TCS Daily

Extra, Extra! The UN Embraces Free Markets!

By Tim Worstall - March 30, 2005 12:00 AM

A completely shocking report comes from the United Nations today, almost unbelievable in its implications for us as a species, the environment and the rest of the planet. Called the Millennium Ecosystem Assessment you will have seen it splashed across the newspapers, everybody from Xinghua to Al Jazeera weighing in, via the Washington Post, Guardian, Independent and, well, here's the Google News search, have a look yourself.

There are a number of places you can get the full report, I got mine from Euractive. The nub of the report is as follows and this seems to be the part that everyone is quoting, perhaps adding in a few more scary examples just to drive the point home:

        Over the past 50 years, humans have changed ecosystems more rapidly and 
        extensively than in any comparable period of time in human history, 
        largely to meet rapidly growing demands for food, fresh water, timber, 
        fiber and fuel. This has resulted in a substantial and largely irreversible 
        loss in the diversity of life on earth.

        The changes that have been made to ecosystems have contributed 
        to substantial net gains in human well-being and economic development, 
        but these gains have been achieved at growing costs in the form of the 
        degradation of many ecosystem services, increased risks of nonlinear 
        changes, and the exacerbation of poverty for some groups of people. 
        These problems, unless addressed, will substantially diminish the benefits 
        that future generations obtain from ecosystems.

        The degradation of ecosystem services could grow significantly worse during 
        the first half of this century and is a barrier to achieving the Millennium 
        Development Goals.

        The challenge of reversing the degradation of ecosystems while meeting 
        increasing demands for their services can be partially met ... but these 
        involve significant changes in policies, institutions and practices that are 
        not currently under way. Many options exist to conserve or enhance 
        specific ecosystem services in ways that reduce negative tradeoffs 
        or that provide positive synergies with other ecosystem services.

No, that isn't the shocking or unbelievable part. I seriously doubt whether there is a sentient being on the planet who tries to claim that humanity is having no effect on the environment. The questions have always revolved around how much damage is being done, whether it's actually worth it and if not, what should we do about it?

If you dig around in the report you find that almost all of the damage comes from that well known problem, The Tragedy of the Commons. While Garrett Hardin originally applied it to population, it is now used as a short hand for the difficulties of dealing with pollution, algae blooms, over fishing, water shortages (most especially the overmining of aquifers), the destruction of tropical forests and their essence, for the unfolding disasters that the report is warning us against.

This is extremely fortunate, for as Hardin himself pointed out, we know how to solve such Tragedies. When usage of a resource under free access rules (sometimes called Marxian rules) starts to degrade that resource, the conditions of access need to be changed. We can do this in a social (socialist) or private (capitalist) manner, and while different specific resources will require different approaches, either the social or the private method will work at the specific point of restricting usage of the resource. Which method we choose depends on other things external to the fact that we want and need to limit use of the resource.

So far we have a report detailing a problem, we understand what the root of the problem is, and I've still not told you what is shocking about it. It's that this UN report takes the economically sensible path to the solution. Yes, I know, almost unbelievable isn't it? Instead of taking the social route they advocate taking the private one, to my utter consternation, meaning that I may have to regard at least part of that corrupt and grubby organization as being useful.

There are four alternative routes to a solution offered, one of them described thusly:

        More specifically, in Global Orchestration trade barriers are eliminated, 
        distorting subsidies are removed, and a major emphasis is placed on eliminating 
        poverty and hunger.

That is, that environmental degradation would be best reduced by more trade, more economic growth and less taxation and interference by Governments. It's almost as if these people have been reading Iain Murray of these pages or something, actually agreeing with the point that free market environmentalism actually works, indeed, works better than the alternatives.

A few more almost random quotes to show they way they are thinking:

        ....[a]wide range of opportunities exists to influence human behavior 
        to address this challenge in the form of economic and financial instruments. 
        Some of them establish markets; others work through the monetary 
        and financial interests of the targeted social actors; still others affect 
        relative prices.

        Elimination of subsidies that promote excessive use of ecosystem services

        Greater use of economic instruments and market-based approaches 
        in the management of ecosystem services

        Payment for ecosystem services

        Mechanisms to enable consumer preferences to be expressed through markets

Now that's what I call shocking and almost unbelievable, that 1,300 scientists from 95 countries, working under the auspices of the United Nations, seem to have drunk the free market Kool-Aid. The end result of this years-long investigation is that us free market tree hugger and greenie types are actually correct in our contention that it is not the presence of markets, or the failure of markets, that leads to the devastation, it is the absence of markets. Just as we have had to, in centuries gone by, work out a system of laws that allows markets to flourish, thereby leading to the most efficient usage of resources, so now the task is to do the same for those areas of life where there are no markets. In water, pollution, fishing quotas, tropical forestry, in, in fact, all those sectors where we face the Tragedy of the Commons.

Many of us writers here at TCS have said so before, there now being a terrible temptation to say "we told you so", but I really don't think that any one of us ever believed that the United Nations would come out and say it. We now actually have a sensible framework for how to solve these problems, let's get to it, eh?

More of Tim Worstall's writings can be found at


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