Own the Air?

I realized that I was becoming a stuffy economist just recently, when I was listening to one of my NoFX CD’s. Their song “Eat the Meek,” decries the culture of mass-production/comsumption in which we live, and point out the dangers of us allowing everything to be commoditized. I don’t know why after years of not only listening to this song, but studying economics, that these lyrics didn’t synch in my mind, but a few weeks ago I was driving home from work and the two finally met.

“You know there’s always gonna be pedigree
One own the air, one pay to breathe”

And the first words out of my mouth were, “Good luck trying to establish sound and enforcable property rights for oxygen.”

And then I realized that I was becoming more like my father. And I openly wept.

However, it is an argument that I have heard from those who are anti-captialist and anti-market. I grew up in the Bay Area, known for being a very liberal demographic, and in discussion with peers and teachers I would be told that if we left markets and businesses up to their own devices, we would reach a point where we would have to pay for breathing. I understand the fear of allowing things in life to be avaliable for purchase and profit…but oxygen? Really? Arguments like these are based completely off of emotion, and what I believe to be a fundamental ignorance to basic economic and business principles. There is no way, on a large scale (I will explain later), for a person or entity to make oxygen a private good.

First off, what is a good? And how do economists’ classify them? A good is…well a good. It’s one of those things that you know what it is, but it’s difficult to explain. A word you use in conversation all the time, but when asked its meaning, you stutter and cannot articulate. A good, essentially, is anything consumable. This includes tangible and intangible items, free and for profit, and even services and ideas. The product of a factory line you buy at the store, a drink of water from the stream behind your house, a lawyer or even a social networking site.

In Economics, we place these goods into 4 categories; public, private, club, and common. They are all relatable in two regards; their excludability, and rivalry. By excludability, we mean that someone can be barred from consumption. By rivalry, we mean that one person’s consumption affects all other’s ability for consumption. In either case, the presence of exclusiveness or rivalry imply a finite amount of whatever good is being consumed.

A private good is any good which is both exclusive and rivalrous. My house is a private good. I can exclude your use of my house, and my consumption of the house and the land denies your ability to use the land for your own purposes. Most commodities fit into this category; food, clothing, consumer electronics, etc.

A club good is any good which is exclusive, but non-rivalrous. An example here is like a country club, or a lawyer’s services. My consumption of a country club memership does not take away from anyone elses, but the membership is exclusive in the fact that only paying members, or sometimes legacies, can join.

With private and club goods, there is an owner or group who has established clear property rights for their good or services. A product available only for purchase, an idea trademarked, a pool enclosed behind a gate, all establish property rights for their owners, and allow them to seek legal action against those who infringe on their property rights. The next two types of goods, common and public, do not have these clear property rights, because they are non-exclusive, or simply, nobody owns them, sonobody can take legal action against another party based on use.

A common good is any good that is non-exclusive, but rivalrous in consumption. The most famous example of this type of good is illustrated in a theory called “the tragedy of the commons.” There is a parcel of land in an agrarian society, where all the farmers are allowed to let their animals graze. However, because this parcel is free to the public and no one is barred from using it, there is no incentive for its users to limit their use of it despite the fact that the parcel is in a limited supply. In a large group, this is called the diffusion of responsibility; I will let my animals graze and take their fill, but it’s up to the other guy to limit their animals intake. If everyone thinks like that, then the land is soon over-grazed, and nothing is left to consume.

Lastly, a public good is any good that is non-exclusive and non-rivalrous. Oxygen falls under this type of good. Short of someone forcing their hands over your nose and mouth, there is no way to exclude anybody’s consumption of oxygen. Second, it is in limitless supply, therefore there is no rivalry in consumption. My breathing, no matter how deep or how often I breathe, does not affect anyone else’s ability to do the same.

Now earlier in this post, I said that oxygen, on a large scale, is impossible to be made a private good. I said on a large scale, because for the most part, people will not pay for something they can get for free. But, then again, some will. There is a subset of the aroma therapy industry that caters to consumer’s demand for “cleaner, fresher” oxygen. The first “offical” oxygen bar was opened in Toronto CAN in the mid 1990’s, and from there the fledgling industry spread, offering citizens a “richer” oxygen percentage than what we breath regularly from the atmosphere. They market it as a way to excape from breathing the particulate and polluted air from the industrialized world, and you can even pay for the oxygen to come with different scents.

Come. On.

I think it’s stupid, and someone who pays for what they can get for free (if you want to smell apples, then, I don’t know, why not cut up an apple and sniff?) may be at a questionable level of intelligence, but…damned if I won’t defend it. This is consumer demand. If people want to blow their money on oxygen bars, they should be able to. Breathing to live is a neccesity, but paying to breathe is a luxury.

In sum, it is impossible for there to be corporate take-over of the atmosphere. Zero. There would be no way to enforce it. You cannot fence off oxygen. You cannot build a room and hoard it all inside. You cannot have half of the populaiton put their hands on the throats of the other half and refuse to let them breathe until they pay.

Or maybe I shouldn’t take the song so seriously…

“There’s no government, like no government…”

I am not an anarchist.

Though it you ask my father-in-law, I am. Actually, he calls me a hippie. But that’s okay, because he’s a war-mongering facist. We like to keep things on an even keel…

However, in moments of passion, in debates, or just for the hell of it, I fall back on anarchistic rhetoric, hence the title of this post. Arguments made by Lysander Spooner, Von Mises, and David Friedman, pepper my own. But as I said, I am not an anarchist, truly, though I do sympathize with their ideals, their rhetoric, and their beliefs.

I understand where they come from. I understand the fear and anger that lies in the hearts of those who see an ever-growing State that seems to take more and more liberties and freedoms away from the people. From a state becoming larger, threatening to extinguish the hallmark of America that once was the land of opportunity and choice. There are many reasons why this is happening, but I won’t focus this post as to the reasons why, though I will say it is entirely our fault, the result of an ill-informed (by choice), gullible, and lazy voting populous, which we have been incentivised to become. I believe that individuals are rational, but groups of individuals are not. I mean, for God’s sake, under our watch we have seen Federal spending increase 9,807% from $37.4 billion in Q1 1947 to $3,705.2 billion in Q1 2012, and we sit back and let it happen! (Figures provided by the Federal Reserve Database)

Really, it’s hard not to focus my entire post on that, but I’ll force myself to stay on topic.

While I understand the fear, anger, and even hatred towards a centralised government that defines anarchism, I do not believe true anarchism is possible in this world today with things the way they are. I believe that there are two factors preventing this world from knowing true anarchism.

But first, what is anarchy? Isn’t it just chaos, dog-eat-dog, unruly mob mentality? Well, no. Though critics of the ideology want you to think that, know that it is a scare tactic to keep you complacent and willing to accept governmental authority, as it is the only thing keeping us from the world of robbers, thieves and murderers that would be anarchy! Anarchy, in it’s true definition, simply means “without rulers.” Not without order, not chaos as it has been come to be defined in the colloquial sense, but without forceful, coercive rule.

I earned my bachelor of science degree in Economics from the University of Nevada Reno Business and Clown College, and though you may not think of it as one of the best, most reputable schools in the nation, the Economics program is blessed with some of the finest professors from around the globe, who not only expertly teach us micro, macro, economic development, and public choice theory and application, but how to juggle, wear big floppy shoes and take a pie to the face. As an economist, I believe that people respond to incentives (a reoccuring theme that will highlight many future posts), I understand consumer theory and believe in the rationality of the individual, and hold strong feelings against Collectivist mentality. As such, the two things keeping the world from anarchism can be classified by consumer demand, and a battle between Colletivism vs. Individualism.

The first of the aforementioned preventions of anarchy is how large we live. Not in terms standard of living, wealth, or disposable income, but instead from how big our societies are. When you reach the population threshold that separates tribes and communes from states and nations, anarchy becomes a practical impossibility. When you reach the level of state or nation, there are certain things that private companies and individuals cannot accomplish on their own. These are a standing military for national defense, a court system for individuals to dispute property claims, and a police system to enforce court rulings and protect the citizens of the state or nation from physical violence against each other and one another’s property. I believe David Friedman’s theories of law as a private good are fascinating, and I believe in smaller societies it absolutely could work, but in a world with nations as large as America and China, the establishment of a military, of police, and of courts could not function on a private, market based mechanism. This is because we as a society, as consumers, demand that these things be a not-for-profit nature, which could be disputed and argued against as politicians, judges, and policemen can be corrupt and for sale, but on the whole, as consumers we place our faith in these officials to be right and just men and women. Whether good or bad, we demand that these activities be centralised in the hands of the government.

The second obstacle to anarchy is a fundamental lack of respect for the rational free-choice mechanism of individuals. Collectivism runs on an underlying theme of force; forced conformity of people to adhere to social norms, forced possession of the means of production from the hands of privately controlled interests into the hands of “the people,” and forced (not to mention heavy) taxation of the people to fund elaborate government schemes and agencies (look into the Soveit’s Feldman Model of forced savings and investment into heavy industry which led directly to the under-production of consumer goods such as bread, causing the starvation and desparity of a nation). Collectivism IS force, and it’s opposite, Individualism, IS free-choice. But in our world today, we do not accept the idea that individuals are rational, and make free, rational decisions for themselves. After all, what rational individual would argue against government Social Security? What rational individual wouldn’t buy healthcare? In America, we truly take freedom for granted, it has become this touchy, feel-good idea of “ain’t nobody tells me what to do! This is ‘Merica!” And it offends our delicate sensibilities, but what do we do when people, rationally and freely, choose to be under someone else’s direction? As Americans, we look at nations like Iran, Palestine, and Afghanistan and cannot fathom why people would choose to subject themselves to a leader’s rule the way they do.

My father-in-law and I have gotten into numerous arguments about this. If someone, willingly and freely chooses to live under someone else’s direction, isn’t that just government? Doesn’t that defeat the idea of anarchy? And the answer is no, simply because that choice was made freely! A favorite scenario we argue is a zombie apocalypse; there is a group of people, and one person inevitable takes charge. Isn’t that government? If that leadership was taken by force, and if individuals in the group are forced to stay and cannot leave, then yes, that is government. But anarchy is without rule, forceful coercive rule, not without order. There is always a natural order to the world, and some people are more adept to being leaders than followers, and vice-versa. But say the leader tells the group, “We should head North,” and two of the group say, “No, we should go West.” An argument ensues, and in the end, the group splits, the majority go North and two go West. Now that IS anarchy; rational individuals making decisions for their own self-interest. The one thing flawed about my father-in-laws example, is that in the case of a zombie apocalypse, people are incentivised, by their own self-interest, to stay together, as their probability of survival is higher in a group than individually in the face of the living dead. The idea of freely subjecting yourself to another’s direction as not being the same as forceful government rule is a subtle nuance that many won’t accept, but that is the difference. Anarchy is the absolute pinnacle of free-choice, and in a world of increasing collectivisation, where individuals are not free to choose, anarchy is an impossibility.

I will argue that this trend towards Collectivism will destroy us, that as we allow more decisions to be taken out of our hands and placed into the hands of “benevolent and omniscient” rulers, that will will spell our own demise. But I will not argue that the size of our nations is a detriment to the world. Larger nations allows for greater opportunities for division of labor, for entrepreneurial spirits and minds to find eachother and create, for free trade to raise its participants standards of living, and to unleash to productive forces that can be achieved only through a free-market mechanism. If giving that up that is the price of anarchy, then anarchy be damned.

I guess, to end, I will restate that I am not an anarchist. In the 18th and 19th centuries I’d be called a Classical Liberal; today I’m called a free-market Libertarian, who dabbles in Anarcho-Capitalism. I believe that the government has grown too large, and that many inefficiencies and inequalities in society can be solved by taking the government out of the free-market and industry. I believe the government should be in charge only of a standing military for national defense, for the esablishment of a court system, and for the regulation of a police body. For all other decisions, I truly believe and have faith in the rationality of the individual, in the free-market, and in the free-choice mechanism.