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Paul Craig Roberts on the environmental cost of capitalism


An interesting article appeared on the website of Dr Paul Craig Roberts dated 11 August 2015 with the title The Social Cost of Capitalism, which in actuality is mainly about the environmental cost of capitalism. In this article examples are provided of the way in which corrupt financial and political practices have been wrecking the environment.

Roberts also made the point that few corporations absorb the full costs of their operations, many of which are displaced onto the environment, as well as onto the public sector and distant third parties. These costs are often described by economists as “external costs” or “social costs”. Roberts gave as an example the following:

“… currently 3 million gallons of toxic waste water from a Colorado mine has escaped and is working its way down two rivers into Utah and Lake Powell. At least seven city water systems dependent on the rivers have been shut down. The waste was left by private enterprise, and the waste was accidentally released by the Environmental Protection Agency [see ref.1, Ed], which might be true or else a cover-up for the mine. If the Lake Powell reservoir ends up polluted, it is likely that the cost of the mine imposed on third parties exceeds the total value of the mine’s output over its entire life. ..The mine made its profits by creating pollutants, the cost of which is not born by the shareholders. ”

” As this is the way regulated capitalism works, you can imagine how bad unregulated capitalism would be. Just think about the unregulated financial system, the consequences we are still suffering with more to come. ”

Dr Paul Craig Roberts

“Roberts then went on to criticise both libertarians and progressives, each of whom in his view has an unrealistic and idealised understanding of how a capitalist system operates:

“Despite massive evidence to the contrary, libertarians hold tight to their romantic concept of capitalism, which, freed from government interference, serves the consumer with the best products at the lowest prices.

“Progressives have their own counter- part to the libertarians’ romanticism.

Progressives regard government as the white knight that protects the public from the greed of capitalists. ”

Roberts recommends reading Jeffrey St. Clair’s book, Born Under A Bad Sky (2008), which describes how corruption in the Park Service, the Forest Service and the Bureau of Land Management results in timber companies, mining companies, and cattle ranchers making money by plundering national forests and public lands. According to Roberts:

“The public subsidies provided to miners, loggers, and ranchers are as extravagant and as harmful to the public interest as the subsidies that the Federal Reserve and Treasury provide to the ‘banks too big to fail’.

“Progressives and libertarians need to read St. Clair’s accounts of how the Forest Service creates roads into trackless forests in order to subsidize timber companies’ felling of old growth forest and habitat destruction for endangered and rare species. Our romanticists need to learn how less valuable lands are traded for more valuable public lands in order to transfer wealth from the public to private hands. They need to learn that allowing ranchers to utilize public lands results in habitat destruction and the destruction of stream banks and aquatic life. They need to understand that the heads of the federal protective agencies them- selves are timber, mining, and ranching operatives who work for private companies and not for the public.

Americans of all persuasions need to understand that just as senators and representatives are bought and paid for by the military/security complex, Wall Street, and the Israel Lobby, they are owned also by mining, timber and ranching interests. … The public interest is nowhere in the picture. ”

Returning to the problem of the mine waste, Roberts said:

“The two largest reservoirs, Lake Mead and Lake Powell, are at 39% and 52% of capacity. The massive lakes on which the Western United States is dependent are drying up. And now Lake Powell is faced with receiving 3 million gallons of waste water containing arsenic, lead, copper, aluminium and cadmium. Wells in the flood plains of the polluted rivers are also endangered.

“The pollutants, which turned the rivers orange, flowed down the Animus River from Silverton, Colorado through Durango into the San Juan River in Farmington, New Mexico, a river that flows into the Colorado River that feeds Lake Powell and Lake Mead.

“All of this damage from one capitalist mine. ”

Finally, Roberts commented on the political dimension to the above. It seems that in November 2014 the U.S. republican Rep Chris Stewart (Utah) navigated a bill through the House which was ..

“ designed to prevent qualified, independent scientists from advising the Environmental Protection Agency (EPA). They will be replaced with industry affiliated choices, who may or may not have relevant scientific expertise, but whose pay-checks benefit from telling the EPA what their employers want to hear” [see ref.2]

According to Roberts, Rep. Stewart said it is a matter of balancing scientific facts with industry interests.




Source: Paul Craig Roberts website

Paul Craig Roberts has a PhD in economics from the Univ of Virginia, and is a voluminous author and blogger. He served for one year as Assistant Treasury Secretary for Economic Policy in the Reagan administration. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. During the 21st century, he has frequently published in Counterpunch, writing extensively about the effects of the Bush (and later Obama) administrations related to the War on Terror, which he says have destroyed the U.S. Constitution’s protections of citizens’ civil liberties, such as habeas corpus and due process.

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