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Wednesday, January 24, 2007

Reisman on Tradable Emission Rights and Artificial Scarcity Caused by Environmentalists


In George Reisman's article "How Environmentalism Raises Profits at the Expense of Wages" he demonstrates the economic effects resulting from so called tradable emission rights which are now being promoted in the US http://money.cnn.com/2007/01/22/news/companies/climate_emissions/index.htm?postversion=2007012215
He also shows that "the effect of imposing laws and regulations based on environmentalism is to make land and natural resources artificially scarce relative to human labor and thus to enhance the economic value of land and natural resources while reducing the economic value of human labor, above all, wage rates." In other words, environmentalist restrictions are causing dramatic increases in oil, natural gas, real estate, and other physical commodities which shows up economically as higher profits and reduced wages. He then demonstrates how "a free market operates to increase the supply of useable, accessible land and mineral deposits relative to the supply of human labor and thus to make them progressively cheaper in real terms" concluding that "Environmentalism is a movement dedicated to the undoing of the Industrial Revolution."

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