Thursday, October 15, 2009

Libertarianism and the problem of the commons

Libertarianism seems to be the next big ideology. Lower, or total withdrawal of government control, and government taxation, and let free business govern itself. When people have ownership, and responsibility for something they are more tied to it. Instead of making business fight against the EPA let them find out that sustainability is best for business.

There are some valid points to this. Chevron Oil in the Kutubu field is an excellent example of the Libertarian principles. Kutubu Oil field is in Papua New Guinea. As a third world, developing nation Papua New Guinea does not have strong environmental laws. Neither do they have a strong enforcement of environmental conservation. But Chevron’s compound is maintained on stringent environmental guidelines. Why? Why would a large profit oriented company insisted on a very clean environmental compound? Because they have seen that maintaining a sustainable environment is good for their bottom line. When asked what had prompted these policies, a Chevron safety representative responded “Exxon Valdez, Piper Alpha, and Bhopal.” Exxon Valdez we all know. Piper Alpha was an oil platform in the North Sea who’s fire killed 167 people, and Bhopal was a chemical plant that killed 4,000 people, and injured 200,000. Chevron Oil proves that a company can figure out that sustainable, responsible development is in its best interest. In a county with very few regulations, and very little ability to enforce the regulations they do have, Chevron has proved that they can set the bar very high. They are the shining example of Libertarian ideals. Without government there to police them, they have policed themselves. (http://www.un.org/esa/dsd/dsd_aofw_mg/mg_worktradunio_specday/casestud5.shtml )

As a whole though, the ideals behind libertarianism do not always and forever work out that way. The problem of the commons often the downfall. First of all each company has such a small investment in the commons, they rarely feel like Chevron, that they need to do everything in their power to protect things. And when they do feel that way, often times they can’t figure out how to protect the infrastructure vital to their growth. Secondly, sometimes they business cannot see the whole of a resource. The fishing industry is an excellent example of this. We cannot accurately estimate the health of fishing areas simply because we can see how much is there. We always think there is more elsewhere.

The problem of the commons is the problem that many people use a common resource. I heard an amusing story from the Central Asian steppes. Someone decided that the nomadic pastoral people needed to be integrated into “capitalist” society thru land ownership. The objective being to prevent overgrazing. As this was being organized the literate, and modern people of this tribe realized what was happening, and very quickly got their land title drawn up. Promptly they fenced in their land. It was now their private stash for a rainy day. They put their lands on the common land, and held their fenced land in reserve for drought and famine. Instead of solving the problem of overgrazing, title created more problems. Why should they graze their own land when so much common land was available? The problem of the commons is that no one is personally responsible for the commons. If it is overgrazed the cattle, and sheep can simply be taken elsewhere. (http://webcast.berkeley.edu/course_details.php?seriesid=1906978337#15943 Independence or Dependency 2)

Another problem is the lack of ability to accurately know the whole resource. A lake is an excellent example here. How many fish are in the lake? We don’t know. We can take some guesses. But there might be some fish hiding in that shallow. So if we heavily fish the open area, maybe we can go fish the shallow. In Jared Diamond’s book Collapse he gives two historical societies as examples of this experiment.

The first is the Polynesian Islands. As a whole, the small islands tended to fair well, and the large islands did quite well also. It was the midsized island that often decline, collapse, and ruin. Why? On the small islands the people were intimately connected with all the resources. With 1000 people or less on the island, the trees were known, the soil condition was known. If you made the choice to over plant, and exhaust the soil, you knew there was no other place to go to. There wasn’t another free bit of soil for the next year. The people knew, absolutely the finite quality of their resources. But in the midsized islands people could always deceive themselves that there was another forest, another bit of farmland just over the hill. The midsized islands didn’t have the resources, and human populations to organize and centralize. Instead they were left with just enough resources to think that over the next hill the grass was greener. On a large island though there was enough land to support a centralized government. When a King, or Chief, or Headman finally gained power he was able to take stock of the resource. He might decide that farming in one area had to stop because it was having a negative impact on the island as a whole. He had the authority to insist, and force the issue. Though that particular village couldn’t see the negative impact. They didn’t see that they were stealing from the resources of the whole island. The King could see the impact. He saw the reports about the impact on the trees that were cut down. He knew that the soil erosion was causing silting in the lagoon affecting fishing. He knew the reports from the other side of the island. He knew, and could make the choice. Either the society has to be small enough to know all of it’s own resources, or the society has to be large enough to centralize, and prevent it’s further ruin. (http://www.bec.ucla.edu/papers/Diamond_Ecological_Collapses.PDF )

Japan is an example of a society that centralized. In the 1600’s the Shoguns finally gained enough power over the island as a whole. Large warring landlords had tore the island into individual factions. The landlords kept milking someone else’s resource. Each landlord thought that his problems would be solved with more land. Just get more resources from his neighbor, and the problems are solved. When the Shoguns came into power they were able to take stock in the Island of Japan as a whole. The forests had been terribly degraded. Regulations were put in place. The island began to flourish. It grew, developing true military, and economic strength. In the 1910’s they conquered Korea, and Russia. Once the large centralized government was able to manage the resource as a whole, warring landlords were kept in check. No longer was each landlord stealing resources, thinking his neighbor had more than him. Well, if they did think that, they were unable to act on it. Instead they had to make the best of the resource they each had. (http://en.wikipedia.org/wiki/Edo_period )

Libertarianism believes that each business can, and will police themselves. That’s like asking the Japanese War Lords not to conquer his neighbor because his neighbor has more trees. I do believe that each business will police themselves on the resources that they can clearly see. Chevron has come to understand. They strongly believe in sustainable compounds, high levels of environmental stewardship. At the same time, the same company has shown atrocious abuses of power in the Niger Delta of Nigeria. Their history of oil spills, and political abuses is a contributing factor to the failure of Nigeria to achieve their full political potential. Nigeria shows that even though a company might police themselves, and live up to the libertarian ideal in one area, they don’t do it consistently. A company will only police themselves as much as they have to. When it doesn’t show a bottom line impact, as is the case in Nigeria, they will spill oil into the water, and generally degrade the land in such a way that human habitation becomes no longer possible. (http://www.alertnet.org/thenews/newsdesk/LA242679.htm)