Free-Market Environmentalism and the Precautionary Principle

I promised last week to add some concreteness to my controversial argument in favor of a kind of precautionary principle for human activities that pose risks of significant environmental damage. Specifically, I was arguing that we should be skeptical of attempts to re-engineer the natural environment along the lines of some grand plan, just as we should be skeptical of attempts to re-engineer the human economy along the lines of a grand plan. So what counts as “re-engineering” of nature? And how would a precautionary principle protect against it?

Introductions of alien species to “improve” the native environment are classic examples of environmental central planning. Here are some examples of such introductions:

  • The small Indian mongoose (PDF) was introduced to a number of islands, from Jamaica to Hawaii, in the late 19th century in order to prey on rats, which damaged crops and were sometimes prey for poisonous snakes. However, the mongoose ended up not preying much on the rats, but on native wildlife instead, causing multiple extinctions. Moreover, the mongoose ended up causing more crop damage than the rats had.
  • Multiflora rose was introduced to North America from Asia as rootstock for ornamental roses. It was also widely planted in the 1950’s and 1960’s when the USDA recommended it as a “living fence” for livestock farmers. It rapidly escaped into the wild, where its populations exploded. Today it is found in virtually every natural area in most of the eastern U.S. and Canada, where it creates dense, thorny thickets, shades out and kills the forest understory, and disrupts natural succession.
  • Importation of ornamental or culinary species into North America was either probably or definitely responsible for the introduction of:
  • American chestnut blight, which has caused the virtual extinction of the American chestnut.
  • Giant hogweed, which has spread into the wild and can cause severe skin irritation and even blindness in humans.
  • Common buckthorn, which creates monocultures where virtually no other living plant is found.
  • Garlic mustard, a culinary herb, which is rapidly spreading across the eastern U.S. and “outcompetes native plants by aggressively monopolizing light, moisture, nutrients, soil and space.”
  • Human-introduced cats and rats are responsible for numerous species extinctions in island environments. In urban areas there are often hundreds of feral cats per square mile, and cats kill hundreds of millions of birds and more than a billion small mammals each year, not to mention countless amphibians, lizards, and other animals.
  • Asian bighead and grass carp were brought to the U.S. to filter aquaculture ponds. They escaped into the Mississippi River, where they have reproduced exponentially and are associated with declines in native species, and are now threatening to invade the Great Lakes. In Japan, an American fish, the bluegill, escaped from an experimental lake and have become invasive there.

Humans alter the natural environment for aesthetics, recreation, and the growing of food. Increasingly, this alteration involves the intense application of synthetic fertilizers and pesticides. Frogs are dying out around the globe due to the chytrid fungus, and new research shows that the agricultural herbicide atrazine, banned in Europe, is also responsible for major die-offs and deformities. Fertilizer runoff from farms has caused vast “dead zones” in the Gulf of Mexico and elsewhere.

Earlier, humans extirpated wolves and mountain lions from most of the U.S. because of irrational fears for human safety and more rational concerns about livestock losses. As a result, native deer populations have exploded, exceeding natural carrying capacity in some places. Deer starvation, the extirpation of native flora eaten by deer, and perhaps even the spread of chronic wasting disease can be traced back to this monumental re-jiggering of nature.

I do not claim that all human manipulation of the environment works to the detriment of humans, which would be ridiculous. In general, however, attempts to “plan” the environment harm the environment, in the sense that speciation declines and different ecosystems around the globe become more and more similar in species composition. Some environmental harm is necessary for human benefit, but we should also expect that environmental harms have unmeasurable costs for humans, most obviously aesthetic but also material (less systemic resistance to disease, new invasions, population crashes and blowouts, etc.).

Since we know that environmental harms are not properly priced in the marketplace (environmental protection yields positive externalities), some regulation of environmental harms or subsidy for environmental protection seems warranted on utilitarian grounds, and probably on non-utilitarian grounds as well (wildlife are perhaps best thought of as common property). Certainly, the sad history of species introductions implies that any new species introduction should be carefully assessed before being permitted – hence the idea of a precautionary principle. A reasonable precautionary principle might look something like this: “There exists a general class of activities, which have
consequences that are likely to be harmful in ways that are difficult or impossible to measure. When considering the costs and benefits of any particular activity belonging to this general class, we should try to include estimates of costs and benefits of this activity based on similar cases, even when the directly measurable risks of this activity are near zero.”

This principle could apply to economic central planning as well. Take the minimum wage for instance, which belongs to a general class of economic policies known as price controls. The predicted economic effect of price controls in competitive markets is well known. Even if the empirical evidence on the effect of the minimum wage on employment is mixed (as it is), we should err on the side of opposing the minimum wage, because it belongs to a general class of policies we know create deadweight losses in all but the most unusual circumstances. The evidence in favor of the minimum wage would have to be overwhelming to overcome our prior judgment.

Similarly, when the importation of a new species is considered or a new pesticide is brought to market, it seems reasonable to demand considerable evidence of these products’ safety and efficacy before we judge that the benefits will exceed the costs. It’s not just a private matter.

7 thoughts on “Free-Market Environmentalism and the Precautionary Principle

  1. Jason, I think where I am stuck is on the form the “precautionary principle” you want to advocate should take. One way to take it is broadly methodological. It suggests that central planning (in environmental protection or more general economic activity) faces insurmountable epistemic difficulties, so planning and activity needs to be distributed to where the information constraints are least (not non-existent). That, of course, is the Smith-Hayek argument for distributed economic decision-making. It does represent a form of precautionary principle, and I have no objection to it.

    The other form is as a substantive principle for central decision-making. It is a normative guide for central decision-making. That is the form in which it appears in environmentalist doctrine, and that is the form I object to. I can’t tell, though, whether you are advocating this as well, or distinguishing the two forms, or what.

    Take, for example, the introduction of multiflora rose. As a normative guide for the central planners who undertook that, what difference would it have made? It doesn’t give them any more information than they had before (since the consequences were unanticipated), and it’s hard to believe that they didn’t think that, all things considered, they didn’t think the benefits would outweigh the harms. In other words, it would have told them to do just what they did. The only recipe that would have made a normative difference would be not to undertake that decision at all, since they lacked the crucial information necessary to do so. That is, only the methodological precautionary principle would have made a difference. But that is typically not the idea associated with the “precautionary principle.”

  2. My problem with the first formulation of the problem of central planning is that it seems a priori, as if we know in advance that central planning will never work, because it faces insurmountable epistemic difficulties. But it seems to me that the epistemic difficulties faced by central planners and market actors are really on a continuum and may differ from case to case. I wouldn’t want to rule out central planning absolutely by theorem, but by evidence. So I would be more comfortable with a Bayesian-style formulation that says that theory gives us very strong reasons for skepticism about central planning, but these reasons are rebuttable in light of evidence. For instance, central planning of the court system or police, it seems to me, makes more sense than a competitive free-market court system or police. This is an instance where evidence leads us away from our theoretically driven priors (and maybe we can come up with a new theory to explain why).

    For multiflora rose, it seems to me that what they should have done was some field testing to find out whether it escapes and persists and what its effects on other wildlife might be. Our theoretically driven prior should have been that introduction was a bad idea. Our posterior judgment would depend on further testing. If that testing showed that the species could be developed to yield sterile seed, or its fruits were unpalatable to birds and therefore wouldn’t easily spread, then we could have come to the final judgment that the benefits were worth the risks. But where we start matters, the more so the less evidence we gather.

  3. Jason, I don’t think the recognition of epistemic limitation is a priori at all; I think it is a posteriori pretty much all the way down. Moreover, I think those constraints re-emerge at the second order: I doubt that we can have any knowledge that our Bayesian calculations can yield much justification for claims of knowledge at any level, partly because we don’t know that the way we classify instances for purposes of conditionalizing are right or relevant.

    But you’re right that sometimes there can be levels above the individual which are the best for aggragating information and thus (at least in that way) for decision-making. I simply don’t think we know when that is so. And public provision of this decision-making forecloses the possibility of discovering better ways of aggragating information, whereas bottom-up problem solving has much better chances of arriving at institutions that get this done at the right level (part of what ongoing experiments in commercial enterprises do). In fact, this is I think a powerful reason (one among many) precisely for not preferring centrally-planned police and courts over privately supplied ones. (Is there actually any evidence that they do solve problems of epistemic limitation more than private arrangements for those services do? How could we know?)

  4. If we can’t know that problems of epistemic limitation don’t exist in certain cases, because there is no possible evidence that could prove the contrary, isn’t that basically an admission that the assumption of radical epistemic limitation is an axiom, rather than an a posteriori derivation from evidence? I don’t share that radical a skepticism about the knowledge generated by the social sciences. If the problem is that there’s no counterfactual of “zero deadweight losses,” to take the case of the minimum wage or of centrally provided courts and police, then I take the point but would still contend that we can test whether the central-planning alternatives yield systematically different, measurable outcomes (that we care about) from the free-market alternatives. E.g., unemployment, violence, etc. (I think Somalia provides a good natural experiment to test market anarchism vs. Lockean constitutionalism, btw.)

    1. No, I don’t think the basic principle is axiomatic, just an exceedingly robust empirical generalization. I think we have robust empirical evidence — in fact, about as robust as it’s possible to get — that we can be mistaken at every level of empirical belief. Thus, that it’s desirable to arrange for corrigibility for the beliefs formed at that level. I think your argument has to go the other way around: it must be that we have evidence that here, with this belief, there is no reason to think corrigibility needs to be a concern. Moreover, I take it a commitment to the degree of skepticism about belief involved in my argument is as essential to the practices of the social sciences as it is any other science. To resist this degree of corrigibility just is to axiomatize, isn’t it? And to publicize services just is to give up on experimentation in different ways of meeting the needs we want met. So I still think your concerns about axiomatization point the other direction!

      The problem with any particular experiment as a test case is always that the number of extensible or projectible properties that we might think are subject to testing outrun the evidence. You might be right about Somalia, but on the other hand it might be showing that the non-legal, social culture of respect for persons and property in which Lockean constitutionalism thrives has vast advantages over the tribalism that has generated so much East African violence. (I’m inclined to think of it that way.) I doubt that constitutionalism will work outside of that framework any better than anarchy does!

  5. Hm, I don’t see that I’m building any immunity to corrigibility into the argument. In principle, central planning is corrigible. You can undertake intensive research into cost schedules and supply and demand elasticities and try to set prices as if they were market clearing, creating an artificial market. You could apply pesticides to eliminate some species and fertilizers to encourage others, and mow and prune and shape it all to create, say, a lawn or a golf course, an artificial ecosystem. But neither will work very well, in general.

    But sometimes they might, and the evidence would have to be overwhelming on this score – and another issue here might actually have do with values extrinsic to these systems. A natural ecosystem will almost never make a good golf course. A market anarchy might give us a supply of protection equal to demand but do a poor job of providing true justice. Maybe that’s the way to think about it?

    On the Somalian case, I was actually thinking about the contrast between Somaliland in the northwest, which developed a functioning central government established by a federation of tribes, and Mogadishu, which has generally had a market anarchy. Presumably many things are being held constant in such a comparison.

  6. Jason, I suppose I grant that you can do so, but in fact we know that public institutions are remarkably non-responsive to failure and thus to learning opportunities, at least by way of comparison to voluntary institutions where failure takes its toll very quickly. But of course that too is a matter of empirical discovery, and corrigible as well!

    Also, you’re right that we care about other things than simply maximum epistemic advantage. Justice, arguably, is one such thing (but, I’m perfectly ready to argue, one at which voluntary and private arrangements also have a massive lead on public institutions, given the prima facie injustice of coerced arrangements). Still, the point stands that information-utilization is hardly the only thing that matters.

    And I accept your point on Somalia. I think there is no general theory on how to get people out of a default to combat and into a default to cooperation, but pretty much anything that does that, may be a step in the right direction.

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