Today the Criminal Investigation Police in Indonesia released the names of three companies suspected in burning forests in South Sumatra. You can read the whole article in National Kompas – Indonesia searching for “Three companies suspects in criminal burning of forests in South Sumatra”. And we care about this because?
Excellent question.
According to the news the fires in Sumatra have created massive clouds of smoke which is choking SE Asia. Schools are closed. Airports are closed. The toxic level is rising. The government has distributed more than 100.000 masks and set the military to fight the fires. All in all an ecological disaster all around. Thus, the generalized popular demand that the Indonesian government “do something”. And it did. The government declared a “state of emergency” in a specific province and declared new intention to “get though” with the responsible companies.
So far so good, right?
Well, not a chance!
Let’s begin by stating that the Indonesian government has been “doing something” since the modern Republic of Indonesia was first created on 17 August 1945. And failing. Miserably. Every year the burning of forests takes place to clear the land for farming. Every year air pollution goes up. Every year nothing changes. So, the pertinent question is then, how many decades does it take a government to actually accomplish something to this regards? Who knows. Your guess is as good as ours.
Sure, there are laws… that for any intent and purpose are dead letter.
Sure, there are fines… that for any intent and purpose are ludicrous.
Sure, there is the police…that for any intent and purpose are useless.
So much for “doing something”.
And then we have the “current efforts”. The national emergency, the sending of personnel (including military), the closure of public dependencies (including schools), the distribution of masks, the campaign of information and so on.
All this clearly qualifies as “closing the barn door one the horse has already run away”. Or, the other classic: Too Little, Too Late.
In essence, the Indonesian government has been doing nothing effective for only…oh… 70 years.
But that’s OK. The government will eventually get it right. Any day now. Very soon. Believe us. Because the government’s track record speaks very loudly for them… oh… wait… nevermind…
The issue here is a simple one and one that we already talked about in Evil Externalities and Ecology Through Self-Interest. It is quite simple indeed. Companies burning to clear land for farming do so for economic reasons. They could choose to clear vegetation using mechanical means, but that would cost money. So they burn. Burning is cheap, effective, and, most importantly, it shifts the burden of negative ecological effects to the government. Voila! Instant externalization of costs.
But what would happen in a Libertarian system where governments do not exist?
Companies could burn their own land, to which they have absolute rights. In other words, if they choose to burn there is nobody and nothing to stop them in. BUT, and this is BIG BUT, there is no government to whom they may externalize to. And this makes all the difference in the world. Stay with us.
Burning produces toxic fumes. Those fumes produce all kinds of economic damages to the population; from industrial damages to personal health damages. All those damages are produced through the interaction of companies burning land with other peoples’ properties without a previous agreement. In other words, they are infringing on the most basic Libertarian tenet; all rights originate in property. As such, they are liable for all damages and “interactions” not previously agreed on voluntary basis.
Do burning companies have agreements with airports for closure? No? Pay up!
Do burning companies have agreements with people regarding health damages? No? Pay up!
Do burning companies have agreements with parents regarding school closures? No? Pay up!
Do you see where this is going?
Every single interaction of smoke produced by burning with other peoples’ properties has certain monetary value to which burning companies are now owing. Now, pay attention, we did not say “liable to” but owning. There is a difference. Liability can be contested, debts cannot.
But will this make a difference?
Well, according to some studies, ASEAN needs about $10 Billion USD to deal with forest fires. That’s an early estimate of all economic loses. Do you honestly believe that any company would happily do something that stupid if they would suddenly be faced with a $10 Billion bill? Of course not. As we said in the beginning, the motive companies have to burn is economic. Remove this motive and burning stops. Not only that. But if burning suddenly becomes “not economically viable” then mechanical means must be applied. Which means new jobs, new tools, new research. Not only that. A much, much better stewardess of nature. Companies suddenly realize that all that vegetation that they are now burning is a resource that they can no longer lose up in smoke. Thus new points of view are developed. As costs rise, recycling becomes more appealing and so on.
This process is nothing unusual but the plain action of a free market. Necessity is the engine of progress and there are very few other “necessities” that even come close. Companies would not do this out of their good heart or because they are obeying laws or because they are “green” or any other nonsense. They would do this simply because it is good business.
And before you say that we live in a parallel universe and that there would be no way to enforce something like this should governments do not exist, allow us to remind you that Private Investigators and Mediation processes and procedures are on the rise throughout the entire world. This is so precisely because of government failure.
Think about it. In Indonesia the Criminal Investigation Police is in charge. How much are they being paid to do so? Close to minimum wages. How much incentive do you think they have to do something meaningful? Not much. But now consider this.
What would happen should the total value of all damages on the table would be about $10 Billion USD? Investigators and mediators would flock to Indonesia leaving no stone (or leaf of grass) unturned. Won’t happen? Can’t happen? It did happen and it continues to happen. We give you the Bophal disaster in India. Not a perfect example but an example nevertheless of private action moved by self-interest.
Now let’s go back to our Libertarian system. Do you honestly believe that any company in Indonesia in their right mind would choose to burn knowing not only that if they do so they would be instantly in debt without any reasonable chance to escape? Not only that, but that the debt would be so monstrous as to instantly bankrupt the company, leaving all shareholders and officials in debt for life?
Of course not!
And there it is!
Ecology through self-interest. It simply works.
Look, this is not complicated. Everywhere in the planet is the same story. Do you think you are safe just because you don’t live in Indonesia? Think again. In your country you may not have forest clearing by fire, but you have other similar problems exacerbated by other similar politicians. The lesson here is that nobody is safe. Anywhere.
CONCLUSION
What is going up in smoke in Indonesia is not only vegetation but the opportunity for a good life for generations of Asian people. What they are getting is higher taxes, debt, ineffectiveness and health damages. Courtesy of the Indonesian government.
But it does not have to be this way, you think. The government can do more, you believe. The laws must be amended, you say. The police can be given directions and made more effective in their investigations, you imply.
Fair enough. Question for you. For how long can you hold your breath? No, it’s not a rhetorical question. It is a practical one because so far in over 70 years the government has failed miserably. Just sayin….
Note: please see the Glossary if you are unfamiliar with certain words.
