Clarifying The Problems With Capitalism and the Environment

May 29, 2019 by Joshua
in Freedom

The other day I concluded in my post Capitalism’s Problems and the Environment that certain regulations made sense.

Adam Smith The Wealth Of Nations

A reader’s response made sense and led me to refine what I wrote. Our dialog is in the bottom of that page, but I felt they deserved an full post.

She wrote:


One unintended consequence of the proposed regulation is that companies would pass on the higher cost to their consumers rather than bear the burden from their profits. This would drive up the cost of literally everything manufactured for everyone, including those already living at or below the poverty line. This price hike includes life saving medical devices and supplies that an already expensive medical and insurance system would have to absorb. I believe we can find an answer to over production but I’m afraid more regulation isn’t it. I would however recommend tax breaks to companies that can prove they are following sustainable guidelines. A carrot vs a stick approach. I also think the world of public opinion, with the influence of informed social media will drive companies to do business sustainably not just for the tax break but to keep their customer base. Keep people thinking, talking & sharing ideas! We’ll find the answers.


Fair points, I felt. I responded:


I should have clarified. I didn’t mean to suggest the government would collect more total tax money. Raising taxes in one area would mean lowering them in others, such as to avoid making the effect regressive and life-saving type things, which are important but rounding errors in total cost compared to a national economy. Lowering pollution will save more lives and improve the health of hundreds of millions.

My point of this post was not to say taxes fixed everything, only to address that even to those ideologically opposed to taxes and for small government, these types of taxes make sense. I’m not saying these are the answer, but essential fixes to capitalism in line with fixes we’ve used in other areas for centuries.

Moreover, they are more general than environmental regulations. They are problems with capitalism that we just hadn’t noticed until recently. They fix poor accounting for costs. Capitalism doesn’t work without effective accounting. I’m not sure if any economic system does.

Yes, prices of many things would go up at the time of purchase to reflect our current poor accounting. Starbucks could no longer afford to give away single-use plastic cups. Flying would cost more. Watering your lawn would cost more. The value of things that endured would rise relative to those that didn’t and we would produce less junk in favor of things that lasted. We would stop passing on costs to future generations of landfills, toxic sludge, and extinctions.

Instead of green grassy lawns and golf courses in deserts like Phoenix, Arizona, we’d make do with native species. In other places we’d grow vegetables.

People’s lives wouldn’t become more expensive, just costs would shift and lives would adjust. Material ownership would decrease. Quality of life today would stay about the same. Actually, my experience with reducing my material stuff tells me that quality of life would increase for most, as in my podcast episode Minimalism Should Be Called Maximalism. Quality of life for future generations would improve.

“Keep people thinking, talking & sharing ideas! We’ll find the answers.” Here I believe the evidence is so overwhelming that the time for merely thinking, talking, and sharing ideas passed beyond any reasonable doubt at least a decade ago. I believe any change should only come through democratic processes that people affected by the regulations consider fair, so I understand the lag. I’m working on environmental leadership to minimize it.


I hope the clarifications help.

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