A green’s best friend

HIDESIGHT

A green’s attitude to profit is the best test of both their commitment and their smarts. If they attack profit they are not smart, lack commitment or both.

That’s because profit is the true green’s best friend.

Businesses that make a profit are creating value over and above the value of the resources they consume. They are a net plus to the planet.

Outfits that lose money are a planetary negative. The resources they consume are more valuable than what they produce. They are net burners of resource value. There is nothing worse for the environment.

Power-seeking greenies dismiss prices as too-narrow a measure of resource value.

But there is no other measure of a resource’s value. What’s more, price is common across all scarce resources. Price enables us to compare 100 litres of petrol against a tonne of coal against a day’s work. There is no other measure that allows the necessary trade-off to be made.

Power-seeking greenies want the value they place on particular resources priced above all other resources and above all other people’s wants and preferences.

They don’t back their wants with their own money. Instead, they seek power to dictate what people must do. It’s a very narrow view and, if followed, wasteful of resources.

The price of a resource is the actual value that people put on it. It reflects the wants and preferences of billions of people around the world. What’s more, prices capture the value of all resources.

The endlessly repeated mantra that profits are somehow antithetical to resource conservation is absurd. Profit is resource conservation and, what’s more, the maximisation of the value of the resources that are used.

Likewise, the mantra that money losers like recycling and renewable energy developments are somehow always and everywhere good for the planet is wrong.

A recycling plant that loses money is draining of resources, not contributing to them. So, too, with a wind farm that is a financial loser.

It is easy for greenies and politicians to defend such projects as “good for the environment” but it’s not their resources that are being chewed up in the process.

It’s true many valuable natural resources aren’t priced. The problem here is the lack of property rights. That’s why property rights are a green’s second-best friend. They ensure scarce resources get priced – and conserved.

Far less water would be wasted if water rights were tradeable. It would ensure water was no longer treated as “free”. It’s true, too, that the aesthetic and amenity value of waterways, the air above and native habitat aren’t always able to be captured as private property rights and therefore properly priced.

That’s why some environmental regulation and control is reasonable and why some money-losing ventures can nonetheless be justified. But the case must be made and not just asserted.

Recycling and renewable are never good for the planet just by definition. The answer always is that it’s far better for the environment and nature conservation to be working with the profit system rather than against it.

The problem is that some so-called greenies are no more interested in the environment than the socialists of old were interested in the conditions and pay of workers.

People who want power and control can always find a good cause on which to hitch their wagon. Their aim is to discredit and usurp the system of profit and loss.

After all, that's the very system that puts power and control into the hands of workers and consumers, not theirs.