reviewed by MC5, October 18, 1999

University of Minnesota Law Professor Daniel Farber has written a book reflecting some of the views of the ruling class concerning the environment and economics. Law professors at the University of Chicago, Yale and Georgetown have recommended the book. Its focuses on cost-benefit analysis and the environment are sure to make it influential and reflective of what the ruling class already thinks. For the environmentalist movement, however, Farber's book is a very dangerous Trojan Horse, because it claims to take the side of the environmentalists against the "bean-counters" mostly.

Distorted picture

The recurring question raised by the book is "Should we spend $10 million to save a single life?"(p. 133) Farber does not show that the majority of environmental struggles raise such a question; yet the "pragmatism" in "eco-pragmatism" refers to his willingness to consider the problem while supposedly "tree-huggers" are not willing to consider the problem because of their "religious" intransigence "'like the Marxists before them.'"(p. 8)

Farber would claim that he is for environmentalism when the costs are not too great, but by raising the same distorted question over and over again, he leaves a different impression of the environmentalist movement. Unfortunately, the pseudo-environmentalists have opened the environmentalist movement up to the kind of attack that Farber lays down. By failing to connect their movement to the economic theories of Karl Marx, some calling themselves environmentalist are setting the movement up for the kind of fall Farber has in mind.

His paradigm example is a legal case in which a mining company was dumping asbestos into the drinking water of Duluth, Minnesota. Although exposure to asbestos had long ago been proven very dangerous, Farber raised the typical legal nitpick that no one had proved that drinking asbestos was unhealthful.(p. 22) Studies had never been done regarding drinking asbestos. Farber's tactics are to agree with the environmentalists and then dissect the case thoroughly from the point of view of cost-benefit analysis.

Covering the ass of the ruling class

Since the 1970s, the Amerikan ruling class has been aware that the masses might connect the environmentalist movement to Marxism. This fright caused Nixon to sign environmental legislation with the hope of confusing the people politically.

Those who know MIM's politics know that it is rare that MIM will agree with the average Amerikan, but the average Amerikan agrees more with MIM than the Democrats or Republicans when it comes to the environment. This is not "false consciousness" by the petty-bourgeoisie of Amerika but a reflection of the reality that capitalist economic competition is harmful to the environment and there is nothing that can be done about it within capitalism.

MIM has yet to channel the people's sentiments behind its scientific plan for environmental protection: the false consciousness we must battle concerns the strategy and tactics that will be necessary for this battle. The sentiments and self-interest of the non-imperialist classes already dovetail with the MIM line when it comes to the environment.

Farber shows an awareness of the problem for the ruling class. A fact that really rankles Farber is "in 1989, 80 percent agreed that '[p]rotecting the environment is so important that regulations and standards cannot be too high, and continuing environmental improvements must be made regardless of cost.'"(p. 2) He notes an estimate that the Superfund environmental clean-up project of the U.S. Government saves one life per $4 billion spent.(p. 4)

The depth of this problem for the ruling class shows in that a majority of the Republican Party does not trust its own party when it comes to environmental regulation.(p. 3) Thus, when it comes to the environment, the Rocky Mountain people, cowboys and rednecks actually agree with MIM more than the Republican leaders.

The strategy of Farber is to enter this scene and concede nicely to the environmentalists by saying that the presumption in law should be on the side of environmental protection. Yet, he says that environmentalists should be required to enter into dialogue with economists, specifically neo-classically trained economists wielding cost-benefit methods. Most of his book is actually an attempt to force engagement with these "bean-counters." By raising the question of $10 million per life over and over again, Farber and others using the strangle-by-anecdote method will seek to cool out the struggle of the people for the environment.

Despite his admissions above, Farber says in his conclusion: "For better or worse, there is no sign that we are prepared to give up what American consumers now regard as the basics of the good life. Economic growth is not something we are prepared to abandon in the name of environmental protection."(p. 200) The survey he pointed to in 1989 would seem to contradict his own belief, a belief he would call "paternalist" if expressed by a Marxist.

Marxist counter-attack

Farber and his kind will succeed if we Marxists do not inject more radical economic theories into the movement. We must take what we learn from Marxist political economy and know how to apply it to these questions raised by Farber. His book has many admissions and omissions that show that neo-classical economics and law which start with narrow assumptions really should not be used to handle questions concerning $10 million per life saved. Most bourgeois economic theory is created for only a very narrow range of assumptions.

1. Ignoring production.

Any time we are faced with cost-benefit analysis, we must ask cost-benefit analysis of what and when. Most of the mistakes get made long before cost-benefit analysis gets applied.

Misled by his own neo-classical economic agenda, Farber did not actually provide any details about the production processes that required the mining in Duluth, Minnesota and whether there were any substitutes possible--largely because he assumed the existing distribution of property, techniques and reward structure. Ignoring production and stressing exchange and consumption is typical of neo-classical economic thought. The neo-classicals just are not as interested in these questions as Marxists are and prefer to assume most aspects of the existing production situation. When the people are so upset with the environmental situation it should be obvious that they might be willing to do without some of the status quo assumed by economists.

2. Commodity fetishism, poor choice of efficiency definitions.

The way that Farber wields that $10 million figure it clearly has a life of its own. According to Farber, the public is to envision that it is $10 million coming out of its pockets or maybe the public should realize it is not serious about environmental regulation or has "pragmatist" limits.

It is a typical mistake of neo-classical economics to get caught up in dollar figures and consumption. The neo-classical notion of efficiency in saving lives is highly flawed. If there were full employment in the world, it would be one matter; however, $10 million is really only a certain quantity of ability to make people work. In fact, it should be thought of as an amount of work.

We Marxists are "classical economists." We think in physical terms. Since the labor of hundreds of millions is not used every year and is thus wasted, inefficiency stems from not utilizing labor. Inefficiency does not stem from distributing green-colored paper to employ labor. As even Keynesians may admit, spending $10 million may have a multiplier effect that results in higher employment and wealth and the $10 million spent may not be felt by anyone as if it were out of their pockets.

If the people are as serious as the polls on the environment indicate, the borders should be opened and the money spent to employ more people so that more work can be done for the environment. Farber did not consider this possibility, again because the neoclassicals only consider a very narrow range of ideas when discussing U.$. policy. They assume the status quo and only tinker with the implications of the smallest changes. Since the people have said standards cannot be high enough and change for the environment should be done without respect to cost, neo-classical economics is obviously not appropriate.

3. Subjective preferences cannot be measured.

The propaganda for free markets goes that it allows a form of participation. We see people implement their "preferences" when they spend money say the bourgeois economists. "Consumer is king" is really the central dogma. Spending dollars is like voting in elections.

However, the facts are that it is increasingly well-known that people are inconsistent in their subjective desires and certainly those desires cannot be measured, especially in regard to public goods like clean air. Trying to figure out how much to tax or spend regarding pollution is impossible in the free market context. Thus, the notion that neo-classical economics is a science is a fallacy.

As MIM said in its review of "Against the Gods," we already know that the masses' subjective preferences cannot be measured. Farber is also aware of this. We just want our readers to understand that this fact is a blow against the neo-classical economics Farber uses.

Farber admits that the survey techniques called "contingent evaluation" aimed at calculating how much environmental protection the public wants don't work. He does not believe the numbers the public gives in those surveys;(pp. 49-51) although the neo-classicals are usually supposed to say "consumer is King" and accept at face-value whatever subjective desires the masses express. It is us Marxists who do not take subjective statements at face-value, because we believe subjective statements are merely a reflection of underlying violence in power relations. We are not surprised that they exist in contradiction while violent class and national conflicts have not yet been worked through successfully yet. The masses have aspirations beyond what they find and express in the status quo.

What is worse for Farber is that market research as a whole has shown that it is futile to ask the public its preferences. While his methods assume that the public is actually all-knowing or his free market will fail in its own measuring rod of efficiency, in fact, he admits that the public is not very good with probability and statistics. Moreover, he makes an admission undercutting all of neo-classical economics: speaking of consumers, "they will favor a medical option when told it has a 20 percent chance of saving their lives, but shun it when told it has an 80 percent chance of failure, though the two are equivalent."(p. 85) In other words, when the public spends its dollars, it is not really spending it in pursuit of nicely ordered and rational preferences. What it is doing with that money cannot be gainsaid. The irony in all this is that it is an even squishier pseudo-science--psychology--which revealed this to the neo-classical economists; even though the psychologists also stood to lose hope for their field with such findings.

Such are good reasons to go back to the methods of Marx and stick with physical reality.

4. Assumption of existing property distribution.

Farber himself points out that if environmentalists own the rights to whaling, then the result will be different than if the whalers own the rights to whaling. According to consumer-is-king theory, the environmentalists should somehow gather up the money to pay off all the whalers not to kill whales. (The impracticality of this and keeping new whalers from arising does not concern these dreamers.)

On the other hand, Farber recognizes that if property rested with the environmentalists first, then it is not likely that whalers would collect up the money to buy off the environmentalists. Hence no whaling would occur if the environmentalists owned the property. So when a pod of whales is swimming at sea, who owns them? That is what determines whether they will be killed by bourgeois economic theory.(pp. 99-100)

This is just another way of saying that neo-classical economics starts with the assumption of the existing property distribution and has nothing to say about results given changes in the distribution of property. It was not meant for that.

5. Changing preferences.

Contrary to the scenario that a free market functions with information flowing freely, environmental information includes many relatively recent discoveries. These discoveries then change the preferences of the public. For example, refrigerators and aerosol cans that destroyed the ozone went out of demand and we believe the public was happy to see legal bans in connection to the matter, and not just a persuasion of one consumer at a time.

The fact that it took coordinated scientific endeavor, funded by the government, to reveal many environmental truths is not accounted for in neo-classical economics. Anything affecting something like the ozone (free to all) is not accounted for. The counter-attack of the neo-classicals has been to say that the ozone and air pollution rights should be sold off by the government. They thus seek to force the environment into their dogmatic individualist straight-jacket, as if the air, land and water could be parceled off into individual pieces and polluted or not polluted accordingly.

The economic Liberals accuse us of using force instead of respecting the wishes of the consumers, but in reality, economic and political power already does shape the preferences of the public. We only believe it should be done scientifically and not based on who owns the most property and can thus afford to distort information available to the public the most.

We believe the public agrees with MIM on this and not the economic Liberals also known as libertarians opposed to regulation. The public prefers to be educated about the environment and prefers to have experts hired by the government in such matters. The public expects its preferences to change and has no difficulty in supporting research that will change those preferences. The public does not want that only for-profit sources of information exist. When Farber says that we are being "paternalist" for saying so(p. 62), the public does not agree.

6. No consideration for alternative conflict resolutions.

Farber correctly points out that if the Duluth, Minnesota mine had to close down because of economic regulations, some people would have become unemployed. It has been proved that unemployment causes death in a variety of ways including suicide from loss of "self-esteem." One estimate shows that $37 million in environmental regulation causes one death by its damage to the economy.(p. 30)

We have to say that this is true within capitalism. Under socialism, however, everyone is guaranteed a job. No one has a reason to resist environmental regulation on account of his/her job. Losing one job just means taking another with no loss of income. The fact that environmental regulation hurts the capitalist economy only proves that it is time for the capitalist economy to go. Capitalism was not meant to solve these sorts of problems, while scientific economic planning under socialism is perfectly compatible with environmentalism.

Dictatorship of the proletariat

Unlike the current situation of dictatorship of the bourgeoisie, we Marxists admit that we aim for an interim dictatorship of the proletariat. We do not prettify it by calling it "free labor" or "free market" or "democracy" or the like. There is force involved.

Farber's discussion of public goods and associated game theory should be addressed by a Marxist theory of the dictatorship of the proletariat. Farber admits that the masses might vote for an environmental action that they would not be willing to pay for in a free market. Economists and people like Farber are often less respectful of political democracy than the "free market."

Farber admires Cass Sunstein who does exactly what MIM has been saying our opponents do all along: s/he advocates that people negotiate away their survival rights. "No one is entitled to say: 'I have a right to a safe environment, and the burden is on anyone who seeks to infringe that right.' Nor are the regulated parties entitled to say: 'I have the right to use my property as I see fit, and the burden is on anyone who seeks to modify that property right.' There is a level playing field."(p. 103)

Our Eastern comrades will have to forgive us, but this is the closest that the Western culture gets to understanding class conflict. The persyn at risk of death by pollution has equal or maybe even lesser legal rights than the persyn making a profit. That is what dictatorship of the bourgeoisie is all about.

What is dangerous about Farber is that he seeks to persuade the proletariat to give up its survival rights in the name of cost-benefit analysis. He wants the proletariat to tire of the environmentalist struggle by telling it about its costs. In contrast, we socialist planners say to the proletariat: "look, there is work to be done cleaning up and improving the environment; yet everywhere there is unemployment in this world. People die from pollution and unemployment. That is the inefficiency of capitalism and it cannot be tolerated anymore."

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