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April 18, 2013 - Freedomain Radio - Stefan Molyneux
20:30
2363 Sustainability

Stefan Molyneux, host of Freedomain Radio, discusses how the market fosters sustainability.

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Hi everybody, Stefan Molyneux from Free Domain Radio.
The question at hand, brought by a kind and alert listener, as Dave Barry used to say, is sustainability.
How would we achieve or how could sustainability be achieved in a free system?
Well, a fine, fine question.
Okay, so if we just look at...
First, let's just look at the consumption of resources and assume that the current level of consumption is equivalent or going to increase...
So, in a free market system, and by that I mean no coercion involved in dysregulating trade, win-win negotiations, you know, praxeologically, by definition, if you trade voluntarily with someone, it's a win-win negotiation.
And so, sorry, I don't know why I'm just quite giddy today.
Anyway, but in a free market environment, the person who can bid the most for resources...
It's generally the person who can use them the most efficiently.
So, for instance, if there are 40 acres and there's trees on it and you plan to cut all the trees down and then abandon it, then you can bid one season's worth of trees for that particular plot of land.
But if you're going to replant trees, then you can bid multiple Season's worth of profitability from that one plot of land.
And again, this is not a perfect environment, but generally, the trend will be that whoever can get the most resources out of a particular environment, that is the person who will be able to bid the most to gain control of that environment.
So, if we know that there's some gold in the ground and someone has a process that can get double the gold out of the ground, then that person is going to be able to bid more.
It doesn't have to bid twice as much.
He only has to bid like 5 or 10% more than the other person, right?
So someone who can get 5 grams per ton, whatever it's going to be, an ounce per ton out of the ground is going to be able to bid X amount.
Somebody who can get 2 ounces per ton of gold out of the ground is going to be able to bid more for that because they can get, right?
Somebody who has a fleet of couriers, vans or whatever, who switches to some more efficient engine, a diesel engine or something that's more efficient, which cuts his fuel cost down by...
Say 25% is going to be able to charge less for his courier services because his gas costs are less or whatever it is, right?
And this process is really, really important to understand.
Everybody in a free market situation who's involved in bidding and all that kind of stuff is going to be rewarded for the most efficient use of resources possible.
And that's really quite important.
I mean, the person who is going to do their inter-office communications through Brazil-style tubes and carrier pigeons and smoke signals is not going to be able to maintain as high level of efficiency in the dissemination of lolcat's photos as somebody who is going to be using email.
A server farm that finds some way to cut their electricity costs by 20% is going to be able to charge less.
So, there is, in the market price bidding system, there is a continual, relentless, perpetual push to reduce resource consumption.
To reduce resource consumption.
And wherever there's not a market for something, you know that nobody has been able to figure out how to use fewer resources to deal with the problem than they gain from dealing with the problem.
How do you know that recycling is economically inefficient?
In other words, it costs more energy to recycle than you reclaim from recycling.
Well, because nobody is offering to give you five bucks to come and pick up your recycling bin.
There's this old Seinfeld episode, I guess they're all old now, where Kramer and the postman...
Oh my god, what's his name?
Lloyd Knight.
Is it Lloyd Knight?
Wayne Knight, character.
Newman!
So Kramer and Newman are trying to figure out, in some other state, you get a higher refund...
From the bottles that you've drunk, pop bottles, you've taken back and you get a refund.
In one state it's 5 cents, in one state it's 10 cents, but it's the same bottle.
So they've gone insane trying to figure out how they can possibly get a way to make it profitable enough.
To transport the bottles from one state to another to get double the refund.
And they've tried all the gas costs, they're too expensive in the time, and there's no way to make it work, which is really interesting.
Then, of course, they end up using, I think it's a mail truck, publicly paid for it, and that's what makes it economically possible.
And that is actually a very important...
And you could do an entire day's instruction as an econ professor just using that clip about the dangers of public subsidies and making things that are economically efficient seem economically efficient simply by offloading costs to the taxpayer.
That's really a thing.
I'm surprised more people don't use that.
But it's a great episode, and it's worth watching just to see the distortionary effects of public funding.
So this drive to maximize the efficient use of resources is something that is only possible in the free market.
The moment you start to use violence to interfere with that, then you have all the overhead of the violence and all the overhead that comes from making things that were not economically viable, now economically viable, and making things that were economically viable, in other words, the maximum efficiency that can be achieved, I mean,
just think of the vast amount of environmental destruction that was wrought by the housing boom in the US. Like any environmentalist who's not against the Fed because the Fed is so incredibly economically destructive.
It's just not an environmentalist that you want to take seriously at all, right?
They're just trying to, I don't know, bed hippie chicks, I don't know, nestle their face in those unshaven armpits.
But that is really, really important.
And what happens in terms of currency and inflation, I mean, it's just so economically destructive that it's a toxin.
It's an incredible toxin.
Anybody who doesn't understand the unbelievably economically destructive effects that are going to be near permanent of the Iraq war, Afghanistan war, where these uranium shell casings are going to be littering and poisoning the environment for the rest of the lifespan of the planet, again, it's just people who just need to know this stuff.
So that's really, really important to understand.
Now, when you look at the configuration of society as a whole, and I did a whole talk at Drexel University a couple of years ago about this, which you can look for on YouTube or in my feed.
When you look at the layout of society, of course, it's incredibly road-centric, right?
And roads have shaped everything.
You know, why are we a gasoline-hungry, oil-dependent civilization?
Well, because the government has built the roads.
And the building of the roads, which came out about in the US in particular as a result of a Cold War, the building of the roads transformed economic decision-making in a way that simply, it just became one way.
I mean, it just cannot be undone.
But it's really important to look at that alternate universe wherein the government did not build all the roads for free, and thus, you know, and for free, of course, you know, it's just sort of a...
They deferred the payments, and I'm sure they're still deferring the payment.
I mean, they're still paying off the $30 billion that the US spent in World War I almost 100 years later.
So that's really important to understand, that the configuration of society...
It's heavily, heavily, heavily influenced, in fact, fundamentally determined by the roads that are built and thus allowing communities to be spread out, allowing cities to expand beyond all sense and reason, and just making everything, everything is on the assumption of cars.
I mean, or trucks in particular, right?
I mean, cities need a continual flow of food coming into them, which is masses of trucks and the roads that come into them and all, they don't factor into people's economic calculations in particular.
So, I think that's really important to understand just how economically inefficient roads are.
And it's hard to imagine what would have happened.
It's really impossible to imagine what would have happened in the absence of this kind of ridiculous subsidization.
But it really is fascinating to picture.
I mean, what would...
What would things have looked like and what technologies would have developed in the absence of roads?
3D faxing would have come along a lot sooner.
There would be a huge amount more locally grown food, right?
Because the roads would be expensive if they were even there.
And this would all be very, very different.
And this is, you know, really crucial to understand if you're into this kind of stuff.
And now we have the roads and you can't put the toothpaste back in the toothpaste tube.
We have the roads, it's not going anywhere.
So that's important to understand, but...
When it comes to environmentalism, and this is just one of many examples, just look at roads.
Or just look at something like public school.
My God!
I mean, the environmental impacts of public schools are just horrendous when you think about it.
I mean...
People who are consuming are adding to, like consuming without producing are adding to the burden on the planet.
I mean, they used to call them, I can't remember, this phrase comes from useless eaters.
I think they used to call that about kids who couldn't work on the farm yet, but this...
Keeping kids from being economically productive for 12 years or whatever, it's crazy.
It's crazy.
I mean, if 16 or 17-year-old kids who were that way inclined were allowed to become plumbers and were charging half what plumbers are charging or whatever, then people would have to spend less on plumbing, which means that they would not have to spend as much on everything else, and therefore there'd be less demand.
I mean, it's just really...
It's really important to understand just how keeping people out of the workforce is environmentally destructive because they're not adding to the efficiency of the system.
Now, of course, I understand that the kids who are working, you know, the 16-year-olds who become plumbers or whatever, they will then be buying stuff and so on.
I understand that.
But, I mean, they're having stuff bought for them anyway.
People are buying much bigger houses because their kids stay around forever.
And the parents have to sort of feed them often, give them use of cars and stuff like that anyway.
So, it's not like that would be...
Anyway, generally, again, in specific instances, you can always find...
Exclusions too, but generally, the way it works is that, I mean, the more people who are participating in improving economic efficiency, the better things are.
So, this is all on the general side of stuff, right?
Sorry, what a useless thing to say.
The general side of stuff.
Does that clear up anything?
I would say not, Watson.
What I mean by that is if we just look at supply and not so much at demand, if we just hold supply constant, then you want things to be as economically efficient as possible.
Now, when we look at the demand side, then there's a whole bunch of stuff, of course, which people buy for vanity, right?
So, if people were mentally healthier, had greater self-esteem, if they didn't have all these ridiculously shallow standards, would we need an entire gel industry?
Well, I would, just from my left nostril.
But assuming that other people don't have Christmas trees growing out of their sinuses, would we need an entire gel industry?
Would we need an industry that made women waxed in other regions in order to be seen in public?
In a bathing suit, would we have an industry of false eyelashes?
Would we have an industry of padded bras and Spanx and all this kind of stuff?
I mean, just, you know, if we were philosophical, if we had value in and of ourselves as human beings based on our virtues and our...
You know, subterranean coolness or whatever you want to call it, our X factor, then there would be a lot of stuff that would not be produced if we were able to find a way to minimize our wants.
If people didn't feel the urge to go on massive displays with the newest cars, if they felt, you know, my car, I'm still slugging it through the countryside and it's almost It's 15 years old.
And if people were happy with themselves, if they were more in love with their partners, if they were more content in their relationships, if we didn't have this shallow sexual display stuff where people had to have a whole bunch of accoutrement to make themselves look good, to make themselves look appealing, to make themselves look sexy, and so on.
Would we need all of this industry that caters to human vanity?
You're probably never going to eliminate it completely, and don't get me wrong, I like showing up places in a nice suit once in a while, but...
It really is.
You just go to department stores and at least half of the store is vanity.
I'm most comfortable in sweatpants and a t-shirt.
You know, the sweatpants that a Seinfeld says.
Sweatpants, they say, I give up.
I'm never going to be attractive, so I might as well be comfortable.
Well, it's alright.
I'm 10 years married.
My wife and I love each other to death, so that's alright.
It's more important to wear track pants and work out than it is to wear nice stuff and not work out.
So, all of this is really important to understand in terms of sustainability.
If you want people to reduce what they use, the first thing you want, of course, is a completely free market because that will mean that whoever is the greatest genius for economic efficiency, that person will end up being able to corner the market on various goods and services because they will offer the best at the cheapest.
There's a picture floating around.
Facebook basically says, has saved more trees than Greenpeace, which is a flash drive, a thumb drive, right?
Because it allows you to transfer all of this stuff without killing trees.
I mean, to me, again, it's one of my sort of pet peeves, and I'm sure there's government regulation at the bottom of it, but it seems kind of nutty to me that a book that you download to your e-book reader is a similar price to a book that you have to go and drive and get...
But I mean, just books that you can download to an e-book reader.
I mean, you don't have to go and no trees have to be planted and churned up and turned into pulp and paper and driven to a store and you don't have to drive and get the book and so on.
You don't have to store it and it doesn't have to eventually be disposed of.
I mean, it just goes onto your electronics.
There's a little bit of electricity involved and so on, right?
But I mean...
The economic efficiency of that is truly astounding.
I mean, I spent some time on planes, and if it wasn't for the fact that I'm a voracious reader, and there's a time where you can't use your electronics on an airplane, for reasons that remain a mystery to me, I think it's just because some people don't know how to turn Wi-Fi, cell signals, and Bluetooth off, so they just...
Anyway, if it wasn't for that half hour or whatever where you can't use your stuff at the beginning and end of a flight, I doubt I would buy books.
I'll buy books because I'd like to be able to read even during that time.
Audiobooks.
I mean, there's another thing which is really pretty cool and, of course, allows you to multitask.
You can listen to an audiobook while plowing the back 40, while you can listen to an audiobook if you have good noise-canceling headphones, while you're mowing your lawn.
Or if you have a push mower, you don't even need that.
So that multitasking, again, makes things, I think better, more efficient.
So, as far as sustainability goes, you just want no interference with the free market to make sure that those people who can use the fewest resources to produce the greatest good are those who gain control of the resources.
And also, in the free market, you don't have to worry about catastrophic drop-offs in supply.
You know, there's this oil panic and so on, peak oil and all that sort of stuff.
I mean, this has been going on forever.
I'm fairly skeptical.
But Chris Martens and other people have talked about it for some time.
Where it does happen, it happens because of government interference in the natural operations of the free market.
So there's a metaphor that some writer used that I've used before, which is if you have five million peanuts in a room...
Then you are inside the brain of a politician.
If you have 500 peanuts in a room and you start eating them, then you're never going to run out of peanuts because eventually you're just going to have so many...
You can't remove the shells.
Eventually you have so many shells and so few peanuts that you're just going to give up, right?
Forget it.
I mean, there may be a couple of...
Maybe there's still a million peanuts in there, but there are 500,000.
It's too hard to find.
And so you just end up...
And that doesn't happen all at once, right?
It just becomes more and more hassle to...
Oh, man, it's taken me a while to find a peanut.
Oh, man, it's taken me a while to find a peanut.
Oh, my God, it's taken me forever to find a peanut.
Forget it.
I'm not going to look for peanuts.
It's just...
Slowly, you end up not wanting to look for that stuff anymore, and so in the free market, this is reflected on an increase in price.
The more resources you have to expend to get a resource into the hands of whoever wants it, then generally, all of the things being equal, the more you're going to have to charge that person to remain profitable.
As the price of that particular solution arises, other solutions will become proportionately cheaper, and there will be, of course, As the price of traditional methods of extracting resources rises, there is a massive R&D incentive to look at alternate things like fracking or whatever in oil production, to look at alternate ways to get at the resource that you want.
And where this becomes impossible, then there's a slow change in price to the point where there's a gradual shift away from whatever that solution is into something that is new, right?
There was no...
I mean, car production wasn't sparked by the fact that suddenly nobody could find a horse and carriage, right?
People are just like, hey, if we have cars, we don't have horse shit all over the streets.
That's a good morning for me.
And so they shifted in that way.
There was a gradual transition, and of course the people who manufactured horse and buggies either transitioned or went out of business or did something else.
But there was no big, huge panic.
But of course, if the government props up all these people, then you end up with massive inefficiencies of resource allocation.
So when it comes to sustainability, like all other good things and necessary things in life, you have to look at what is virtuous.
And the initiation of force is immoral.
Respect for property rights is moral violations of property rights.
It's just another way of saying I'm initiating force.
And so if you violate the non-aggression principle, if you violate property rights, then you end up with incredible economic inefficiencies that tend to harden and the rent seekers climb on board the bandwagon and tend to want to maintain all this sort of stuff.
And it's just pretty wretched all around.
And I don't think we want that at all, right?
So, I mean, if you see lots of inefficiencies, then you have to look for the gun that is interfering with the free exercise of choice.
As soon as a gun is introduced into any equation, it becomes win-lose, right?
Two people who want to have sex are both winning in the moment they choose to have sex.
They may regret it later with the crabs or whatever, but in the moment it's a win-win negotiation.
The moment somebody holds a knife to someone's throat, it becomes win-lose.
And the introduction of violence always turns something from an interaction that is chosen to unchosen, from win-win to win-lose.
And so wherever you violate moral laws, you also end up making other kinds of disastrous effects in society.
There is the moral and the practical disasters.
That result from immorality.
So I hope that helps.
It's the question of sustainability.
Not exactly answered, but at least perhaps outlined in some ways.
Thank you so much.
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