownership is attended by responsibilities to which an owner must be held accountable. Where rights entail responsibilities (as they have in the past under common law), and these responsibilities are enforced, the claim to a property will serve naturally as an incentive to conserve that property. In effect owners will become custodians.*

* (The words "ownership" and "property" have perhaps simply taken on negative connotations synonymous with exploitation for various historical reasons, and so it is essential in order to dialogue on these topics that we make explicit the fact that our definition of ownership is one that not only entails property rights but property responsibilities.)

Most people presume that government must fulfill the role of protecting the natural world, but this arrangement throws up some rather dubious incentives. When governments write policy documents about rivers, lets say, they tend to be for the purpose of  delineating who is allowed to exploit the river, on what terms, and in what measure. Special favours can always be handed out to cronies or campaign contributors; to “stimulate local business”; or for any other political ends that might attract short term support for office-holders regardless of the long term consequences. The rights to log a forest can be sold off to the highest bidder and the tax payer can be left with the burden of restoring it to health.


Where the river (or forest) has particular ownership (rather than general ownership) it is fully in the interests of the owner (or owners) to keep it permanently in pristine condition for at least three reasons. (Owners also need not necessarily be private companies or individuals, but also charities, trusts, worker or consumer cooperatives, NGOs, or any form of organisation - that notwithstanding,  even if held by a private corporations these same incentives will apply.)

The first is in order to retain (or even increase) the resale value of the river. The better condition the river is kept in the higher its value will become; and even if the proprietor has no plans of ever selling the river they still have no interest in losing whatever outlay they have sunk into acquiring it in the first place. As such, a particular owner has the maximum incentive to protect against the river being polluted and to take whatever action is necessary to prevent it from being polluted. As a rightful owner they have the legal and moral right to take action against anyone who pollutes the river because the polluter has damaged the value of their property.  As it is not under general ownership where everyone has as much right to abuse it as anyone else does, the proprietor's interests are aligned with the interests of the natural world, thus he is risen to the level of a custodian. 

Secondly, a well-kept resource is renewable - it can turn a profit indefinitely. A badly-kept resource cannot. If a river is ill-kept the return on the investment for acquiring that resource will soon dry up (no pun intended.) As such an owner who does not know how to take care of the river will stand to gain more from passing it on to someone who does than from keeping it. A superior custodian will be able to pay more to acquire the river since they know how to put it to good use indefinitely.  The best experts in keeping a river running cleanly stand to gain the most from owning them and therefore will be able to pay more to acquire them than those who lack that expertise. In this way those who are the best custodians of resources will end up with them in their care on average over time. (The same would go for forests, fisheries, or grazing lands; where altruism is not enough to motivate environmental concern, rational self-interest will usually do the trick.)

Thirdly, if the river is not properly kept and becomes polluted, this is inevitably going to have negative effects on neighbouring lands, industries and settlements as the pollution is carried by the river onto other people’s property. At this point, as the last line of defence against irresponsible misuse and management of the river is the threat of litigation against the owner for his negligent and harmful management of his property. Where others have suffered harm, loss of health, or damage to their own property, a particular owner should be forced to pay damages and reparations to restore them to their original condition. They can lose their personal property and have to forfeit ownership of the river if they are found guilty of causing damages. When the government causes environmental catastrophes, as they often have, they can only be tried in their own courts, and even so the property of decision-makers is never at stake - even if found guilty of wrong-doing, the public purse will eventually foot the bill. As officials in public institutions tend to have a diffusion of responsibility it is hard to hold particular culprits to account for their actions, rarely will a department be shut down or replaced where abuses occur as they are presumed essential even having "made mistakes". Often state officials have sovereign immunity, occasionally one or two resignations will be tendered as a  token gesture, but the machinery of the institution remains as well as the lack of moral hazard which set it up to fail.

Libertarians don't have any solid plans

Recently, after quizzing me on how x, y and z would be achieved without Government intervention, a socialist told me that "All of the libertarians politics is based on "if and but" no real solid plan."

I said I can see why it might look like that but it's not really accurate. On reflection maybe he's right.

People often ask how various services would be provided if not for government, and often the best answer I can provide sounds something along the lines of, "perhaps it would be done like this, or like that, but it just depends on what people want; these are just my suggestions, experts would probably come up with better ideas, those would get tried out, improved upon, and the best ideas would win out over time."

That's admittedly, not a very solid plan. But we are really  skeptical about people with "solid plans."

Because if you have a solid plan you basically think you are a genius and can run the whole society so long as your plan gets implemented. That you have better ideas than the entire combined intelligence of society working to test potential solutions on the small scale and through trial and error, rather than complete a priori calculation, allow the best ideas to be optimised and prevail. 

We actually believe that the community as a whole has far better methods for reaching good ideas than anyone with a "solid plan" can ever achieve. We see the progress of society as working like a sieve for good ideas, bad ideas get weeded out and good ideas get more widely adopted and rolled out and improved upon.

Solid plans, on the other hand, are very inflexible.

If you ask a Socialist, "what do you think the policy should be on x," they almost always have one, and they almost never have the same exact policy as one another. They have fervent debates over which policies should be implemented (for the whole society) under socialism, not stopping to consider how autocratic this all is.

We don't like to impose our "solid plans" on other people - we like to let them choose which plans they think suit them best and learn from their own mistakes. We would rather a thousand plans were tried all at once. Some of those plans might turn out to be bad: a waste of time, money, and resources, but at least only a small number of people will be affected by then. (If the stakes are high enough people can choose to get insurance against a plan going wrong.) On the other hand you might have a solid plan that sounds great on paper but when you try it out it turns out to be terrible. On a free market when that happens the bad plan goes out of business, but if the government has implemented that plan over the entire nation the results can be disastrous.

When many flowers bloom, good ideas become adopted more widely, and as they do they can be tweaked and upgraded because there is not yet a massive infrastructure churning out that plan for everyone in the country. The infrastructure around an idea builds as it becomes more popular meaning that if a product is good but could be better new versions can come out before everyone is issued with the first version.

To illustrate the importance of this point, lets suppose some politician with good intentions decides to invest billions of public money subsidising a new solar panel roofing product which he believes in, and tens of thousands jump to the opportunity to get them cheaper. Three years later another company invents a new solar product that is 20% cheaper more efficient. Those public funds have just been wasted on an inferior product due to someone's solid plan. It would have been better if a smaller number of people bought the inferior solar paneling, and a larger number waited until the new model emerged. These things are too unpredictable for central planners to account for and so the market is the best arbitrator of how soon and by how many people new ideas are adopted.

Libertarianism is essentially about the humility to know that you don't know. No one does. No individual knows better than the combined genius of the entire society testing out products and services created by the best designers each particular field. Making those experts in charge of running their field is no solution either. They might have good information about potential advances in their particular area of expertise, but they don't have the knowledge of everyone's needs, wants and preferences which are constantly changing in real time, neither can they have knowledge of future advances, or knowledge of how every element of their ideas may work out in the real world once tried, or which elements could be tweaked and re-optimised. They can't possibly have all the economic, social, political, historical, etc, etc., etc. knowledge from all possible other fields to make sure that their dictates run smoothly, or that they are the best dictates that could be dictated.

So if libertarians don't have any solid plans, thank goodness for that. At least no one is trying to plan your life for you. Our solutions are simple, if you get the incentive structure right for solutions to flourish then the best solutions will win out over time and the rest will fall into place. It's not a perfect system owing to human error, but it's a self-correcting system where the consequence of bad decisions are limited and lead to better decisions in future. That's the most important thing.

A. S. 10/12/16

If you liked this article you will also benefit from reading Economics is Elegant! (not boring).