oposed Coasian solution as making invalid assumptions about the purely subjective notion of costs being measurable in monetary terms, and also of making unexamined and invalid value judgments (ie, ethical judgments). The Rothbardians 'solution is to recognize individuals' Lockean property rights, of which the Rothbardians maintain that Wertfreiheit (ie, value-free) economic analysis demonstrates that this arrangement necessarily maximizes social utility.
Proponents of free-market environmentalism use the example of the recent destruction of the once prosperous Grand Banks fishery off Newfoundland. Once one of the world's most abundant fisheries, it has been almost completely depleted of fish. Those primarily responsible were large "Factory-fishing" enterprises driven by the imperative to realize profits in a competitive global market. [3] It is contended that if the fishery had been owned by a single entity, the owner would have had an interest in keeping a renewable supply of fish to maintain profits over the long term. The owner would thus have charged high fees to fish in the area, sharply reducing how many fish were caught. The owner also would have closely enforced rules on not catching young fish. Instead commercial ships from around the world raced to get the fish out of the water before competitors could, including catching fish that had not yet reproduced.
Another example is in the 19th century early gold miners in California developed a trade in rights to draw from water courses based on the doctrine of prior appropriation. This was curtailed in 1902 by the Newlands Reclamation Act which introduced subsidies for irrigation projects. This had the effect of sending a signal to farmers that water was inexpensive and abundant, leading to uneconomic use of a scarce resource. Increasing difficulties in meeting demand for water in the western United States have been blamed on the continuing establishment of governmental control and a return to tradable property rights has been proposed.
According to Richard L. Stroup, markets in the environmental field, in order to function well, require "3-D" property rights to each important resource - ie, rights that are clearly defined, easily defended against invasion, and divestible (transferable) by owners on terms agreeable to buyer and seller. The first two rights prevent property owners from being forced to accept pollution, and the third right provides an incentive for owners to be good stewards. [4]
Many free-market environmentalists argue that the problem of regulatory capture whereby large companies play a large role in setting regulations has created a system where things are far too biased in favor of large companies. For instance, in the United States lands that could be more valuably used for tourism are often used for resource extraction because the many disorganized tourists cannot have the same impact on government as the few org...
