Monday, February 01, 2010

What do we need to know that news media and universities are not telling us?

There is a systemic flaw in our civilization that threatens its stability..

Self-interest dictates that we look for the low price. Enlightened self-interest suggests that prices should tell us the truth about real costs so that we can make well-informed decisions. But we have an economy that hides resource depletion costs and other environmental costs from consumers. There is no general fee or tax assessed in proportion to adverse impact caused or natural resources taken by producers, so these costs are not reflected in prices.

Because costs are hidden, there is a distortion that leads all cost-benefit analyses and buying decisions to skew toward more environmentally harmful acts. Consumers do things that tend to deplete resources and pollute air and water more than what they would do if the cost of the degraded environmental quality were factored into the prices of the things they buy.

"Economic externalities" (hidden costs) cause us to do the wrong thing. This distortion harms the interests of all of Earth's inhabitants. It causes long-term damage that will harm the interests of future inhabitants, including our own descendants. When markets function with a lack of regard for environmental impacts and quality of life (because natural resource user-fees and pollution fees are not part of the economic calculus), citizens may loose interest in maintaining free markets as an efficient and fair way to allocate resources. Where are the reporters and commentators who will report on and speak out against an economic system that gives us incentive to do the wrong thing? This defect in our economy disrespects the interests of other inhabitants of this world, and of future generations of humans, by depleting resources that they might rely on and polluting air and water that they need or will need. They cannot speak up in protest. Should we?

We should charge fees to those who degrade environmental quality or take natural wealth in pursuit of profit, and if we believe that natural resource wealth is owned by all equally, then any money paid by users of these resources should go to all the people; to each an equal amount. A proper accounting for this wealth would end abject poverty in the world. We would not only improve the efficiency of markets and of our whole economic system in terms of natural resources used, we would also improve the fairness of markets by making access to them (in the form of economic power) more universal across the human population. When natural resource wealth is shared equally, disparity of wealth becomes a much smaller problem.

It is immoral--particularly so for journalists--to acquiesce in a system that gives people incentive to do the wrong thing. It is immoral to acquiesce in a system that gives, at most, mere lip service to respect for public property rights, while making no effort to manifest that idea in reality. If more efficient management and more fair accounting of natural resource wealth (which is necessary as a foundation of a sustainable civilization) would bring an end to abject poverty, it seems to me something worth talking about.

There is deafening silence in discussion of and reporting on systemic flaws--in economic and political realms. … I hope a reporter or editor somewhere can explain why this analysis is flawed; or start accounting for natural resource wealth in their reporting.


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