One of the reasons pollution has been able to become such a huge problem is that those creating the pollution are usually not the ones suffering its consequences. Let’s take the classical fictional example of a paper factory using a nearby river in which to dump its waste-material. The river-current drags these materials away from the paper factory and to a nearby town that uses the river water for drinking purposes. The paper factory might use the same river for drinking water for its employees or production processes, but it will use the water a bit higher up the river, at a point where the water is still clean. So – even though the factory is producing the waste material, dumping it in the river and so contaminating the quality of the water – it is not the factory itself/those working at the factory who feel and experience the consequences of polluting the river to get rid of its waste. Since the factory doesn’t feel the harm in what it’s doing, it won’t change what it’s doing, unless there are complaints from the villagers who DO experience the consequences of the river pollution and take action so that solutions can be implemented.
Now – a study was done by James K. Boyce, professor of economics at the University of Massachusetts, where he investigated the ‘distribution’ of air pollution. Most people have heard about distribution of income and wealth and how unequal it is. But what about air pollution – is everyone suffering to the same extent or are certain groups/categories of people more exposed – and why?
In an interview with the professor the following was discussed:
LP: Do patterns of inequality differ across the country? How can a person of color or a poor person avoid air pollution?
JKB: Avoiding industrial air pollution is difficult, particularly if you’re poor or a member of a racial or ethnic minority. That’s partly because of housing prices. It’s partly because of discrimination in housing and mortgage markets — the phenomenon of red-lining. And it’s also partly because of the tendency for firms to site polluting facilities in relatively low-income and relatively high-minority communities because they expect less political pushback.
Hmmm, that last statement is quite interesting, isn’t it? In the example of our paper factory we were giving the factory ‘the benefit of the doubt’ in saying that – they probably didn’t realize what they were doing within polluting the water of the river, because they weren’t experiencing the consequences of the polluted water. But this statement clearly shows that – polluting firms are not only aware that they are polluting, they are aware that it has negative consequences for others – and yet, so long as they think they can ‘get away with it’, they’ll still do it. And when can they get away with it? When those experiencing the negative outflows are unlikely to speak up or take action to hold the firm accountable.
Or maybe it doesn’t mean that at all. Perhaps – let us entertain this notion for a moment – perhaps people of color or poor people are less likely to initiate political push back because they just don’t mind the air pollution. Maybe they are the enlightened ones who realize that air pollution is really not a big deal and therefore simply don’t want to make a fuss when it isn’t necessary.
But then you get to the following part of the interview:
LP: What are some of the most concerning economic effects of industrial air pollution on communities?
JKB: Air pollution has adverse effects on people’s health, and that means that they have to spend more on healthcare and they miss more days of work, either because they themselves are too ill to go to work or because their kids are sick and they have to stay home and take care of them. It also has adverse effects on property values, which vary with the levels of air pollution in the community.
On top of those outcome effects, it also impacts equality of opportunity, particularly for children. Because communities that are heavily burdened with air pollution tend to have higher incidence and greater severity of childhood asthma, the kids miss more days of school, and partly because they’re missing school and perhaps partly because of the neurological impacts of air pollution on their young and developing cognitive function, there is an adverse effect on school performance.
If you believe, as I think most Americans believe, that every kid deserves an equal chance, that equality of opportunity for children is dear to our society for reasons of both equity and efficiency, then the impacts of disproportionate pollution burdens on the children in some communities – the fact that the playing field is tilted against them through no fault of their own – is a troubling feature of our environmental landscape.
That settles it then – air pollution is definitely a problem that impacts the lives of those who are most exposed to it in a harmful way. So, it’s highly unlikely that they don’t mind – it must be that there is a problem in their ability to voice themselves and push for solutions that would improve their standard of living. And that makes total sense. As we have argued before – political participation is currently a luxury that can only be afforded by those who have the money and the time to firstly educate themselves on what procedures are available to them to organize themselves, formulate complaints and propose solutions – and secondly, walk these procedures and taking action.
With the implementation of a Living Income Guaranteed, companies would no longer have the ability to get away with excessive air pollution in low-income or minority community areas. No matter how much one currently struggles to get by income-wise and no matter if one belongs to a ‘minority community’ – each one’s economic situation would be secured and therefore, each one’s political influence is guaranteed as well. Herein, we could make an end to the cycle of impairing opportunities of those who already have a harder time to make the best of the opportunities they do have. Because once one is caught up in the struggle to survive, one has no bargaining power – one becomes the equivalent of a ‘slave’ within a system where one’s long term benefits are sacrificed for the short term goals of having enough money to put food on the table and pay the bills. And this is known by firms who release excessive amounts of pollutants into the environment for which they do not want to take responsibility – and so they will callously ensure that the consequences they create are carried mostly by those who don’t have the luxury to put a stop to it.
So, is a Living Income Guaranteed ‘bad news’ for firms? No – not at all. The philosophy of the free market is based on the premise that off-setting individual interests can create the best outcome for everyone. Of course, interests that are not voiced have no power to off-set anything at all – which is precisely what we’re witnessing in the world today. A Living Income Guaranteed would ensure that all interests are considered and play a role within the creation of an optimal outcome. Air pollution is a great example herein, because, what is air pollution? It is a way in which the natural equilibrium is disturbed, which, as we are all too aware of, is having consequences on the larger natural systems that the air forms a part of. In essence, it is a form of poisoning the planet, the planet we all share.
We can try for a while to keep the effects of pollution isolated so that most, or at least the more affluent, in society don’t have to worry about it. But the planet is an interconnected system and eventually – as we’re noticing with global warming – the effects will reach everyone. So – implementing a Living Income Guaranteed is not only a matter of empowering those without means or voice to make a decent living for themselves in this world – it is a vital step to ensure that we create optimal outcomes for everyone, that cannot be achieved if not everyone is part of the discussion.
This summer I had the mixed pleasure of reading a course in Microeconomics and International trade. In microeconomics the primary focus of the researchers is to establish ‘What is the market really doing and why?’ – and this is attempted to be done utilizing mathematical formulas; primarily utilizing the famous graph where two lines cross each-other, the one line sloping downwards (demand) and the other sloping upwards (supply) – and where they meet each other = that’s apparently the optimal price for the product and the optimal quantity of that product in that given market.
What first struck me as being fascinating about these theories was that they seldom predicted how the market would behave in reality, and neither could they be verified with empirical evidence – and most of the time the authors of the my books where busy trying to find reasons and various viewpoints as to why these theories wasn’t working “as they should” – and how they probably did work but it was just that the inventors missed to take into consideration some important factors and variables.
Though, what was the most fascinating about this entire area of research, was how there was this complete worship to the idea that lower prices = higher consumer satisfaction; and that apparently for a market to be functional, what is required is that we produce as many products as possible, to the lowest prices possible, because then the consumers are able to buy as much as possible, and then we’re apparently okay, happy, and have a fruitful existence here on earth.
Obviously, when I looked at these ideas, I silently chuckled – because the logical flaw of this assumption is glaringly simple = the producers are the consumers! YES – that’s the secret of economy and the reason why we’ve got so many unemployed in this day and age is because we’ve failed to understand that when a product is cheaper, someone at the other end gets less money, which in turns means that a (employee) consumer gets less money, which in turns means that the producer gets less customers = and it all ends up in such a way that most lose but a few that manage to reap the monopoly profits of those very low-priced products – because they’ve priced out everyone else.
It’s clear that we have to develop a new way of looking at economics, and that mathematics and statistics isn’t the way to go – no – we actually require to look at the actuality of what is going on. For example, poverty, what is the actuality of poverty? Why does poverty exist to begin with? It’s not a matter of mathematics, rather it’s a matter of seeing what is behind everything in this world – and that is MONEY – money that in itself is a completely innocent creation meant to be but a way of distributing goods and services to where they are required and wanted the most; but in our current system – money has become a point of control – where those that are already rich and on top of things with all possible means make sure the keep those stricken by poverty in place – else we wouldn’t anymore have a functional slave labor force that can produce all of our various gadgets and other mechanics of entertainment.
Thus, what we must ask ourselves, and economists more importantly, is why have we never used our knowledge to produce a sustainable system where all of us are able to create a life that is dignified, cool and enjoyable? What is required for us to do that? MONEY – and what do we need to bring through such money into this world? Resources – so what is then the solution – the real economic master plan as to how to create a world that would be sustainable and practical for all its inhabitants? To agree that we share the resources – at least the basic and most essential resources – those that we MUST HAVE in order to live.
Thus, I stand behind the Living Income Guaranteed – which is a functional, effective and sustainable way of creating a new world for all people where money will be shared – and for those economists that want to make a difference – I suggest that you investigate this concept and bring your knowledge to the table and help to create something from which we can all benefit!
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