Friday, August 12, 2005

Ethics and environment

Yesterday's WSJ included "Greenhouse Passes ... To Cut Pollution, Dutch Pay a Dump In Brazil to Clean Up ... Kyoto Treaty Creates Market In Gas-Emission Credits ..."

Problems create opportunities and, whenever possible, traders will see this and act. Going one better, potential traders will even do what they can to be inventive about lowering transactions costs so that trades that were once thought to be unlikely become routine. This is now happening on the internet fairly regularly. The history of wealth creation has lots to do with the scope of the exchange economy being expanded this way.

In the Summer, 2005, Independent Review, Mark Pennington notes that free-market envrionmentalism still has to persuade most of the environmental movement, whose members are likely to remain hostile unless there is what they consider an ethical argument and approach. Pennington's "Liberty, Markets, and Evironmental Values ... A Hayekian Defense of Free-Market Environmentalism" elaborates on the ethics of free market approaches.

There may be a widening, if grudging, acceptance of market efficiency but economists have been slow to remind others that markets are also a place of choice and liberty -- unless markets are corrupted by politics and politicians.