Why Markets Are Pro-Human

In an unhampered market economy, entrepreneurs anticipate what we want and need and then use labor to turn land and natural resources into things that are most urgently needed: like houses, schools, hospitals, food, cars, and energy. Consumers respond by either buying or not buying what entrepreneurs have produced. The resulting profits and losses provide signals and incentives to the entrepreneurs in such a way as to encourage economizing behavior and discourage its opposite, waste.

To economize simply means to do the best you can with what you have. Since our limited set of available resources can be used in multiple ways, we have to make choices over how to use them such that we attain our most important goals and forgo less important goals. The inescapable logic of this fundamental fact of life applies just as much to land developers as it does to somebody perusing a menu at a restaurant.

There are a few built-in checks on what businesses do to nature and the environment. One is that entrepreneurs have an incentive to maintain whatever resource is making them money. Such a thing is dependent on time preference, but most would prefer $20 million over the course of 20 years to only $2 million in one year. Notably, lower rates of time preference, a characteristically Austrian prescription for economic growth and human flourishing, also leads to long-term care for the resources that generate wealth.

Environmentalists Shut Down Land Development

A recent case in the UK highlights the environmentalists’ opposition to human flourishing.

Barwood Land, a land development business, submitted plans to build houses, schools, and a medical center (things humans want and need) on the outskirts of York. They knew that the land was close to Askham Bog, a nature preserve protected by the Yorkshire Wildlife Trust. So they included a 125 meter wide band of buffer zone between any development and the adjacent bog, which would actually prevent the current encroachments into the bog through its northern boundary. According to their application:

Most notably, this includes a 125m wide Ecological Protection and Enhancement Zone (EPEZ) along the shared boundary with the SSSI, which separates the SSSI from both residential development and public open space and will prevent uncontrolled access into the SSSI which currently occurs along its northern edge.

In the illustration below, you can see Barwood Land’s plans include new housing and recreational areas, but also the buffer zone which extents even beyond their development plan. The new housing would certainly ameliorate what the Local Democracy Reporting Service (a BBC partner) has called a housing crisis in York. By my rough calculations, house prices in York have roughly quintupled UK inflation over the past 20 years.

What the above image doesn’t show is that a golf course already almost completely surrounds the rest of the bog. Also, the land in question is currently used for farming, which has its own environmental impacts. It isn’t clear to me how new development with a buffer zone is any worse than the road, golf course, and farmland that are currently adjacent to the protected land.

The plans, however, were rejected by the city council after Sir David Attenborough and the Yorkshire Wildlife Trust came out against it. According to Attenborough, who was “disappointed” with the development plans:

York is exceptionally fortunate to have such a wonderful place within its boundaries — why would anyone want to put that at risk?

The YWT said the bog contains “an incredible richness of plants.” Regarding the city council’s rejection, they said that they “couldn’t be happier with this outcome.”

Land Developers Care about What Consumers Care About

What the building plans show is that land developers are conscious of their consumers’ values for nature. This is another check on what businesses will do with nature in an unhampered market economy. Simply allowing land developers to do whatever they anticipate will be profitable doesn’t mean that the earth will be full of high-rise apartment buildings and dirty factories. The reason is because profit-maximizing choices must be consumer-satisfying choices, and many consumers value undisturbed, undeveloped nature.

The conclusion is that we get exactly as much nature as we want. It’s true that people like Sir David Attenborough will be “disappointed” sometimes, but he would still have a say by participating in the market economy and peacefully encouraging others to value the same things he values. Wouldn’t this be a better scenario than some loud environmentalists having the ear of city councils with the authority to prevent land developers from anticipating and responding to everybody’s preferences over the use of land?

The most recent census says that York has a population of about 200,000. This article says that David Attenborough and the YWT gathered 7,600 people to “object to the proposals.” It’s unclear if those 7,600 people are from York, but even if they are, what is preventing them from pooling their money together to purchase the land and let it sit unused? Shouldn’t environmentalists put their money where their mouths are?

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