The rights of man and the rape of his environment:

a blueprint for a peaceful revolution

EDWARD J. MISHAN

Dr Mishan is reader in economics at the London School of Economics. His new and unorthodox book 'The Costs of Economic Growth,' reviewed in the SPECTATOR on 30 June, is attracting increasing attention among politi- cians and economists. In this article he develops the book's two principal proposals for a change in public policy.

Stansted is fast becoming a cause célebre- and deservedly, for it brings home to thinking people just how unprotected they are from any number of disastrous repercussions on their lives that may follow in the wake of material progress. There may have been a time when the Englishman's home was his castle. If so, it was before the middle of the twentieth cen- tury. About that time he began to discover that he could be bombarded with noise from aircraft overhead, from passing traffic, and from his neighbour's motorised garden machinery, without any practical means of redress.

Of course, it happens innocently enough. Machines that are employed to produce ser- vices for some simultaneously produce 'dis- services' for others. The recipients of the services acknowledge their value by a willing- ness to pay for these services. Symmetrical reasoning would require that the recipients of the disservices should receive payment for ab- sorbing these disservices. Things have not worked out this way, however. It is true that such nice calculations would not matter much in a society with only rudimentary technology and an abundance of land relative to its popu- lation: but this is not the condition of Britain today. With the postwar growth of technology and population these disservices or 'spillover effects'—the noise, smell, smoke pollution or other noxious by-products of the operation of industry or their products—have become too conspicuous to be ignored any longer by civilised countries.

They range from the strangulation by traffic of cities, resorts and once-quiet hamlets to the extermination of wild life by the indis- criminate use of pesticides; from ubiquitous jets to the spreading plague of beach transis- tors; from the destruction by mass tourism of the world's dwindling resources of natural beauty to the neighbour's petrol lawn-mower. Indeed, together these spillover effects repre- sent the most outstanding example of postwar growth yet recorded.

What, then, can be done to check this accelerating trend and, perhaps, to reverse it? Surprising as it may seem, there are some pro- ponents of laissez-faire who still believe that, given enough time and, presumably, for- bearance, it will all sort itself out. Their argu- ment, in effect, takes its rationale from that of the protection racket in areas where the police are either corrupt or inefficient. By paying some agreed bribe to the gang the potential victim is left unmolested—an arrangement that has the virtue of leav- ing both him and the gang better off than if, instead, he refused to pay. Likewise with spillover effects. I might well be able to bribe jny neighbour not to use his diesel saw on a Sunday afternoon. Similarly, the owner of a plant that uses the waters of a stream to pro- duce soft drinks might attempt to bribe the owners of a soap-producing plant that would otherwise pour its effluent into the stream.

Admittedly, the damage inflicted on others in these spillover cases is incidental rather than deliberate. Yet it is no less inequitable that in such cases the victims should be made either to suffer the full extent of the damage or to limit the damage by paying some appropriate sum. Worse still, the method provides no in- centive for those responsible for spillover effects to curb them. Quite the contrary: since the bribe that can be extracted depends upon the extent of the nuisance, there is everything to be gained from, surreptitiously, increasing it.

But the objection to this notional mechan- ism goes further. In the simple cases above it was at least practicable for the victim to buy himself some relief from the nuisance. It becomes less practicable as the number of vic- tims increases. It may well be that the most each family in the Stansted area would pay to induce the airport authorities to site the airport elsewhere would amount to a sum more than enough to compensate both the air- port authorities for the anticipated losses in choosing the next best site and the anticipated profits of estate developers and others. Indeed, the total sum may be larger than any con- ceivable profit the airport authorities can hope to earn. But under existing institutions the initiative for making such an arrangement is not available and, even if it were, the costs of estimating and securing a fair contribution from each of some several score thousand families would be prohibitive. In the event such poten- tial improvements do not take place. ,

Must we, then, seek a wholly political solu- tion? A report just presented to the us Department of Health, Education and Welfare, listing an encyclopaedic range of environ- mental ills, proposes, characteristically, a vast programme of federal expenditure to combat them and the appointment of a council of ecological advisers to shape a national policy on environmental management. In view of the prodigious expenditures envisaged and the pos- sible extension of bureaucratic controls implied, I suggest that we might explore two alterna- tive, though related, approaches to the problem: (1) the enactment of 'amenity rights,' and (2) the extension to environmental areas of the concept of separate facilities.

The competitive market has long been re- garded by economists as an inexpensive mechanism for allocating goods and services with tolerable efficiency. It may seem to have failed badly when the production of goods began to be accompanied by the production of 'bads' or noxious spillover effects. But the failure is not to be attributed so much to the mechanism of the market as to the legal frame- work within which it operates. In particular, we must remind ourselves that what constitutes a cost to commercial enterprise depends upon the law. If the law recognised slavery the costs of labour would be no greater than the costs involved in capturing a man and maintaining him nereafter at subsistence level. How, then, can the law be altered so as to remove existing inequities and, at the same time, to recognise the simple economic fact that privacy and quiet and clean air are scarce goods—far scarcer than they were before the war—and sure to become scarcer in the fore- seeable future? Clearly, if the world were so fashioned that clean air and quiet took on a physically identifiable form, and one that allowed it to be transferred as between people, we should be able to observe whether a man's share of the stuff had been appropriated or damaged, and we should be able to institute proceedings accordingly. The fact that the universe has not been very accommodating in this respect does not in the least detract from the principle of justice involved or from the principle of economy regarding the treatment of scarce goods. One has but to imagine a country in which men were invested by law with property rights in privacy, quiet and clean air—simple things, but for many indis- pensable to the enjoyment of life—to recog- nise that the extent of the compensatory payments that would perforce accompany the operation of industries, motorised traffic and airlines would constrain many of them to close down or to operate at levels far below those which would prevail in the absence of such a law, at least until industry and transport dis- covered economical ways of controlling their own noxious by-products.

The consequence of recognising such rights in one form or another, let us call them amenity rights, would be far-reaching. Such innovations as the invisible electronic bugging devices currently popular in the us among people eager to 'peep in' on other people's conversations could be legally prohibited in recognition of such rights. The case against their use would rest simply on the fact that the users of such devices would be unable to compensate the victims, including all the poten- tial victims, for living in a state of unease or anxiety. So humble an invention as the petrol- powered lawn-mower, and other petrol-driven garden implements, would come also into con- flict with such rights. The din .produced by any one man is invariably heard by dozens of families—who, of course, may be enthusiastic gardeners, also: if they are all satisfied with the current situation or could come to agree- ment with one another, well and good. But once amenity rights were legally enacted, at least no man could be forced against his will to absorb these noxious by-products of the activity of others.

Of course, compensation that would satisfy the victim (always assuming he tells the truth) may exceed what the offender could pay. In the circumstances, the enthusiast would have to make do with a hand lawn-mower until the manufacturer discovered means of effectively silencing the din. The manufacturer would, of course, have every incentive to do so, for under such legislation the degree of noise- elimination would be regarded as a factor in the measurement of technical efficiency. The commercial prospects of the product would then .vary with the degree of noise-elimination achieved.

Admittedly, there are difficulties whenever actual compensation payments have to be made, say, to thousands of families disturbed by air- craft noise. Yet once the principle of amenity rights is-recognised in law, a rough estimate of the magnitude of compensation payments neces- sary to maintain the welfare of the number of families affected would be entered as a matter of course into the social cost calculus. And unless these compensatory payments could also be somehow covered by the pro- ceeds of the air service there would be no prima flack case for maintaining the air ser- vice. If, on the other hand, compensatory payments could be made (and their payment costs the company less than any technical device that would effectively eliminate the noise) some method of compensation must be devised.

It is true that the courts, from time to time, have enunciated the doctrine that in the ordinary pursuit of industry a reasonable amount of inconvenience must be borne with. The recognition of amenity rights, however, does no more than impose an economic inter- pretation on the word 'reasonable,' and there- fore also on the word 'unreasonable,' by transferring the cost of the inconvenience on to the shoulders of those who cause it. If by actually compensating the victims—or by pay- ing to eliminate the disamenity by the cheapest technical method available—an existing service cannot be continued (because the market is unwilling to pay the increased cost) then the inconvenience that is currently being borne with is to be deemed unreasonable. And since those who cause the inconvenience are now compelled to shoulder the increased costs there should be no trouble in convincing them that the inconvenience is unreasonable nor, therefore, in withdrawing the service in question.

A law recognising this principle would have drastic effects on industry and commerce, which for too long have neglected the damage inflicted on society at large in producing their wares. For many decades now firms have, without giving it a thought, polluted the air we breathe, poisoned lakes and rivers with their effluence, and produced gadgets that have destroyed the quiet of millions of families, gadgets that range from motorised lawn-mowers and motor- cycles to transistors and private planes. What is being proposed, therefore, may be regarded as an alteration of the legal framework within which private firms operate in order to direct their enterprise towards ends that accord more closely with the interests of society. More speci- fically, it would provide industry with the incentive necessary to undertake prolonged re- search into methods of removing the potential amenity-destroying features of so many of to- day's existing products and services.

The social advantage of enacting legislation embodying amenity rights is further reinforced by a consideration of the regressive nature of many of these external diseconomies. The rich have legal protection of their property and have less need, at present, of protection from the disamenity created by others. The richer a man is, the wider his choice of neighbour- hood. If the area he happened to choose appears to be sinking in the scale of amenity, he can move, if at some inconvenience, to a quieter area. He can select a suitable town house, secluded perhaps, or made soundproof throughout, and spend his leisure in the country or abroad at times of his own choos- ing. Per contra, the poorer the family the less 'opportunity there is for moving from its present locality. To all intents it is stuck in the area and must put up with whatever disamenity is inflicted upon it.

And, generalising from the experience of the last ten years or so, one may depend upon it that it will be the neighbourhoods of the ivvorking and lower middle classes that will suffer most from the increased construction of fly-overs and fly-unders and road-widening schemes intended to speed up the accumulating road traffic that all but poisons the air. Thus the recognition of amenity rights has favour- able distributive effects also. It would promote not only a rise in the standards of environment generally: it would raise them most for the lower-income groups that have suffered more than any other group from unchecked 'de- velopment' and the growth of motorised traffic since the war.

Although legal recognition of compensation for damages suffered is unassailable both on grounds of improved allocation and on social equity, there will be in many cases practical difficulties of estimating and implementing compensatory payments, difficulties that multiply with the number of people affected and the variety of their responses. However, and this brings me to my second proposal, there is an alternative to reaching mutually satisfying arrangements within a given area. It is that of providing separate areas for groups having conflicting interests. Even if it then transpired, which I doubt, that people who place a high value on clean air, quiet and a pleasant environment are in a minority in this country, the principle of amenity rights still warrants the creation of separate areas.

Any government at all concerned with the welfare of its citizens could not excuse itself from making a start and planning for large residential areas through which no motorised traffic is permitted to pass and over which no aircraft is permitted to fly, or from prohibiting motor-boats on the lakes in certain districts, and traffic in general from such lake districts. Municipalities should be able to make a start by providing stretches of beach free from transistor noise (while, of course, freely allow- ing it along other parts of the beach), by keeping motor traffic away from certain shop- ping areas, from narrow roads, from cathedral precincts and other places of beauty or his- toric interest that can be enjoyed only in a quiet traffic-free setting.

No enthusiastic 'pace-maker' need feel him- self deprived if some areas in Britain are set aside for the quiet-loving minority—if it is a minority. Nor should all such areas display the same features; there is room enough, for a wide range of social experiment in living together. One, need have no objection whatso- ever to developing areas specifically for. the enthusiastic motor-cyclists, for the 'young in

heart' and for the would-be young, over which they could ride around for hours without un- avoidably, annoying those whose tastes run to other things.

At the other extreme, decent residential areas could be set aside for those 'backward-looking' people who would be glad to abolish the use of all engines outside the home and for eccen- trics who would prefer to dwell in areas ad- mitting only horses and horse-drawn vehicles as means of transport. If they are prepared to pay for it—and there is no reason why any such arrangement should cost more to operate, rather than less, compared with exist- ing modern arrangements—there is no advan- tage to the rest of the country in depriving them of their wants. In between, there should be a wide variety, some areas having no more than large pedestrian precincts, or traffic-free shopping islands, to distinguish them, others permitting only public transport or electrically- powered transport on their roads, others yet prohibiting all types of motorised vehicles, or prohibiting them between certain hours, and many of, them refusing airline compensation in order to remain free from aerial distur- bance.

With almost all the convenient and desirable areas close to the metropolis and many other desirable towns and villages already shaped for a motorised society, heavy capital costs may have to be incurred in 'reconverting' suitable places to amenity areas. In conformity with the principles laid down, however, if the value to potential inhabitants of any such amenity area—estimated as the minimum sum required to compensate them in forgoing their legal rights to amenity—exceeds the capital costs of converting the area, social welfare and equity is advanced in creating such an area.

Business economists have ever been glib in equating economic growth with an expansion of the range of choices facing the individual; they have failed to observe that as the carpet of 'increased choice' is being unrolled before us by the foot, it is simultaneously being rolled up behind us by the yard. In all that contributes in trivial ways to his ultimate satisfaction, the things at which modern business excels—new models of cars and transistors, prepared food- stuffs and plastic objets d'art, electric boot brushes and an increasing range of push-button gadgets--man has ample choice. In all that directly destroys his enjoyment of life, he has none.

The environment about him can grow ugly. In the 'national interest' his ears may be assaulted by supersonic bangs, and in his stroll through the streets smoke and foul gases may be exhaled over his person. He may live in a locality in which he will never enjoy a night's rest at home without planes shrieking overhead. Whether he is indifferent to such cir- cumstances, whether he suffers them stoically or in impotent fury, there is under the present dispensation practically nothing he can do about them.

In sum, then, an extension of choice in respect of environment is the one really sig- nificant contribution to social welfare that is immediately feasible. As suggested. however, it is not likely to be brought about by market forces wprking within the given legal frame- work., Legal recognition of amenity rights, on the other hand, would touch off govern- ment, and private, initiative in creating a wide diversity of residential environment offering to all men those vital choices that have too long been denied them.