Air pollution is one of the most interesting topics in the sphere of property rights. Not only because property rights were often set aside when dealing with problems of air pollution, but because in cases where they were applied they proved to be tricky.
Governments, aside from being the biggest polluters themselves,[ref]Murray N. Rothbard, For a New Liberty (1974, 2006; 2nd ed. Ludwig von Mises Institute: Auburn, Alabama), pp. 319.[/ref] have consistently failed to uphold private property rights in air pollution (among other areas). After all, how can one expect an institution which by its nature violates property rights to protect the rights of individuals?
On the other hand, libertarians have come up with some pretty good justifications for the universal application of the theory of property rights. Among the most important works in this field is the paper of Murray Rothbard.[ref]Murray N. Rothbard, â€œLaw,Â Property Rights, andÂ Air Pollution,â€ Cato Journal 2, No. 1 (Spring. 1982): pp. 55-99.[/ref]
The noble attempt to apply property rights to air pollution has not come without obstacles, however. This is largely the case because pollution, which is an act of aggression,[ref]Ibid., pp. 152.[/ref] is not selective. The aim of this article is to show that this difficulty is indeed a serious one.
Can Pollution be Selective?
When someone breaks your window or litters your garden, the act of aggression is selective. It was only directed towards you and you can take the necessary measures to restore justice. Even if that someone breaks the windows and litters the gardens of your neighbours in addition to you, the act can still be separated and each of you (alone or in joint suit) can pursue the aggressor. The case becomes difficult, however, with those types of aggression which are not selective. Such a case in point is air pollution.
If a factory is polluting the houses of a village, then the factory is aggressing against the property rights of each owner in that village. In order to restore justice, the factory either has to settle with each villager in order to continue polluting or cease violating their rights. No other alternative exists. But what if out of the total 10 houses in the village, say, only 5 decide to settle and the rest require the factory to stop its aggression? How is the factory to selectively pollute the 5 houses the owners of which have settled and cease polluting the other 5? If the case was breaking windows or littering gardens, it would be fairly easy: the aggressor would deal with each case selectively. But how can the other type of aggressor, the factory, pollute (aggress) selectively?
There is to this date no technological possibility which allows the control of pollution even between large areas (such as countries) and let alone houses. The case then breaks down to pollute; donâ€™t pollute; and, pollute at a certain quantity. It is analogous to our window breaker and litterer having the options to break windows/litter gardens; donâ€™t break windows/donâ€™t litter gardens; and lastly, break windows/litter gardens at an X amount.
Between a Rock and a Hard Place
The consequences of the inability to pollute selectively go beyond our initial considerations. Since the aggression of pollution cannot be controlled, it follows that from an ethical, property rights perspective, as soon as there is at least one owner who doesnâ€™t want to settle with a polluting factory, the pollution cannot continue even if everyone else wants to settle. The reason is simple: property rights are not determined by some utilitarian (â€œpleasure the majorityâ€) or â€œsocial efficiencyâ€ goal. How many people decide to allow one aggression to take place and whether this is â€œsocially efficientâ€ is irrelevant to the case of property rights.[ref]See Walter Block (1977, 1995, 2000) for a critique of the determination of property rights by the concept of efficiency, as propagated by Ronald Coase in â€œThe Problem of Social Cost,â€ Journal of Law and Economics 3 (October 1960): 1â€“44 and Harold Demsetz in â€œToward a Theory of Property Rights,â€ American Economic Review 57 (1976): 347â€“59.[/ref]
One the other hand, it is possible to find cases of air pollution in which all the victims agree to settle. However, again, since air pollution is uncontrollable and widespread by nature, the greater the number of property rights being violated the less likely that all owners will agree to settlement. In addition, consider the costs of such gigantic settlements and whether factories would be able to afford them.
These considerations lead us to a grave problem: the cessation of all forms of air-polluting activities if property rights are to be fully respected. Because economic activities which emit air pollution are extremely important for the economic well-being of people in todayâ€™s world, a full application of property rights to air pollution in the manner which libertarians desire would lead exactly to the same problems that libertarians point out when environmentalists require arbitrary measures to stop air pollution and close down factories. In other words, it would lead to a complete break-down of all activities and use of tools which pollute the air: factories, cars, airplanes, trucks, energy facilities, etc. It would lead to the destruction of wealth and the instant paralysis of normal life.
Itâ€™s important to understand that these points are not calls for government intervention, which clearly canâ€™t solve this problem. Neither is this article a call for the abandonment of the universal application of natural property rights theory. It is simply an attempt to show one difficulty in the application of libertarian creed and a call for libertarians to work on a possible solution.