The Social Cost of Capitalism
By Paul Craig Roberts
August 12, 2015 "Information
Clearing House" -
Few, if any, corporations absorb the full cost
of their operations. Corporations shove many of their costs onto the
environment, the public sector, and distant third parties. For
example, currently 3 million gallons of toxic waste water from a
Colorado mine has escaped and is working its way down two rivers
into Utah and Lake Powell. At least seven city water systems
dependent on the rivers have been shut down. The waste was left by
private enterprise, and the waste was accidentally released by the
Environmental Protection Agency, which might be true or might be a
coverup for the mine. If the Lake Powell reservoir ends up polluted,
it is likely that the cost of the mine imposed on third parties
exceeds the total value of the mine’s output over its entire life.
Economists call these costs “external costs” or
“social costs.” The mine made its profits by creating pollutants,
the cost of which is born by those who had no share in the profits.
As this is the way regulated capitalism works, you
can imagine how bad unregulated capitalism would be. Just think
about the unregulated financial system, the consequences we are
still suffering with more to come.
Despite massive evidence to the contrary,
libertarians hold tight to their romantic concept of capitalism,
which, freed from government interference, serves the consumer with
the best products at the lowest prices.
Progressives have their own counterpart to the
libertarians’ romanticism. Progressives regard government as the
white knight that protects the public from the greed of capitalists.
Everyone, and most certainly libertarians and
progressives, should read Jeffrey St. Clair’s book, Born Under A
Bad Sky (2008). St. Clair is an engaging writer, and his book
is rewarding on many levels. If you have never floated the Western
rivers or met the challenge of treacherous rapids or camped among
mosquitoes and rattlesnakes, you can experience these facets of life
vicariously with St. Clair, while simultaneously learning how
corruption in the Park Service, the Forest Service and the Bureau of
Land Management results in timber companies, mining companies, and
cattle ranchers making money by plundering national forests and
The public subsidies provided to miners, loggers,
and ranchers are as extravagant and as harmful to the public
interest as the subsidies that the Federal Reserve and Treasury
provide to the “banks too big to fail.”
Progressives and libertarians need to read St.
Clair’s accounts of how the Forest Service creates roads into
trackless forests in order to subsidize timber companies’ felling of
old growth forest and habitat destruction for endangered and rare
species. Our romanticists need to learn how less valuable lands are
traded for more valuable public lands in order to transfer wealth
from the public to private hands. They need to learn that allowing
ranchers to utilize public lands results in habitat destruction and
the destruction of stream banks and aquatic life. They need to
understand that the heads of the federal protective agencies
themselves are timber, mining, and ranching operatives who work for
private companies and not for the public. Americans of all
persuasions need to understand that just as senators and
representatives are bought and paid for by the military/security
complex, Wall Street, and the Israel Lobby, they are owned also by
mining, timber and ranching interests.
The public interest is nowhere in the picture.
The two largest reservoirs, Lake Mead and Lake
Powell, are at 39% and 52% of capacity. The massive lakes on which
the Western United States is dependent are drying up. And now Lake
Powell is faced with receiving 3 million gallons of waste water
containing arsenic, lead, copper, aluminum and cadmium. Wells in the
flood plains of the polluted rivers are also endangered.
The pollutants, which turned the rivers orange,
flowed down the Animas River from Silverton, Colorado through
Durango into the San Juan River in Farmington, New Mexico, a river
that flows into the Colorado River that feeds Lake Powell and Lake
All of this damage from one capitalist mine.
In November of last year, US Rep. Chris Stewart (R.Utah)
got his bill passed by the House. Stewart is a hit man for
capitalism. His bill “is designed to prevent qualified, independent
scientists from advising the Environmental Protection Agency (EPA).
They will be replaced with industry affiliated choices, who may or
may not have relevant scientific expertise, but whose paychecks
benefit from telling the EPA what their employers want to hear.”
Rep. Stewart says it is a matter of balancing
scientific facts with industry interests.
And there you have it.
Dr. Paul Craig Roberts was
Assistant Secretary of the Treasury for Economic Policy and
associate editor of the Wall Street Journal. He was columnist for
Business Week, Scripps Howard News Service, and Creators Syndicate.
He has had many university appointments. His internet columns have
attracted a worldwide following. Roberts' latest books are
The Failure of Laissez
Faire Capitalism and Economic Dissolution of the West
How America Was Lost.
Did The EPA Intentionally Poison Animas River
To Secure SuperFund Money?: A
week before The EPA disastrously leaked millions of gallons of toxic
waste into The Animas River in Colorado, this letter to the editor
was published in The Silverton Standard & The Miner local newspaper,
authored by a retired geologist detailing verbatim, how EPA would
foul the Animas River on purpose.