L
lynnvinc
Guest
I think Laudato Si says that capitalism and the free market are not enough to reduce environmental harms (see LS #190-195)…which is eerily similar to what I’ve been teaching for years.Under capitalism, the means of production are privately owned. In theory, capital provides the means for the production of goods and services for the benefit of all in a free market of supply and demand. But capital has the ability to influence and even control the terms of trade, including both supply and pricing. A notorious example is health care, where doctors and hospitals have the pricing power to routinely charge patients $60 for a Tylenol tablet or $6,000 daily for a single room, costs not usually even disclosed to the patient before the patient receives the final bill. This has no rational relationship to the true costs in a free market.
Whatever the reasons for it, it is not supply and demand efficiently at work, providing goods and services in a free market for the benefit of the patient. This is rather the intervention of pricing power within a supposedly free market. And I would say it is this type of situation (and there are many others) that Laudato Si questions and not capitalism per se.
Here’s from my lecture notes:
- FREE MARKET PRINCIPLES RE ENVIRONMENT:
- consumers valuing the environment will buy green products
Problem:
a. some don’t value the environment
b. many don’t know @ impact
FREE MARKET… - as natural resources decline, prices will go up, people will buy less
- not so (exotic bird feather problem in 1800s)
- studies: prices don’t rise until the very end (e.g., when the old growth forest is in collapse)
FREE MARKET created problems in the 1st place
- Negative EXTERNALITIES: enviro harm costs not born by biz or consumer
- Manufactures change due to regs, not solely on market forces
- REGULATIONS & LAWS are weak, small fines
CAFE standards only add bit to cost of
SUVs & Hummers in violation
also – used better tech to get more
horsepower from smaller engines - FREE MARKET is not free
biz join together, pressure gov - People lack KNOWLEDGE about harms
- Many resources are public or common (air, water…)
→ people mainly protect their own resources, not public’s
“Tragedy of the Commons”
Now having just pointed out that market forces are not enough to solve the problems, I often do try to entice people into doing the EC (environmentally correct) things by pointing out that they will save money, either right away, short-term or long term.
However, this doesn’t work either bec I guess “there is not such thing as a rational, economically maximizing man” – the very foundation of economic theory is a myth. I guess there must be some subconscious Freudian thanatos (death wish) thing going on or something. It has me scratching my head as to why people would trash the earth for the poor and future generations – their own progeny, for Pete’s sake – in ways that actually cost them more money.
Maybe it’s the devil or dev-oil make 'em do it