Wanting the "Wrong Things"

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Wanting the "Wrong Things"

By: John A. Baden, Ph.D.
Posted on June 01, 1999 FREE Insights Topics:

When I unpack the complaints of most environmentalists, I find a common theme. In their view, most people want the "wrong" things. Many enviros fault people who prefer snowmobiles to cross-country skies, Humvees over Hondas, or T-bones instead of tofu. SUVs are subject to especially intense criticism.

They see the production and consumption of these goods as profoundly negative. Here are some of the greens' criticisms of American culture and economy.

Buying "wrong" things generates degrading or otherwise sorry outcomes. These purchases imply unenlightened consumers and injustices falling on innocent poor people or animals.

When we select less expensive, more attractive foods over organic alternatives, we've caused people who work in fields and orchards to suffer pesticide and herbicide exposure. Given these consequences, buyers of non-organic certified products are condemned as irresponsible and immoral. They've bought the "wrong" things.

Here's another example. Buying a Suburban or similar SUV is bad; they pollute the air and endanger those in smaller, lighter vehicles. SUV buyers weigh their family's benefits of safety, convenience, comfort, and dependability against the $40,000 price tag. These are the relevant trade-offs to the decision maker.

To condemn Suburban buyers as immoral for wanting the "wrong" thing ignores the necessity of people making tradeoffs among many values. Evolution selects for those who favor family safety over statistical impacts on distant parties.

While we can reduce the pollution generated by SUVs, richer generally is and will remain safer and more comfortable. That's the way the world works.

Those who classify "wrong" things as problems vary in the sophistication of their arguments. Those who say "We must change peoples' wants", are naively unrealistic and ineffective--but harmless. In contrast, the authoritarian response; "Let's use government to make people be good", is both arrogant and dangerous to our liberty and ecology. Finally, those who understand the similarities between ecological and economic systems have the best analysis and hence the most effective, sensitive, and responsible policy recommendations.

The policy prescriptions which flow from these three perspectives are radically different. Lets take them in order.

The naive believe that people want the "wrong things", and must change, but have no causal model of changing behavior. They flog about, damning the culture, big business, the media, or human nature. The common theme uniting this group is a propensity to bitch about the condition of our world but offer no reasonable, realistic, or concrete means of reform.

Those who prescribe governmental authority to fix the "wanting-wrong-things" pathology are a click more savvy. They understand that incentives matter. They know that prices are powerful persuaders. One of the most well known and respected of this group recently told me: if you get the price wrong, every other policy instrument is likely to fail.

This group arrogantly claims to know that the correct price of "wrong" things. Gasoline, they believe, should be $4.00 or more per gallon. Higher prices surely will reduce demand for SUVs and snowmobiles.

But when prices are set by government rather than by willing consumers and producers, the potential for mischief is exceedingly high. Ecology, efficiency, and equity are all likely to suffer. We tried setting "correct" prices through natural gas regulation. With price ceilings far below the cost of discovery and production, severe shortages followed. Deregulation produced inexpensive and bountiful supplies of an environmentally superior energy.

The third group thinks of economies as ecosystems and appreciates the subtlety, complexity and interdependence of both. Their reform strategy is to discover and implement superior social arrangements. They want institutions which generate three things: 1) prices that reflect real costs, including environmental costs,

2) incentives to act responsibility in view of these costs, and

3) recognition that many of the most valuable things don't trade in

markets.

Opportunities to develop new organizations to protect or produce these unpriced goods are critically important. Growth of public, non-govermental organizations such as the Montana Land Reliance and Gallatin Valley Land Trust is most encouraging.

In sum, when the last group, economic ecologists, see people selecting "wrong things", they seek arrangements which maximize freedom to act while holding people accountable for the consequences of their actions. They recognize the power of entrepreneurial innovations to achieve ecological ends. They see for-profit and non-profit entrepreneurs as people in a discovery process whose results are generally superior to political management by those who know the "right" prices for the "wrong" things.

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