On the road to Liberty

There is a fine difference between a resource and waste. A waste becomes a resource when someone is willing to pay the owner to acquire it; it remains a waste if the owner has to pay someone to dispose of it. I look at the debate over ship-breaking in this article, " Breaking the set notion ", published in the Hindustan Times, on 13 January 2006. More than 150 years ago, the French economist and legislator Frederic Bastiat had written “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” The present debate over the decommissioned French aircraft carrier, Clemenceau, being sent to Alang in Gujarat for dismantling and recycling highlights the relevance of Bastiat’s idea of “what is seen and what is not seen”. Clemenceau is a 265-m long ship, weighing about 26,000 tons. Recycling it could open ...

My article titled "Poverty, Wealth and Waste" is Reproduced from the March 2000 issue of PERC Reports. The original pdf version of the journal is available here . PERC, a think tank based in Bozeman, Montana, USA, is dedicated to Providing Market Solutions to Environmental Problems. In 1986, a waste-to-energy plant opened in Delhi, India, financed by the Danish International Development Agency at a cost of over $10 million. The plant was expected to generate 3.8 mw of electricity from garbage, and its success was to be copied in other Indian cities. However, the plant was a failure. Two years later, the government was spending about $100,000 a year to burn garbage without producing energy. Surprisingly, the principal reason was the fact that there wasn’t enough urban waste in Delhi. It turns out that the waste—paper, rags, plastic, etc.—in Delhi produces only about half the caloric value of a Western city. This contrast tells us a lot about the treatment of waste in rich and...

A version of this paper "Free Trade Protects Environment" appeared in The Asian Wall Street Journal on 23 November 1999 and The Wall Street Journal Europe on 26 November 1999. Are economic and environmental goals really in conflict with each other? Or can the market, which has proved its ability to meet economic interests of the consumers most efficiently, now meet the environmental preferences of the people as successfully? These are some of the basic issues that the participants at the WTO Ministerial Meeting at Seattle will have to try and answer. The battle lines are being drawn up. While developing countries like India are strongly opposed to any linkage between trade and environment, many of the developed countries are pressing for a working group to look into the relationship between these two areas. However, trade and environment need not be mutually exclusive. Nor need the interests of one be balanced against those of the other. Free trade and an open market, with d...

Liberty Institute Briefing Paper on Trade and Development "International Trade and Child Labour: The role of the market" was published in November 1999. Social and labour conditions have become a highly charged subject, particularly after attempts to link trade and social conditions under the auspices of the WTO. On the one hand, lower labour conditions, including the use of child labour is said to give economic advantage to some countries, and therefore there is a demand for protection in some other countries. On the other hand, these poor labour conditions are said to be the fallout of market reforms and free trade, and therefore there is a demand for restricting trade. No doubt child labour provides an emotive shield for a range of other agendas. However, rather than a restrictive linkage between trade and child labour, historical experience clearly shows that an open market and free trade are the best instruments for improving the labour conditions, including elimination ...

The market is the natural ally of the environment. Environmental resources, like other economic resources can be most efficiently allocated if these are brought under the discipline of the marketplace. It is ironic, therefore, that at a time when the economy is being liberalised, rather than creating a market for environmental resources, new restrictions are being imposed on the economy in the name of protecting the environment. Environmental quality is like a value-added product that becomes economically affordable and technologically viable with economic growth. It is no paradox therefore that the environment is much cleaner and safer in industrially developed countries that adopted a more market-friendly approach, than in centrally planned economies. Clearly, it is policy that is responsible for continued environmental resource depletion or pollution. Let us take a closer look at some of the policies that have had an impact on our environment. According to the WHO, much more serious...