Part III, Chapter 1 - The Philosophy of a Civil Alternative

Concerning Natural Law and Ecosystem Management

The laws we have created to describe our behavior were as real before we spoke language as they have been since we gave them form. These include laws of competition, scarcity, substitution, and indifference: the laws of supply and demand.

We can't change any of that.

We have altered the planet and we can't change that either, for natural selection is an irreversible process. We can never remake it as if we were not here, nor should we. We have no choice but to operate in concert with our surroundings, the harmony of which will depend upon our behavior.

It is unnatural for us to force upon ourselves static control systems and then expect an evolving organism to flourish. Natural selection is a process antithetical to determinism.

Natural ecosystems are competitive. At any given point, some solutions are going to be more successful than others. The reason biodiversity is so important is that the conditions under which species compete are based upon selection under variable conditions. If the circumstances change, the strong may fail and the weak may suddenly prosper.

Natural selection is driven by chance, mutation, and experiment, with ruthless rejection of inferior trials. Such is a market. Products and services each have their niches, diverse solutions, mergers, dominant species, and bankruptcies. Markets can adapt to changes in technology or events. A free market trading uses of private property is a system better suited to manage the process of natural selection than is bureaucratic regulation.

Free-market solutions to environmental problems are, by nature, competitive. Diverse products and services continuously adapt to serve the needs of individual customers. If the ecological conditions change, a market can have a proven product in production requiring only expansion.

The keys to making markets work is personal integrity in a world of managed ignorance. Irresponsible and impulsive behavior costs us all as externalities to commerce.

Any person, individual, corporate, or political, can fail to be accountable. Irresponsibility is founded upon a failure of self-perception, the belief that anyone really can act alone. It is the failure to measure the costs we cause to others that we ultimately cost ourselves. It is a lack of faith in our ability to fix our mistakes. It is a creature endemic to structured hierarchy managed by punishment. Penance becomes a putting of the total cost upon an individual without escape. It is a way of consolidating and vetting the distributed price of unjustly distributed risk.

The Tragedy of the Commons results from the lack of an individual account of interdependence in free-market associations. Intellectuals such as Mr. Hardin have intoned that there is no market mechanism for managing that collective interest, as if we were all 18th century sheepherders. We gullibly accept the idea out of guilt associated with our propensity to abrogate responsibilities in particular instances. Such guilt clouds our ability to see the means to account for interdependent interests, capable of unitizing personal valuation in a collectively held asset. Though such a means exists, there is no just and efficient way for individual claims to be rationalized politically or legally. The popular belief, that we have no such free-market medium, is sold by the politically dominant, obsessed with the intent to gain greater personal control of resources using the police power of government. That popular story is a lie.

We already have a tradable unit of interdependent ownership: It is stock.

Police power is certainly a way to coerce immediate, visible, and remedial compliance, but it can be an incontinent reaction to "make it stop" without the consideration of how "it" was motivated. Coercion begets resistance, enforcement, and punishment that can be rightly regarded as a destructive waste of energy that all too frequently induces unintended consequences. Such compulsion is an externality to the cost of transactions, a result of compromises among struggles, more reflective of the respective interests of dominant combatants than the benefit to the object under contention. Boundary conditions set by legal settlement consequently become the focus of avoiding constraint. Regulations become webs of intentional ambiguity by which a punishing trap can be sprung. The obsession with power then renders motivational regulatory methods counterproductive to extending individual power through political control.

The key to fitting business solutions to our regulatory pathos is identifying and pricing externalities. The process of mitigating risks and healing existing damage offers the opportunity to measure those costs, and apply that knowledge to construct weighted contingencies.

There is a business for that too, capable of valuing risk concerning intangible assets: pooled risk management. Although the insurance industry has done a lousy job of risk management when it comes to natural disasters, this is largely because it is a heavily subsidized, regulated, and, therefore, protected business. It doesn't have to be that way.

Government regulation is structurally at odds with competitive principles, simply because non-uniform law enforcement is an invitation to corruption. Single solutions are mandated out of the idea that uniformity constitutes "fairness" even though uniform solutions among variable circumstances are not innately fair. When obvious consequences arise, monopoly bureaucracy pursues its own interests; abetting the very corruption that was to be avoided. Government has ignored its service to that paradox in blind infatuation with power. It has resolved to implement the insipid conclusion that justice must be delivered by coercive bureaucratic rulemaking and enforcement as if it was the only option. It isn't.

The Descriptive Nature of Natural Law

Regulatory systems give us complex rules with limited applicability to unique circumstances. Free-market systems start with simple laws and map themselves onto an infinite array options. Rules are not as applicable to the variety and behavior of natural systems as are Laws.

Laws of physics and chemistry operate by descriptive nature. No well-trained scientist thinks that Newton's law of the mutual attraction of bodies describes gravity perfectly. The laws of gravity are only approximations of gravity's behavior with well-defined limits beyond which errors become significant. Exclusive use of Newtonian mechanics to determine the behavior of particles in a nuclear reactor will induce unacceptable errors. In cases such as these, Newton's laws gave way to Einstein's.

Good law is not so much an admonishment or constraint, as it is a description of principle. Economic laws of supply and demand describe human behavior as regards free exchange of private property. When applying economic laws to real transactions, economists recognize that there are situations in which the supply/demand model produces significant errors. These involve costs, inherent to the production of goods that are not reflected in the sale price, defined as economic externalities. Negative externalities lead to excess demand for a good because its price understates the total cost of production.

A clever body politic could govern via systems by which the market has motive to discover and price those goods that mitigate or offset externalities. That process begins with identification of a population, whose documented behavior constitutes a paragon, free to operate within a market-based system of checks and balances. The public can invest in verification businesses that assist individual entities to do their best at accounting the behavior of natural process assets that offset or mitigate human impacts, having a financial stake in that success. It beats paying a technically unqualified District Attorney or unaccountable agency official to investigate a company hiding its worst to avoid punishment for violations of perhaps inappropriate rules.

Instead of a set of standards demanding precise adherence, laws should reflect articulated principles by which people weigh the myriad constituents of individual choices as apply to particular circumstance. A government so constituted would focus upon verifying that contracts are respected, and not so commonly intrude into conflicts over property as an interested party. It would protect validated information as intellectual property and provide a forum to assist economic persons to settle their disputes based upon established facts in the court of civil mediation. Rather than institutionalizing the will of a tyrannical majority, and settling every issue through judicial rulings involving bureaucratic advocacy, the body of individual interests can more effectively settle disputes within the confines of contracts. Legislation, as such, would be more carefully crafted, brief, and rare. They might have time to think about it more carefully.

Such a direction would engender respect for government rather than properly validate its inefficacy. In order to develop the benefits of successful interdependence, we must choose to apply our collective will through reinforcement of individual integrity and respect for unalienable individual rights. We can create a process defined by individual responsibility for the individual share of the whole as a view of the self, enlightened by the price of that share. It is more realistic than to expect an individual to adopt such consideration out of either religious altruism or civic compulsion.

Without structural respect for unalienable property rights, no free market system can function with the integrity, energy, and mutual respect required for successful expression of any interdependent social system. Allocating the benefits of interdependence by rationalizing individual valuation of and contribution to particular assets is the genius of individual stock ownership. It comes vastly closer to the collective ownership of the means of production than that of Marx' misanthropic nightmare.

What's Missing?

Ecosystems are adaptive, diverse, dynamic, and change irreversibly. They are subject to random events of enormous scope. They operate in an interdependently competitive manner. Species undergo random mutation, are capable of near monoculture, and are subject to ruthless extinction. Nature is an entirely objective judge of fitness, not to be underestimated or misused.

The civic environmental control system enjoys what is assumed to be a natural monopoly. Its powers are unchecked, irreversibly acquisitive, maladaptive, unaccountable, and indissoluble. Its motivational structure is to accrue, extend, and perpetuate problems rather than to complete a job and go onto something new. Concentrations of power inherently attract those who would control rather than produce, whether by corruption, nepotism, or manipulation. It has been thus, since the dawn of civilization. It is why the Constitution instituted limited government to guarantee individual rights.

Plants and animals compete for scarce resources in a manner similar to laws of supply, demand, and indifference. Business now applies many of these econometric principles by quantitative computer models in its effort to predict commodity market behavior. Manufacturers must have some idea what the demand for a product might be or they may incorrectly size capacity and lose either the high margins with early market share, or waste capital invested in a turkey. Investors must weigh risks associated with investment choices. They offset that risk by hiring insurers to pool that risk by understanding how to quantify and efficiently manage the capital to reduce its loss. Much of that investment in analytical tools is available and applicable to manage risk in environmental systems.

Human intelligence is not only adaptive and competitive, it is creatively prospective. The chaos of speculative investment among competing, but interdependent interests can provide the necessary focus and energy to quantify and model competitive ecosystem behavior. The models can rapidly adjust to new information. A free market can integrate the present value of various contingencies into a determined set of adjusted options. These are the real blessings of and mandates to personal responsibility, not achievable under a coercive system, wherein people are habituated to avoid blame based upon retrospective fear. There is no civic authority that has the adaptively prospective ability to manage risk, as does free enterprise.

Political motives have historically been far more corrupting than a managed and audited profit motive under the rule of enforceable contract law. Political corruption is usually harder to detect or redirect because the individual profit to politicians can be indirect, non-pecuniary, or hidden to avoid prosecution. Civil power relies upon third party audit to validate reliable investment data. Civic enterprise has the power and scale to avoid independent verification.

It is harder to attribute individual motives in either a civic or non-profit enterprise than to understand the profit motives of private enterprise (which has been one of the reasons that political environmentalists and non-profit foundations have remained above suspicion for so long). When one looks, however, the political and economic motives of both are easily identified, even if profit via manipulating the power of government is obscured. The problem is: What alternative do we have, once the corrupt motives and acts of the foundation/ agency/NGO cabal are identified and publicized? Which system is inherently more subject to being held accountable?

Can we trust private enterprise to manage the environment? If not, should we give the job to a government monopoly? That is the choice here.

Over the last century, there is a record of over 100 million deaths, citizens killed by their own governments (by deliberate starvation and execution). 'Oh, but that wasn't OUR government,' you'll hear, 'WE have rights under the Constitution.' You hear people say that, even while they are insisting upon violating the Constitutional property rights of others in order to get what THEY want. Constitutional rights don't seem to matter much to them when they pertain to farmers, ranchers, and forest landowners. Now that these precedents have been set, giving eventual control of the use of ALL land to government, why do you think that the bureaucrats won't come after your livelihood, your property, or your children?

It is paradoxical that the very scientists, who advocate biology education based exclusively upon the theory of natural selection, should also advocate the exclusive use of bureaucratic political hierarchy to manage competitive ecosystems. Immersed in a successful Darwinian economy, and in the name of preserving Darwinian ecosystems, it is bizarre that a society founded upon free-market capitalism and private property rights has assumed that civic control of environmental risk constitutes a "natural" monopoly. With an unbroken history of democracy leading to tyranny, it is frightening that a successful society, founded upon republican principles of limited government, should justify an irreversible accrual of power in the hands of a demonstrably incompetent and historically destructive master.

It is high time to break up the civic monopoly in environmental management with the introduction of a viable competitor: the free market itself. The problem with that idea has been identifying checks and balances within the market with which to motivate individuals to freely account for externalities associated with the use of their property. The good news about a free-market management system is that the motives of those in business may be less confounded with religion or political power. Free market behavior is easier to understand and manipulate because the motives and principles are simple.

Who would be accountable for damages in a free-market environmental management system?

Try to find a manufacturer who is not insured or cannot be ultimately held to a guarantee. On the other hand, try to find a government program for which the controlling agency is fully accountable for its product. Neither private industry nor government is perfectly accountable or innately competent. The point is: Which is better suited to the job and which is more likely to extend the limits of competence and be accountable for its mistakes?

Wouldn't one logically want an environmental management system that rewarded the most productive in a competitive market of ideas, observations, and innovations? Can you imagine a fiercely competitive market in ecosystem management? Can you imagine an industry producing new tools for ecological measurement, analysis, and restoration activities as competitive as the computer business? Could there be ecosystem management with an insured guarantee? How would it work?

That is the subject of the rest of Part III.

Summary of the Thesis

The proposed civil verification system provides privately certified environmental management with an insured guarantee. Certification companies audit practitioners to validated process specifications. Competitors in the verification business have reason to assure that their customers operate at both minimal risk and cost because they reinsure the practitioners. The program requires continuing research and education toward extending the state-of-the-art of resource management practice. Insured certification, as proposed, must supercede civic permit authority for those under coverage.

The system generates accounting data, necessary to determine the financial worth of insured ecosystem assets, as required of certified operations. This is similar to the way industrial insurers developed their understanding of financial risk via the scope and probability of insured losses. The certified practitioner combines data from compiled from hazard mitigation and habitat restoration projects with required research and continuing education. That data serves valuable purposes within the system.

Identified and accounted risks immediately improve the conduct of operations because they objectively justify and prioritize investments to reduce or offset those risks. Pooled risk also counterbalances less intrusive experiments against those that are more aggressive through purchase of the use of offsetting assets. Uses of parcels and the nature of risk reduction investments then differentiate according to local attributes. Crude pricing schemes begin to take form, by which to market rights to use ecosystem assets capable of offsetting other risks.

Ecosystem assets have financial worth, as long as they can be bundled into valuable units. Recognizing natural process assets as worthy investments will attract capital to successful risk reduction and risk offset enterprises. To reduce the cash flow requirements, one must reduce the transaction overhead.

Many resource assets are mobile or have such low unit value that minimum economies of scale can wildly exceed the bounds of traditional property lines. The solution is to create definitions of property as bounded uses of ecosystem PROCESS assets that transform the state of these mobile goods. Process units could then operate on a noncontiguous, global scale and overlay other economic land uses that may well have their own boundaries.

Stock ownership and the cost of pooled risk engage self-interested consideration of others, holding competing assets as overlays of coincident uses within a particular area or spread among non-contiguous regions. These can extend across the entire planet when connected by an appropriate transmission medium.

This proposal in this book is a synthesis of these components:

The system architecture is depicted in Figure 2 on page 120.

The components are applied according this principle:

To improve ecosystem health, invest in shares of private enterprises selling uses of natural processes that are priced by their ability to offset environmental risk.

It seems almost too simple, doesn't it? Please see Figure 2

Natural Process: That Environmental Laws May Serve the Laws of Nature, ISBN: 0-9711793-0-1. Copyrights © 1999, 2000, & 2001 by Mark Edward Vande Pol. All rights reserved. No part of this book may be transmitted, archived, or reproduced in any manner or form without written permission, except as directed by the fair use doctrine under United States Copyright Law. The business method described in this book is covered under US Patent Pending.

First Edition published 2001 by Wildergarten Press, P.O. Box 98, Redwood Estates, CA 95044-0098. URL: Library of Congress Control Number: 2001092201. Vande Pol, Mark Edward, 1954-
Contains: 455pp, 3 Figures, 8 Photographs, 15 Charts, 2 Tables, Bibliography, and Index.