Christian economist Doug Bandow, a long-time friend, has published three thoughtful responses to Laudato Si, Pope Francis’s encyclical on the environment. One is “In Calling on Government, Laudato Si Underestimates Power of the the Market.” It is, as usual, clear and concise. This excerpt is particularly important:

… the Pontiff’s own goals conflict. For instance, he speaks movingly of the dignity of work and its importance for all, including the poor. These jobs—especially better ones, of higher quality with higher pay—come from the operation of markets rooted in a regime of property rights. Even Marx recognized the productive power of capitalism, which destroyed aristocratic structures and empowered impoverished peasants. The more expensive and extensive the government controls, the fewer and less remunerative the jobs.

Perhaps most disappointing is how the Pope seemingly views capitalism, and especially property rights, as adversaries if not enemies of a better, cleaner world. Yet most environmental problems reflect the absence of markets and property rights, the “externalities,” in economist-speak, which impact others.

Pope Francis recognizes the problem but still blames capitalism: “As long as production is increased, little concern is given to whether it is at the cost of future resources or the health of the environment.” Rather, “businesses profit by calculating and paying only a fraction of the costs involved.” However, that occurs where property rights either do not exist or are not enforced. That is the only way industry can transfer emissions to others next door and far beyond.

The encyclical rightly insists on “the obligation of those who cause pollution to assume its costs, and the duty to assess the environmental impact of given projects and works.” The best way to achieve this end is to either create or mimic markets and property rights when possible. That’s the theory behind a carbon tax, which attempts to impose the full “social cost” of their activities on producers.

Free market capitalism creates an important foundation for environmental stewardship. Alone, markets are not enough. They do not answer the ultimate questions about how clean or beautiful. But they help achieve the end chosen.

There is no better evidence of the efficacy of markets and property rights than the environmental consequences without them. The old Soviet bloc committed what some in the West labeled “ecocide.” From the Three Gorges dam to air quality in major cities, still reforming China has struggled to match economic growth with ecological improvement.

Even in America public control rarely ends well. Garrett Hardin famously wrote about the “tragedy of the commons,” in which land open to everyone typically is misused by everyone. Federal range and forest land is badly managed, not because government officials are malign, but because the incentives they face are perverse. Similar is the case of the Amazon rain forest, cited by Pope Francis: indigenous peoples typically lack defensible legal rights to what should be treated as their lands. He worries that “pressure is being put on them to abandon their homelands” to make way for economic interests. If they own their land, they can better resist such pressure.

In contrast, a private owner bears both costs and benefits, and suffers when he misuses the resource. The owner may make a mistake, but his power to do harm is sharply limited. In contrast, the U.S. government mismanages hundreds of millions of acres at a time. Simply selling off such land ultimately would improve the environment.

Yes, indeed, the free market is amazing–not omnicompetent, but amazing nonetheless, enabling free people to produce great wealth of all kinds, including the tulips pictured above.

Read Doug’s whole article. It’s well worth your time.