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Robert F. Kennedy Jr.: Restore Free Market Capitalism for the Environment

| Thursday May 19th, 2011 | 13 Comments

Robert F. Kennedy Jr. is well known as an environmental advocate and attorney.  Given his pro-environment position, it is quite unexpected to hear Kennedy advocate for free market capitalism in order to protect the environment.

If you ask many committed environmental folks, they would probably be anti-free market capitalism. If you ask many free market adherents, they would probably be anti-environmentalist.

However, the rather unique pro-free market, yet pro-environment position came during Kennedy’s evening keynote address at the Sustainable Operations Summit, at The Langham Huntington in Pasadena, CA earlier this week. His position at first took the crowd by surprise, but was well received after Kennedy’s digression.

Free Market Capitalism vs. Crony Capitalism
Kennedy differentiated the various flavors of capitalism. The one he favors for the environment is free market capitalism. The one he opposes is the sort of “capitalistic” system we have in place as we speak, crony capitalism.

“Show me a polluter, and I’ll show you a subsidy,” insisted Kennedy, implying that the biggest polluters in the environment are actually subsidized by the taxpayer. Crony capitalism is when the government and corporations collude to divert tax payer dollars (grants or subsidies) and/or create laws that benefit the given corporation. If free market capitalism is upheld, no such collusion between government and corporation is even possible.

“Investing” in Laws
Kennedy further elaborated that the current regime of crony capitalism, rather than a corporation investing money to better a given business, money is (unfortunately) better spent investing the political process, thus to dismantling the free marketplace while subverting environmental laws.

One example Kennedy cited was clear cutting mountains for coal in Appalachia. It was once illegal to fill certain waterways and watersheds with debris. This law was in place for many decades. The law was even upheld against violators when brought to court. So what happened?

If you can’t win in court, maybe you can “invest” in congress.  Lobbyists were hired to not change the law, but redefine the law. The term “fill” was redefined, legally allowing companies to fill local waterways and watersheds with clear cutting debris. Kennedy summed up this travesty as the “demise of democracy.”

Free the Market, Protect the Environment?
Kennedy closed the evening by saying we need to restore free market capitalism, by getting rid of crony capitalism where the corporate and government “cheats the marketplace.” Free market capitalism will not only help us catch the polluters, but it will provide an opportunity towards prosperity for us all.

So, what do you think? Is there merit in Kennedy’s position in being pro-free market as well as pro-environment? Or is free market capitalism a terrible idea from the get go, causing more environmental harm than good? Are free market capitalism and environmentalism compatible or incompatible?


▼▼▼      13 Comments     ▼▼▼

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  • berferd

    Yes, there is merit here. This is, at long last, good news. But I must add that it’s not all that new. Various organizations such as PERC (Political Economy Research Center), as well as most of the libertarian movement, have promoted free-market, property-rights-based environmentalism for decades. Either way, it’s great to see the barriers dropping, preconceptions falling, and minds opening to win-win solutions.

    • http://greensteplearning.com GreenStep

      The “let the market prevail” philosophy may only work as long as there is a perception of limitless resources. Knowing this is no longer true, I worry we don’t have enough time to wait for future consumers in a free market to correct past mistakes. The politics of subsidies seem moot if there are no longer resources to subsidize.

      • Jonathan Mariano

        Hi Greenstep,

        Thanks for you comment. From my studies and understanding of free market economics, two concepts stick out. One crucial concept in the very scarcity of resources. I think this is a fairly common sense statement as well.

        The second crucial concept is that knowledge and information is dispersed amongst the market. No one person can know everything, but it is the process of information and resource exchange that the market figures out how to allocate things.

        Subsidies mess with this process, making things (like oil and coal) appear cheaper than they would be in a free market. Remove the subsidies, and the market should be able to allocate accordingly taking into account that very scarcity.

        J++

    • Jonathan Mariano

      I agree, PERC is a great organization!

      However, I do not think Kennedy would entirely embrace many of PERC’s positions in terms of property rights. But as you said, it’s great to see minds opening and even promoting win-win solutions.

  • http://www.facebook.com/people/Darnley-W-Howard/510520864 Darnley W. Howard

    Yes I agree. Let the free market decide who gets the capital, what business ideas are the best, and how to allocate our resources. In practice the free market approach leads to the following recommendations:
    –Phase out–or at least minimize the subsidies.
    –If we eliminate subsidies to dirty technology, we have to eliminate the cleantech subsidies. We make better decisions if we know the real cost of various energy sources.
    –Reign in the corporate lobbying. Kennedy is right. It opens the door to crony capitalism and leads to mistakes like the corn-based ethanol debacle.
    –Don’t let international borders stand in the way of free market capitalism. If sugar-based ethanol from Brazil is better and cheaper, then we should have it. And the competition would spur US entrepreneurs to find a better solution than corn-based ethanol. The side benefit is better relations with the rest of the world and moral standing to advance our position in global trade negotiations.

    • Jonathan Mariano

      Well said.

  • Jan

    I definitely agree with the sentiments displayed in this article, but I wonder if Kennedy would. I would like to see a few more actual quotes instead of so much interpretation by the author.

    • Jonathan Mariano

      Hi Jan,

      Thanks for your thoughts. Suggestion noted for next time:).

      The author speaking here:). Kennedy actually caught me by surprise (and the audience) when he mentioned the need of free market capitalism in the context of protecting the environment. My first thoughts: is this the same type of free market capitalism I have in my mind? Would a bona fide free market capitalist agree with Kennedy’s position?

      IMHO (from my understanding of FMC and Kennedy), Kennedy’s free market capitalism goes up to the extent of thwarting crony capitalism, i.e. corporations and government not able to buy legal favors or subsidies/grants. But he does not take it towards property rights based environmentalism as Berferd above mentioned. Kennedy did use the term “free market capitalism” but many hardcore FMC’s may disagree with his usage.

      J++

  • Frank Starkey

    Generally agree, and I think there is a strong corollary in urban development: without subsidies, auto-based development/sprawl is an untenable business proposition compared to walkable urbanism.

    A big challenge with polluting industries and in particular energy sources, is when a producer is able to externalize some or all of the costs, particularly the environmental ones. In the example of the coal co’s, it’s not the subsidies that let them externalize the env. costs of polluting the river, it’s the collusion of regulators. If “free market” means free of regulation, as well as subsidy, the filling of the creeks will continue, making coal still SEEM to be cheaper, and thus “superior” in the free market.
    How does Kennedy propose to account ALL the costs to each producer?

    • Jonathan Mariano

      Hi Frank,

      Insightful corollary.

      I can’t speak for Kennedy on your question, as I do not know his position on what entity (federal, state, local, private) should be doing the regulating. My guess is that his brand of free market capitalism is not free of certain environmental regulation, but that is only a guess.

      J++

  • http://www.childhonouring.org Raffi Cavoukian

    Merit in this argument is limited. Without whole systmes shift from a monetary economy to a triple bottom line economy (fiscal, social & environmental responsibility), the notion of free market capitalism is not useful. We need a new economy with a different name altogether, like “bionomy”: stewarding of the biosphere. That, along with a child-honouring protocol for commerce, can steer us in the right direction.

  • Kevin

    The beauty of the marketplace is that the average person can vote with their wallet. If it becomes known that business “A” is polluting the private property of another person or business, the market is free to change their habits away from “A” in favor of “B”, who chooses to do business, as well as be a good steward of their surroundings. The only way “A” can survive in the market is to adapt their practices; if they don’t, bankruptcy comes calling. Oh, and no bailouts in a free market!

  • donini

    I agree this crony-capitalism or “Corporatism” we’re dealing with now is a real detriment to environmentalism. I subscribe to the notion that corporations are buying the regulations that benefit them: those that allow them to advance with their profiteering agenda and those that preclude competition. So I was intrigued to see Kennedy pushing the free market variety of capitalism.

    Sadly, it seems it was mostly talk, as his BrightSource venture netted a $1.4 billion bailout through a loan guarantee issued by a former employee-turned Department of Energy official.