I’m working on the environmental policy chapter of my book-in-progress, Economics in Two Lessons, which is a reply to Hazlitt’s Economics in One Lesson, which in turn is a repackaging of Bastiat’s What Is Seen and What Is Not Seen. Hazlitt was aware of the difficulties posed for laissez-faire by pollution, and chose to avoid the issue. But, on Googling Bastiat + pollution, I came across a remarkable package in which Bastiat anticipates the climate change debate and takes the denialist side in advancee.
Suppose that a professor of chemistry were to say: “The world is threatened by a great catastrophe; God has not taken proper precautions. I have analyzed the air that comes from human lungs, and I have come to the conclusion that it is not fit to breathe; so that, by calculating the volume of the atmosphere, I can predict the day when it will be entirely polluted, and when mankind will die of consumption, unless it adopts an artificial mode of respiration of my invention.”
Another professor steps forward and says: “No, mankind will not perish thus. It is true that the air that has already served to sustain animal life is vitiated for that purpose; but it is fit for plant life, and what plants exhale is favorable to human respiration. An incomplete study has induced some to think that God made a mistake; a more exact inquiry shows a harmonious design in His handiwork. Men can continue to breathe as Nature willed it.”
What should we say if the first professor overwhelmed the second with abuse, saying: “You are a chemist with a cold, hard, dried-up heart; you preach the horrible doctrine of laissez faire; you do not love mankind, since you demonstrate the uselessness of my respiratory apparatus.”
This is the sum and substance of our quarrel with the socialists. Both they and we desire harmony. They seek it in the innumerable schemes that they want the law to impose on men; we find it in the nature of men and things.
Bastiat gets the problem (carbon dioxide + methane) right, though not the primary sources (burning fossil fuels and burping cows) or the way they damage us.
What’s striking, though, is his a priori faith that everything will be OK because of Divine Providence, whicn ensures that human activity tends towards harmony. If that fails, and a laissez-faire economy does in fact produce unsustainable pollution, his whole case collapses.
Of course, it’s possible to salvage a version of laissez-faire in the way suggested by Coase, using newly created property rights. But this requires the admission that property rights are a socially constructed set of rules, enforced by coercion, rather than a category inherent in the natural relationship between people and things. It’s precisely this admission that propertarians have been unwilling/unable to make, and why they still rely on magical thinking like that displayed by Bastiat.