Weekend Edition
November 24 / 25, 2007
The Origins of Neoliberal Environmentalism
Justice Stephen Breyer and Cancer Bonds
By JEFFREY ST. CLAIR
Any man admired by both Senators Ted Kennedy and Orin Hatch can't be all good. And, in fact, Stephen Breyer's elevation to the highest bench illustrates concisely how, across the past twenty years, Kennedyesque liberalism and Hatchian conservatism have merged into a unified, pro-corporate posture.
Put more nastily, Breyer's ascent to the Supreme Court offers an unpleasing paradigm for the utter bankruptcy and degradation of that liberal tradition of which Kennedy is erroneously supposed to be the custodian and stout defender. Those with short memories often ascribe certain familiar features of the socio-economic landscape to the "Reagan Revolution." Such features center on the erosion of government regulations unwelcome to big business.
But the intellectual and political groundwork was done by Teddy Kennedy's people back in the 1970s. And Stephen Breyer was one of them. This was the launch time for the deregulation of airlines, trucking and for the erosion of environmental victories won in the previous decade. Breyer and Alfred Kahn, another Kennedy man, predicted that in the bracing combat of the unregulated free market, the inefficient and unproductive would go to the wall, airline services would become more flexible, cheaper and, above all, more profitable.
Any student of the real world could have told them-and many did-the true consequences of deregulation would be greater business concentration and higher prices. Consumers paid the price and so did Kennedy's core constituency, organized labor. The same thing happened in trucking, deregulated in 1980 on Kennedy's initiative. In the next decade, freightworkers wages fell more than 25 percent.
In January of 1979, Breyer, then Kennedy's chief legislative counsel, published an extremely influential article in Harvard Law Review, in which he argued an old business favorite: Environmental hazards could best be dealt with by market mechanisms in which "rights" to pollute would be traded.
In other words, the country would be divided into zones and pollution index would be established for each zone, with companies allowed a certain amount of pollution within the overalll permissable limit. But if Company A used only 25 percent of its "pollution rights," it could trade or sell the remaining 75 percent to Company B in the same area that had already reached its limit. On paper, Company B would not be exceeding regulatory limits, though of course the people living next to Company B's plant would be dealing with higher levels of poisons.
To put it crudely, the Kennedy neoliberals wanted to organize a market in Cancer Bonds, offering relief to the Business Roundtable, which was screaming that in 1977 the operations of six regulatory agencies caused $2.65 billion in "incremental costs" to 48 major companies, about ten percent of their total capital expenditure.
Thus out of Kennedy's office came the initiative to replace environmental law compliance with "cost effective reforms," including pollution taxes and credits, effluent charges and markets for pollution rights. As environmental economists Jim O'Connor and Daniel Faber put it, the scheme is designed to "increase capital's flexibility to meet regulatory requirements but continue polluting in a profitable manner."
The regulatory theory promoted by Breyer was transmuted into law in the Clean Air Act of 1990. In May of 1992, the Tennessee Valley Authority bought an estimated $2.5 million worth of credits from Wisconsin Power and Light, which didn't need them. This credit allowed TVA to exceed its limit of sulfur dioxide and other toxic emissions. As Benjamin Goldman shows in his useful book, The Truth About Where You Live, among those on the receiving end, Shelby County, Tennessee, ranks twenty-second among all counties in the nation for excess deaths from lung cancer. Sheboygan County, Wisconsin, ranks twenty-eight from the bottom in the same category-an almost perferct reverse, mirroring the transfer of poisons from north to south, comfortable to poor, white to minority.
For Breyer, equity and the unregulated play of market forces move in harmony. His ascent to the Supreme Court owed everything to his patron, Ted Kennedy, in truth one of the most effective foes of the real interest of labor and environmentalists in the U.S. Senate today. Small wonder Orin Hatch is smiling.
For the environmental movement there are lessons in this history. The legislative triumphs of the late 1960s and early 1970s, many of them coming to pass in Nixon time, had indeed imposed constraints on corporate profitability. By the end of the 1970s, Congress had passed more than 20 major laws regulating consumer products, the environment and workplace conditions. Hence the corporate counterattack described above and ongoing to this day.
In the early and mid-1970s, environmentalists played the game of rising liberal expectations, assuming that their pluralist conception of the political economy would in turn permit, at level of both popular awareness and state policy, a new, environmentally aware attitude toward cost and regulation.
In the late 1970s, the corporate titans bit back and successfully set labor and environmentalists at each others' throats. Since a good many greens are middle class and essentially anti-labor in philosophical outlook, the antagonism was real. Also, by the end of the 1970s, mainstream environmentalism had moved from popular activism to managerial caution, with some groups, such as the Environmental Defense Fund, gladly endorsing and promoting the market-based theory of environmenal regulation offered by Breyer in his chilling 1979 tract.
Jeffrey St. Clair is the author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature and Grand Theft Pentagon. His newest book is End Times: the Death of the Fourth Estate, co-written with Alexander Cockburn. This essay will appear in Born Under a Bad Sky, to be published in December. He can be reached at: sitka@comcast.net.
