Capitalism is the most environmentally friendly economic system.

Myth: Capitalism is the most environmentally friendly economic system.

Fact: Non-industrial and regulated industrial systems are the most environmentally friendly.

Summary

This statement is more false than conservatives realize; non-industrialized countries actually have the cleanest environments. But among industrialized societies, Europe and Japan are cleaner than the U.S., which is cleaner than the former Soviet Union. Translated into systems, this means that well-regulated capitalist economies are cleaner than less regulated capitalist economies, which are cleaner than completely unregulated dictatorships. These last are considered unregulated because the officials in charge of production (the Soviet planners) were also their own regulators. Of course, the Soviet planners did not regulate themselves in their drive to catch up to Western levels of productivity, any more than Western polluters regulate themselves. A correlation thus emerges: the greater the regulation, the less the pollution.

Argument

The claim that capitalism is the most environmentally friendly economic system is false in more ways than one. The cleanest societies in the world are actually the non-industrial ones -- most of South America and Africa, for example. Where industry rises, pollution fills the air, water and land.

This would suggest that arguing over which type of industrial society is cleaner is much like rearranging the deck chairs on the Titanic. However, there is one hopeful development, and that is that most Western industrial societies are going through a period of deindustrialization. The percentage of workers employed in manufacturing jobs in capitalist countries has been falling for decades:

Employment in Manufacturing as a Percentage of Non-Agricultural Employment (1) 

Country          1970  1991
----------------------------
United States    27%   17
Japan            33    27
Germany          40    33

The cause for this decline is twofold: consumers are demanding a higher percentage of services over goods, and production efficiency is continually improving. Production efficiency happened first in farming, where improvements in technology boosted output so much that the number of American farmers could decline 76 percent between 1941 and 1991, yet produce more food than ever before. (2) The same thing is happening to the rest of industry. Robot assembly lines have greatly boosted productive efficiency. Likewise, the Internet allows a person to send messages instantly and electronically instead of requiring a mailman to haul wood-based products in a gas-guzzling truck. But this efficiency is a double-edged sword; we can use it to decrease our workload and lessen the damage to the environment, or we can use it to boost productivity to still higher levels that accelerate environmental destruction. Which option society takes will demonstrate how enlightened it is.

But as long as society remains industrialized to some degree, what type of economic system is friendliest? Conservatives point to the environmental devastation of the former Soviet Union as proof that socialism isn't it. And it is true, the former Soviet Union is by far more environmentally ravaged than the West. This goes well beyond Chernobyl, which will leave much of the Ukraine dangerous to inhabit for thousands of years. The Soviets drained two-thirds of the Aral Sea (one of the largest seas in the world) for irrigation, with disastrous results, including massive salt storms whenever the wind rises. In the highly centralized steel production city of Magnitogorsk, air pollution is so deadly that it is difficult to give birth to a live baby. No less than half of all recruits for military service are physically unfit for duty. The life expectancy of the average Russian male is 13 years lower than his American counterpart, and rapidly dropping. The once-fabled forests of Eastern Europe are dead, stripped of leaves and rotting away. How these nations are going to deal with their widespread environmental disasters is a mystery. Fortunately, the people themselves are aware of these problems, and there is a strong green movement in the former communist states.

Conservatives claim that socialism was so destructive to the environment because no one owned private property. "When no one owns private property, there is no incentive to keep it clean and pure because no one has a stake in keeping up its value," writes Rush Limbaugh. (3) According to this logic, however, America's national and public parks should be more polluted than private lands -- which they are not, because a large majority of the population reveres and protects our public parks. Furthermore, the American people have hired national park rangers to serve as custodians for these lands -- which refutes this conservative argument outright.

A more accurate reason why Soviet socialism was so environmentally destructive was because the regulator and the producer were the same entity: the Soviet government. Moscow itself was in control of production, and it regulated itself no better than any factory dumping pollution regulates itself. That is, there was no higher authority telling the Soviet planners that they couldn't pollute in their efforts to boost production. Contrary to what conservatives claim, the Soviet economy wasn't over-regulated; it wasn't regulated at all.

Needless to say, the top goal of the Soviet planners was to catch up to the West, and they thought they could sacrifice a part of their vast and seemingly infinite environment to obtain this goal. Also, the natural environment in Russia is a harsh one, filled with long, bitter winters and unproductive farmland. Russians have had a long tradition of viewing nature as the "enemy," one to be conquered by brute force just to be able to survive. Communist leaders from Lenin to Chernenko encouraged workers to vanquish nature as a superior method of survival.

In contrast to the unregulated Soviet economy, there are varying degrees of regulation in Western nations. By far, Europe and Japan are more heavily regulated than the U.S. And Europe and Japan are also cleaner than the U.S. (The statistics supporting these two observations will follow below.) What all these international examples show is that there is an elegant correlation between the amount of environmental regulation and the environmental health of industrialized nations.

Conservatives may find this conclusion outrageous, but even a domestic review of American history proves that government, not the free market, has been at the forefront of environmental protection. Every pro-environmental policy that the free market has ever adopted was forced upon it by government. The Clean Air Act, the Clean Water Act, the Superfund, as well as the bans on asbestos, leaded gasoline, DDT, strip mining, aerial nuclear testing, and untreated waste dumping were all acts of congress, not business. Big business has never voluntarily sought to lower its profit margins to protect the environment. Every one of these laws had to be passed over the vehement opposition of business leaders and conservatives in congress.

The difficulty of arguing that "unfettered capitalism is green" can be seen in the following quote by Rush Limbaugh. Here, Rush describes industry's reaction to the Cuyahoga River, the notorious river that was so polluted it caught fire three times:

I'm sure some regulation was used,

Rush distorts the facts. The image of a river so polluted that it caught on fire was a vivid one in the press, and the public became outraged by it. The government quickly imposed some of the strictest environmental regulations in the nation on the industries responsible. The reason why the river was so polluted in the first place was because big business had been allowed to pursue profit no matter what the damage it caused to the community. It was only after it was regulated that the river became clean. Rush lamely adds that it was "American know-how" that cleaned up the river. If so, then why did business not apply that know-how before society compelled them? The answer is that it hurt the bottom line.

The following statistics show that Europe and Japan are environmentally cleaner than the U.S.

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NOTE: Substantial portions of the following were reproduced with permission from WHERE WE STAND, by Michael Wolff, Peter Rutten, Albert Bayers III, and the World Rank Research Team (New York: Bantam Books, 1992). Copyright (c) 1992 by Michael Wolff & Company, Inc. All rights reserved. No part of the contents of WHERE WE STAND may be reproduced or transmitted in any form or by any means without the written permission of the copyright owner. Requests for permission should be sent to Michael Wolff & Company, Inc., 520 Madison Avenue, 11th Floor, New York, NY 10022, phone 212-308-8100, fax 212-308-7425, or email to mwolff@ypn.com.
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Government spending on pollution control (percent of GDP):

Japan          1.17%
Netherlands    0.95
Canada         0.89
Germany        0.78
Sweden         0.66
United Kingdom 0.62
United States  0.60
Norway         0.54
Finland        0.52

Percent of government R&D spent on the environment:

Germany         3.4%
Canada          2.2
Italy           1.9
United Kingdom  1.3
France          0.7
United States   0.5
Japan           0.4

Travel on public transportation as a percent of all travel:

Japan           18%
Finland         16
Denmark         15
Portugal        14
Germany         11
Norway           9
United Kingdom   8
Netherlands      8
United States    1

Annual air miles per person:

United States   1,698
Canada          1,105
Netherlands     1,014
United Kingdom    902
Norway            829
Sweden            575
Finland           506
Denmark           476
Japan             425
Germany           344

Average price of a gallon of gas:

Sweden         $4.85
Denmark         4.46
United Kingdom  3.56
Germany         3.05
Netherlands     3.02
Japan           3.01
Canada          1.40
United States   1.07

Share of the world's energy use:

United States  24.8%
OECD/Europe    17.7
Japan          5.1

Energy Units of oil burned annually:

United States       791.5
European Community  501.4
Japan               234.3
Germany             108.5
United Kingdom       81.3
Canada               80.4
Netherlands          24.1
Sweden               16.3
Finland              11.1
Norway                9.3
Denmark               9.0

Percent of all greenhouse gases emitted annually: (5) 

United States       21%
Former USSR         14 
European Community  14 
China                7 
Brazil               4 
India                4 
Rest of the world   36 

Carbon dioxide released per person per year:

United States   5.8 tons
Canada          4.8
Germany         3.2
United Kingdom  2.9
Japan           2.2
OECD Europe     1.8

Total Carbon Monoxide emitted annually:

United States   60,900 tons
Canada          10,100
Germany          8,926
France           6,198
United Kingdom   5,264
Sweden           1,754
Netherlands      1,229
Norway             649
Switzerland        621

Total chlorofluorocarbons emitted annually:

United States   332 million tons
Japan            95
Germany          71
United Kingdom   67
Canada           34
Netherlands      17
Switzerland      10
Denmark           6
Finland           6
Sweden            4
Norway            1

Major oil spills (1976-89):

United States   16
France           6
United Kingdom   5
Japan            4
Canada           2
Sweden           2
Finland          1
Germany          1

Forests cleared (thousands of cubic yards):

United States   808,421
Canada          379,500
France           95,964
Sweden           84,612
Finland          72,864
Japan            57,272
Norway           14,810
United Kingdom    6,600

Acid rain (the lower the pH number, the worse the acidity):

Japan           3.9 pH
Sweden          4.1
United States   4.3
Canada          4.3
Norway          4.4
Denmark         4.5
Finland         4.5
Netherlands     4.9
United Kingdom  5.1

Energy Units of coal burned annually:

United States       458.0
European Community  299.0
Germany              73.9
Japan                73.2
United Kingdom       64.0
Canada               27.6
Netherlands           8.1
Denmark               5.5
Finland               4.1
Sweden                2.5
Norway                1.0

Debris inhaled per person per year:

United States   81 pounds
Finland         44
Sweden          44
Europe          26
Netherlands     24
Germany         24
Denmark         20
Norway          15
United Kingdom  11
Japan            2

Waste per person per year:

United States  1,637 pounds
Canada         1,397
Netherlands      988
Denmark          931
Finland          898
Switzerland      843
United Kingdom   781
Japan            757
Germany          700
Sweden           697
France           598
Italy            579

Share of world's industrial waste:

United States   31.6%
OECD Europe     11.3
Eastern Europe  21.6
Japan           13.0

Percent of all glass recycled:

Netherlands     50.3%
Japan           49.6
Germany         41.2
Sweden          40.0
Denmark         31.0
Finland         30.0
United Kingdom  27.0
Norway          21.1
United States   20.0

Percent of all paper and cardboard recycled:

Netherlands     62.0%
Japan           54.4
Germany         37.0
Denmark         32.0
United Kingdom  13.0
United States    8.4

Return to Overview

Endnotes:

1. Translated from graph from Paul Krugman, Peddling Prosperity, (New York: W.W. Norton & Company, 1994), p. 263.

2. Where We Stand, p. 157

3. Rush Limbaugh, The Way Things Ought To Be (New York: Simon & Schuster, 1993), pp. 157-8.

4. Limbaugh, p. 157.

5. NASA, IPCC Scientific Assessment of Climate Change, 1992.