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HOW SOCIALISM CAUSES POLLUTION

In 1912 a British economist named Arthur C. Pigou published a book entitled Wealth and Welfare in which he explained what, ever since then, has been the standard theory of the root causes of pollution and other forms of environmental degradation.¹ Pigou blamed pollution on the unregulated pursuit of profit in a capitalistic economy where business people were said to have incentives to consider the private costs of their decisions (wages paid to employees, the cost of raw materials, taxes, and so on), but not the “external” or “social” costs such as the pollution that may harm the environment or even public health. Consequently, said Pigou, business people will largely ignore these “social costs” unless government steps in and forces them to pay for them. He then advocated pollution taxes in the form of a per-unit tax on production (such as a tax on every ton of steel manufactured in a steel mill or every ton of coal burned in a power plant). These taxes came to be known as “Pigouvian taxes” and have been advocated by most economists ever since as a possible means of alleviating pollution problems by forcing businesses to cut back on production under the understanding that anything that is taxed, we get less of.

At the same time, Pigou argued that such problems would never exist to any noticeable extent in a socialist economy, for a socialist “planning board” would always be wise and benevolent enough to take the external costs of pollution into account. He was wrong on both counts: businesses are not necessarily prone to pollute if there is a sound legal system that holds them liable for any damages that they may impose on others, and actual socialism during the twentieth century created an environmental nightmare.

HOW CAPITALISM PROTECTS THE ENVIRONMENT

One of the defining characteristics of capitalism—arguably the most important one—is the existence of private property and the protection of property rights. Just as important, property ownership involves liability for the use of one’s property. Property owners realize the benefits of ownership, and are also responsible for any costs that their property imposes on others. Ownership of an automobile, for example, makes one responsible for any damages one may cause by crashing one’s automobile into someone else’s—as long as there exists a sound legal system that protects people’s rights. Such a legal system existed in America for many years, until it was transformed in the late nineteenth century, as explained by legal scholar Morton J. Horwitz in his two-volume treatise, The Transformation of American Law.² Horwitz showed that up until the latter part of the nineteenth century, the common law regarding pollution was such that if a factory owner polluted a stream or the air in a way that caused financial, physical, and/or psychic harm to his neighbors, it was almost certain that he would be sued for damages by either individuals or communities, and would be found guilty. He would then be assessed a penalty. Economists call this “internalizing” the external costs of pollution. Pollution doesn’t pay if polluters are held legally responsible for the damages caused by their polluting behavior.

The legal system changed, however, once the legal profession began to adopt a more collectivist, as opposed to an individualist, philosophy, as Horwitz explains. The individualist view is that the government’s legal system should be based, first and foremost, on the protection of life, liberty, and property, including protection from pollution. The collectivist viewpoint that was adopted by the American legal profession argued the following: no individual or group of individuals should stand in the way of the economic progress of the entire community. Therefore, a few victims of pollution should not interfere with economic development prospects that benefit “the greater good.” It was an application of the old utilitarian line, later adopted by the socialists, about “the greatest good for the greatest number.” Polluters were increasingly let off the hook because of this collectivist corruption of the American legal system.

Competitive businesses in a capitalist economy actually have strong incentives to conserve and protect natural resources. Profit maximization—the main goal of any business—is after all the flip side of cost minimization. And a good way to minimize cost (and maximize profit) is to use as few resources as possible in producing goods or services in the marketplace. Coca-Cola, for example, found that by using less aluminum in its drink cans it could cut costs while maintaining quality, so it did. Whether it’s a corporation looking to cut energy costs by conserving energy; an agribusiness, like forestry, that has an interest in keeping a renewable resource going; a smoke-stack industry that wants to maintain good relations with its neighbors and customers; or even a simple homeowner who has a natural motivation to maintain and improve the value of his lot, a sort of (Adam) Smithian invisible environmental hand guides private ownership and free-market businesses.³ If you’ve ever noticed how car owners treat their property compared to how rental cars get treated, or how homeowners treat their homes and property compared to how renters treat theirs, you’ll understand the point.

Renters, though, can at least be held accountable by the property owner or the rent-a-car company. Land socialism takes irresponsibility a big step further. Timber companies, for example, that operate their own forests are extremely careful about being good stewards of their land, because it is their livelihood; they even innovate with the creation and planting of “super trees” that mature more quickly than normal trees. The practice of “clear-cutting” forests, as well as overgrazing cattle and the resulting desertification in parts of the West, was the direct result, in most cases, of timber companies operating, or cattle ranchers grazing their herds, on government-owned land. Because they didn’t own the land, they had little direct incentive to care for it; that was the government’s responsibility, and the government was often too slow to react.⁴

SOCIALISM’S ENVIRONMENTAL NIGHTMARES

The environmental perils of government ownership are even more pronounced under socialism. The collapse of the Soviet empire in the late 1980s and early 1990s provided a glimpse, for the first time in decades, of the environmental conditions in such closed societies as socialist Russia, East Germany, Poland, Czechoslovakia, and elsewhere. What emerged was a tragic story of grotesque environmental destruction.

Small groups can use property communally, and through the threat of fines and social ostracism, make it work—the sort of thing you see in homeowner associations and community clubhouses. But when property is owned communally on a large scale or by the government and treated as a free resource, it will inevitably be abused because no one has either the motivation of profit or even the simple pride of ownership to care for and maintain the land for future profit or future generations; it is simply something to be used now. In the Soviet Union, such socialist attitudes and policies led to an environmental scandal of epic proportions exposed in books like Ecocide in the USSR.⁵ A typical example comes from the Soviet Union’s exploitation of the Black Sea.⁶ To meet government-issued five-year plans for housing and other construction, builders extracted gravel and sand from around Black Sea beaches (and knocked down a lot trees to do so). Because there was no private property, no value was attached to the gravel, or to the trees, or to the shoreline. Because the gravel was “free,” contractors hauled away as much as possible—before someone else did. The result, of course, was massive erosion of the beach. Between 1920 and 1960, the Black Sea coastline shrank by half, the area was scarred by hundreds of landslides every year, and hotels, hospitals, and a military sanitarium collapsed into the sea as the shoreline gave way.

For similar reasons—a lack of private ownership, no commercial incentive to be good environmental stewards, the stifling of economic and technical progress that comes with socialism—water pollution was catastrophic in socialist Russia. The West has had its fair share of environmental problems, including river pollution, but nothing like what went on behind the Iron Curtain. Effluent from a chemical plant killed almost all the fish in the Oka River in 1965, and similar fish kills occurred in the Volga, Ob, Yenesi, Ural, and Northern Divina Rivers. Most Russian factories discharged their waste without cleaning it at all. Mines, oil wells, and ships freely dumped waste and ballast into any available body of water. Only six of the twenty main cities in Moldavia had a sewer system by the late 1960s, and only two of those cities were successful in actually treating sewage. Conditions were far more primitive—and polluted—in the countryside.

The Aral and Caspian seas had been slowly disappearing during the socialist era as huge quantities of their water were diverted for irrigation. Since untreated sewage flowed into their feeder rivers, they were heavily polluted as well. Near the end of the socialist era in Russia, some government authorities there predicted that by the end of the century the Aral Sea would essentially become a salt marsh. Because of the rising salt content fish had been disappearing, and the sea itself had shrunk by about one-third. Its shoreline was described as “an arid desert” where the wind blew dry deposits of salt thousands of miles away. The infant mortality rate in that area was five times the national average.⁷

The sturgeon population was so devastated in the Caspian Sea from overfishing and pollution that the Soviets actually experimented with producing “artificial caviar.” Hundreds of socialist factories and oil refineries and the major cities along the Caspian Sea dumped untreated waste and sewage into it. The concentration of oil in the Volga River was so great that steamboats were equipped with signs forbidding passengers to toss cigarettes overboard for fear that the river might catch fire. Fish kills along the Volga River were a common occurrence.

Lake Baikal, which is one of the largest and deepest freshwater lakes in the world, was horribly polluted. Factories and pulp mills dumped hundreds of millions of gallons of poisonous effluent into the lake for decades. As a result, animal life in the lake was reduced by half; untreated sewage was dumped into all the tributaries to the lake. Islands of alkaline sewage were observed floating in Lake Baikal, including one that was eighteen miles long and three miles wide. These “islands” polluted the air around the lake as well as the lake itself. Because no one owned it and had any interest in preserving it, thousands of acres of forest land around the lake were denuded, causing dust storms.⁸ Most of this horrible environmental degradation occurred because of the socialist government’s goal of pursuing “economic growth” at any cost.

Communist China has followed socialist Russia down a path of environmental destruction. According to the Worldwatch Institute, by the early 1990s more than 90 percent of the trees in the pine forests of China’s Sichuan province had died from air pollution. In Chungking, the largest city in southwest China, a 4,500-acre forest was reduced in half by pollution, and acid rain was reported to have caused massive crop destruction. Depletion of government-owned forest land had resulted in desertification, and millions of acres of grazing land in the Northern Chinese plains were made alkaline and unproductive. China’s environmental problems are not just rural. CBS News reported in 2007 that sixteen of the world’s twenty most polluted cities were in China.⁹

Throughout the Communist world, environmental conditions were horrendous. The Polish Academy of Sciences reported in the early 1990s that a third of the country’s thirty-eight million people had lived in areas of “ecological disaster.” In the heavily industrialized Katowice region of Poland, the people suffered from 15 percent more circulatory disease; 30 percent more tumors; and 47 percent more respiratory disease than did other Poles. Acid rain was reported to have so corroded railroad tracks in socialist Poland that trains were not allowed to exceed twenty-four miles an hour. The air was so polluted in Katowice that there were underground “clinics” for those with chronic lung diseases. These took place in uranium mines where there was supposedly clean air.¹⁰

Non-stop pumping of water from coal mines caused so much land to subside that more than 300,000 apartments were destroyed as high-rise buildings collapsed into sinkholes. Mine sludge pumped into rivers and streams, along with untreated sewage, made 95 percent of the water in socialist Poland unfit for human consumption. More than 65 percent of the nation’s water was unfit even for industrial use. It was so toxic that it would destroy heavy metals used by industry. Acid rain dissolved so much of the gold roof of the sixteenth-century Sigismund Chapel that it had to be replaced.¹¹

In socialist Poland industrial dust containing poisonous substances such as cadmium, lead, zinc, and iron rained down on the cities. Trucks would drive through the streets daily spraying water to reduce the poisonous dust. The largest river in Poland—the Vistula—was described by the mayor of Krakow as a “sewage canal.” Half of Poland’s cities did not even treat their wastes; dozens of animal species became extinct; and health problems among children were epidemic in the industrial regions. Life expectancy for men fell in socialist Poland while it was rising substantially in much of the rest of the world, especially the capitalist West.¹²

The then-Czechoslovakian President Vaclav Havel announced in 1990 that his country had the worst environment in all of Europe, thanks to forty-five years of socialism. He wasn’t exaggerating. Sulfur dioxide concentrations were reported to be eight times higher than in the United States. Because of decades of chemical fertilizer overuse, farmland in some parts of Czechoslovakia was toxic to more than a foot in depth. In Bohemia, hills were barren because pollution had killed all the vegetation. The air was so foul that it was said it could be tasted. Hundreds of thousands of acres of forests disappeared due to pollution; a thick, brown haze is reported to have hung over much of northern Czechoslovakia for most of the year; aluminum had poisoned the ground water in vast areas of the country; in its search for coal the socialist government used bulldozers on such a massive scale that it turned what had been towns, farms, and woodlands into wastelands.

In East Germany in the late 1980s, 80 percent of the surface waters were unsuitable for fishing, swimming, or drinking, and one-third of all lakes had been declared biologically dead because of untreated sewage that had been dumped into them for decades. One-fifth of all forests were dead, the victims of pollution, with many more slowly dying. The air was so polluted in some cities that cars used their headlights all day long; and visitors were known to vomit upon breathing the air.¹³ Nearly identical spectacles occurred in Bulgaria, Romania, and Yugoslavia during the socialist era.

“DEMOCRATIC” SOCIALIST POLLUTION

Socialism does not have to be totalitarian to produce environmental nightmares. Socialism is socialism. Government-run enterprises are just as inept under democratic governments as they are under autocratic governments. One egregious example of environmental degradation in a democratic socialist country is Venezuela, thanks to its nationalized oil industry and lack of private property rights over much its natural resources. Venezuela suffers from massive deforestation, losing forest at twice the rate of other South American countries.¹⁴ Lake Maracaibo is heavily polluted with industrial wastes that include mercury and other deadly substances; 10,000 gallons of sewage per second is dumped into the lake from the two million people who live around the lake; more than 800 companies are permitted to dump industrial waste into the lake; and there are frequent oil spills, sometimes more than one a day.¹⁵

The equally enormous Valencia Lake is said to be “massively polluted due to the countless sewage systems” that pour into it.¹⁶ The city of Valencia gets its water supply from the Pao-Cachinche dam, and the water held by the dam receives about 80 percent of the sewage from Valencia. The water treatment facilities are said to be often “in disrepair.”¹⁷ In 2007, the Venezuelan government decided to pump water that it knew was unfit for human consumption from Valencia Lake into the Pao-Cachinche dam. Meanwhile, the government-run oil company, known by the acronym PDVSA, had by the late 1990s filled some 15,000 oil pits with contaminated sludge from oil wells. All of this is bound to seep into the groundwater, creating serious health threats.

It is a hallmark of socialist governments everywhere to nationalize heavy industries like petroleum, and, in the process, turn them into government-supervised environmental criminals unaccountable to property owners and consumers. For example, when privately owned British Petroleum (BP) caused an accidental oil spill in the Gulf of Mexico, it immediately established a $20 billion fund to pay future claims of damages and did everything it could to clean up the mess. It had legal obligations and its corporate reputation at stake. When the Mexican government’s oil company, Pemex, causes an oil spill in the Gulf of Mexico—and there have been many—it claims “sovereign immunity” from any legal damages. In the first five months of 2015, Pemex was responsible for three catastrophic oil rig explosions in the Gulf of Mexico that caused several deaths, numerous injuries to oil platform workers, and generated air and water pollution.¹⁸ Pemex claimed that the explosions caused no oil spill, but satellite images taken by Greenpeace Mexico showed a two-and-a-half-mile long oil slick reaching from the exploded oil platform.¹⁹ “Pemex has proven time and time again that you cannot trust their statements,” said Gustavo Ampugnani of Greenpeace Mexico.²⁰

The United States is not immune from socialist-driven environmental problems. Many utility companies, for example, are government-owned with less than stellar results. In 2015, to take just one recent example, the people of Flint, Michigan, were alerted to a frightening environmental debacle. The city government, supposedly in an effort to save money, switched its city’s water supply from Lake Huron to the Flint River, despite the fact that the Flint River had long been known to be extraordinarily polluted. The Flint city government (and the state’s Department of Environmental Quality, according to a class action lawsuit) failed to properly treat water from the Flint River. The result was that city residents drank and bathed in water full of lead and other dangerous chemicals. ²¹

For many intellectuals, the attraction of socialism is that it is “rational”; it is a “planned” economy, planned by people like them. In reality, the environmental and economic results of socialism are a litany of disaster.