Marketing the Market

An outtake from "CEI's Fred Smith is Marketing the Market," an interview with CEI founder and president Fred Smith, published in the March 2000 Navigator.

Navigator: Even reliably pro-market politicians seem to turn mushy when it comes to the environment. William Weld of Massachusetts would seem to be an example. As a player in the free market environmental movement, how do you respond to the widespread sentiment that some things just should not up for sale. For example, how do you respond to the belief that those who want to keep the Grand Canyon as a pristine natural site should not have to outbid Disney?

Smith: No Objectivist should be surprised that politicians are rarely principled or structured in their approach to policy. Politicians operate within a "zone of acceptability" and rarely seek to broaden such restraints. The challenge to those who champion economic liberty is to make our policies "acceptable" to enough of the populace to ensure that politicians feel "safe" endorsing them. That requires documenting the tremendous environmental successes and potential of private institutions.

Free market advocates have not invested adequate resources in that effort. As I've argued elsewhere, I believe we should spend more effort developing a public understanding of the way in which the basic institutions of liberty (private property, voluntary exchange, responsibility-based liability rules, and the rule of law) might evolve to address and account for environmental values. We have a massive "catch-up" task because the progressive movement has led many to conclude that all problems can most effectively be resolved politically, even though history teaches us otherwise. Private conservation has a long and proud legacy in this nation that has been discarded by today's environmental establishment.

To argue that certain environmental resources are too precious to be owned is to leave those resources more vulnerable to the predations of politics and special interest influence. How many are aware that the first two park rangers killed in the line of duty in this country were not employees of any government, but employees of the National Audubon Society, hired to protect private bird sanctuaries from poachers around the turn of the century? Were it not for private ownership, the American bison-the symbol on the Interior Department's seal-would likely be extinct. Private conservation saved this species, and many others, just as it has protected natural and historical treasures ranging from Grandfather Mountain, to Virginia's Natural Bridge, to Mount Vernon. Were it not for federal policy, it is likely that we would see a privately owned Yellowstone Park-and one better managed than we have today.

Simply put, the aesthetic and "spiritual" values that drive calls for preserving wilderness and undeveloped places are more likely to be advanced in private hands. Educating the "chattering class" and political elites of this fact is a significant part of CEI's mission. CEI's Center for Private Conservation seeks to popularize private environmental successes and analyze the institutional arrangements that make these successes possible. If the free market movement can convince much of the American public that their children are too precious to be left in the hands of government bureaucrats, we should be able to do the same for environmental resources.

Navigator: The material that CEI produces on global warming seems to focus on questions of science. Yet, your mission is to advance free enterprise and limited government. Hammering the science seems to suggest that there are certain circumstances under which free enterprise will not work, and therefore you are determined to prove those circumstances are not in the offing. Would it not be more effective to say: "If the facts turn out to be thus-and-so, the free market solution is B." If there were a free market solution regardless of how the about global warming turned out, wouldn't those who want to use it for a power grab be less motivated to skew the science?

Smith: This is a good question but it suggests only a partial understanding of the nature of a free society and, likewise, what CEI's role is in advancing that goal. First, a free society will face many problems-including potential anthropogenic disturbances-for which no obvious "free market" solution exists. What, for example, is the "free market" solution to an insane dictator who wishes to control or destroy the world? We can't "buy him off," and we can't let him win. That we have no answer to the challenge is true, but so what? We don't have answers for all problems; we merely believe that such answers are more likely to emerge in a free world than in a politicized world.

Nonetheless, although I do not believe that we are obligated to present a "solution" to all problems (that is the constructivist risk that Hayek has discussed), CEI has considered how a libertarian world might create and maintain such valuable resources as the atmosphere. In brief, the original settlers would purchase air for their shelters and purchase a space around their shelters for discarding waste gases. Services to supply air via piping and to handle waste disposal in the same way (recall waste gases would have some value for their heat content alone) might emerge. In time, larger "urban" airsheds might be created (super-domes) with zoning rules to ensure compatible airshed use and mandatory venting for "conflicting" airshed uses (McDonalds, for example).

But CEI's overall approach to the global warming issue is more comprehensive than just outlining the potential market solution to global warming. The science of global warming is a key element of the policy debate, and the statists are using the science argument as a weapon to further regulation.

The environmentalists and global government idolators want the Kyoto treaty for their own, definitely anti-freedom ends. Consequently, they are willing to twist the science into any shape necessary to convince people that catastrophic global warming is just around the corner and it is all our fault. The real scientists-the climatologists, oceanographers, and astrophysicists-are still working on and debating the connection between greenhouse gas emissions and climate change, but a clear consensus has emerged that alarmism is unjustified. Furthermore, most ecologists and economists have concluded that the effects of the predicted range of possible global warming will be of net benefit. The disadvantages will be outweighed by increases in biodiversity, higher crop yields, and so on. And adapting to any negative changes will be far less costly than trying to control climate change, which after all happens naturally (geologists call this the interglacial period).

CEI believes that if we let the propagandists convince people that the science of global warming settled, then we will be forced to pursue a "solution" to a phony problem that will necessarily make us much less free and much poorer.

Navigator: How do you assess the domestic ideological impact of the fall of the USSR and its empire?

Smith: The collapse of the political system seeking to make collectivism work in its most pure form has been very significant, although that significance was foreshadowed by the earlier collapse of intellectual and moral support for it. The book The God That Failed signaled that collapse. It entailed the realization that the USSR was actually a gigantic fraud. That Soviet statism had advanced no solutions to any significant human problems presented the Left with a monumental problem.

Unfortunately, classical liberals are still not well understood in popular culture. Our lack of a persuasive and compelling counter has allowed the Left to regroup and to retreat to their "Third Way" model. Communism has failed, but capitalism is still viewed as too harsh, too limited, to address the spectrum of human problems. That is especially true in the range of safety, health, and environmental areas. The resultant regrouping of collectivist sentiment to achieve the Great Society by regulation (always the less honest American version of socialism and progressivism) creates great problems for freedom. Eco-socialism is no more likely to advance ecological goals than socialism does human goals-but too many people still view these egalitarian areas as the natural playground of the coercive state.

Navigator: At the Objectivist Center's 1998 fall conference, you argued that Americans of all philosophies and creeds could find common ground on restoring the country's liberty, that it was not a necessary first step to restore any particular underlying philosophical base for liberty. Could you explain why you find the latter position mistaken?

Smith: I am heavily influenced here by the work of the late Aaron Wildavsky, a libertarian convert who spoke well to the broader intellectual and cultural community. His work suggests that people are indeed rational: they are unlikely to spend much time becoming educated about things they can do little about. It is in this sense that they are rationally ignorant about many things that we, as libertarians, find central to our thinking (for example, the philosophical underpinnings of a free society). In their private actions, people spend reasonable time educating themselves because their choices affect their welfare, and their knowledge influences and informs their choices. They make mistakes, of course, but find such mistakes painful and therefore [mistakes] can be educational.

However, in their role as citizens, as voters, people find knowledge of little value because of their scope of influence over this choice. The informed voter has little more influence than the uninformed voter. As I've summarized elsewhere:

In politics, people aren't stupid because they're stupid!

They're stupid because they're smart!

Thus, if we try to make them smart, we're being stupid!

People have opinions but those opinions are rationally not educated opinions. They are opinions on the "right things to be done" and they are important because they define the parameters of the politically viable range of options considered. I believe our challenge therefore is to influence those opinions, recognizing that for most people, education will not be the most effective strategy.

What does influence opinion and what can libertarians do about it? Again, borrowing heavily from Wildavsky, I believe that people view political/policy questions in a very shallow way-they look at the issue and quickly decide whether they believe that the policy advances or threatens their core values.

What are those values? Aaron argued that we might well focus on three values when evaluating policies, all of which have important effects on our world. The first is individualism, the libertarian value of freedom. Does a policy expand or diminishes our choices, and ultimately our freedom? The second value is hierarchy, the conservative value of order. Will that policy make the world more or less orderly? Lastly, egalitarianism: will that policy make the world more or less "fair"?

Aaron's student Richard Ellis noted that America was able to institute checks on government because both individualists (such as Thomas Jefferson) and egalitarians (Thomas Paine and Andrew Jackson) saw central political power as antithetical to their goals. That individualist/egalitarian alliance checked the pro-central power views of the conservative/traditionalist hierarchists (Alexander Hamilton, for example). That alliance was gradually destroyed by progressive intellectuals who persuaded the egalitarians (always impatient over the slow progress of free societies toward justice) to take up the cause of states.

Our challenge in that context is to restore skepticism about the egalitarian (and for that matter, hierarchic) value of government. We're beginning to do that in a range of fields, from education to health care, to welfare, even to environmental protection. People don't have to agree with our philosophy if they agree with our goal of restoring the institutions of liberty. Catholics and Protestants did not have to agree on matters theological to agree on the policy of separation of Church and State.

Navigator: You recently wrote: "People encounter a policy proposal and quickly assess whether the reform seems to advance or threaten their core values-then they support or oppose the idea accordingly. Not much time is spent on the assessment; but the results are important, and we should seek ways to show how our policies advance their values. There's not much we can do to change people's values, and issues are what they are. But, we can (and should) positively link our policies with their values." Objectivists would probably agree with the first half of your statement, substituting "political principles" for "values." But they would ask: Why do you hold that "there's not much we can do to change people's political principles?"

Smith: We may be dealing in semantics here but I do not regard political principles and values as synonymous. I see value as a belief. Political principles as the views one holds as to what means are legitimate and effective for allowing each of us to pursue our own values. For example, an individual might be Catholic and believe that anyone who fails to convert will lose his infinite soul. Despite his beliefs, he cannot be allowed to coerce others into becoming Catholic; the political principle of separation of church and state limits that option.

Along these lines, my highest value is liberty-the freedom of an individual to make his or her own choices, subject only to the restraint that he violate no one else's property rights. Yet I am aware that others place higher values on order or fairness. I can (and do) seek to persuade them to recognize liberty as a higher value, but I rarely succeed. Nonetheless, we may well reach agreement on such political principles as freedom of speech, separation of church and state, prohibitions on the ability of a church to retain members by force, and so on.

Individuals valuing freedom are likely to endorse a political and institutional system that espouses such liberty. However, not everyone holds freedom as their highest value, and I don't think we can do anything to influence that decision. We can, however, seek to clarify how a free society provides greater order and fairness-and thus possibly gain the support of non-libertarians to create and maintain the institutions of freedom.

Navigator: Perhaps, more challenging still, for Objectivists, is the idea we try to sell our policies as exemplifying principles (political or otherwise) that we think are wrong. You suggested: "Tax reform advocates might well focus less on the "It's your money" argument and more on how reduced taxes would extend the job expansion trends of the last decades... That is, we should argue for tax reform on egalitarian grounds." Doesn't this run directly counter to the message of Ayn Rand: that unless the Atlases are prepared to stand up for what is theirs, they will be crushed by the altruists' burdens, even though the altruists will go down with them? Isn't this "the sanction of the victim"?

Smith: No. First, while I passionately agree that we're right and others are wrong, I believe that people have the right to be wrong. That is, while we should seek to proselytize, we should not be surprised that others will hold other values higher than liberty. This does not mean that such individuals cannot be allies in the fight to preserve and maintain economic liberty. Indeed, Aaron Wildavsky and, more explicitly, Richard Ellis, argue that America's uniqueness -our long resistance to the growth of federal power-reflected the shared belief among egalitarians and libertarians that we should avoid any centralization of political power. Even Hamiltonians were aware that central power could be abused. That perspective argues that we should explain to people who do not share our values why on their grounds they should favor our policies. We are not being dishonest or disingenuous in first respecting the value differences that do exist, and, secondly, seeking to understand them well enough to provide a reason why they should nonetheless agree with our policies.

Ayn Rand's work on "Sanctions of the Victim" illustrates something very different. She discusses (and is disgusted with) the failure of those who do create wealth to respect their accomplishments. That point is critical and, indeed, is one of the primary political points made in her work. Rearden's failure is that he does not understand that he is right, and that the attitudes of his wife, brother, and friends are wrong. Like so many modern businessmen, he thinks that the philosophical principle of understanding the value of one's work is abstract and unimportant. Thus, defenseless at the cocktail party, he finds himself hiring a Wesley Mouch (and I meet him every day in Washington) to "defend" his firm. He fails to do anything effective (until his withdrawal of production-a Romantic concept) to counter the statist attack on his business.

Rand's work never focused deeply on what role we should play in restoring a society of liberty. She did suggest that one make ad hoc coalitions to push forward liberal policies wherever possible, that we not seek to create a political party and that much of the success in the policy process would depend upon events outside of Washington-all very, very true. Stylistically, I doubt that she would have ever found it easy to advance the case for some specific reform on egalitarian or order grounds. However, egalitarian values need not mean the paternalistic welfare concepts portrayed by Rand. They can mean the equal opportunity concepts that most of us champion. If we believe that the free society provides those opportunities better than its alternatives, why shouldn't we present that case to those who are unaware of it? I see no duplicity in allowing people to agree with our ideas based on their values. It would be dishonest for us to claim that we share their values fully or to claim a policy that would harm their values. But that is not what CEI seeks in this area.

Just because we're right doesn't mean we should lose! We should make it possible for people to consider both our ideas and our ideals, but they need not fully accept the latter to become allies in the former area. Moreover, do we really want to live in Galt's Gulch? Aren't we at least amused in discussions with our sister-in-law or friend, hearing their foolishness about "corporate greed, the virtues of organic food, the disparities of wealth?" America is not and may never be a libertarian nation, but we can be a nation of liberty - that is worth much in itself.