Sunday, January 20, 2013

Why Should the Public Pay for Industry’s Costs of Production?


A for-profit business has to figure its costs of production in establishing a price and maintaining a sufficient profit margin to warrant being in business.  This includes all inputs into the production process.  However, for many if not most American businesses, this does not include the costs of rendering all byproduct outputs from the production process harmless to the environment.  

There are certainly measures that are required by regulation, but they are minimal relatively speaking.  When any efforts are made to require more stringent measures, the common outcry from industry is that the measures are too expensive.  And so government typically relents and the pollution or other damage continues, with the environment being damaged, sometimes irrevocably, sometimes to be cleaned up at the taxpayer’s expense.

Before any product is allowed to be processed or manufactured, why isn’t it required that a business provide an environmental impact statement indicating the measures it will take to insure that any potential impact is mitigated to the point that the process is harmless to the environment.  If a business cannot with a sufficient degree of certainty make such a statement, it should not be allowed to proceed.  (The former phrase is in italics because industry routinely makes such bold statements without there being any rigorous research or data backing up the statements.)

The obvious case in point is hydraulic fracking, but the same principle applies to coal mining, electric generating plants, chemical plants, and many other industries where one wouldn’t necessarily think that toxic discharges would be a problem.  No industry should be allowed to despoil the environment.  And the public should not have to pay for mitigation measures that should be considered costs of production.   

If such a system is not put in place and the government/taxpayer ends up paying, then isn’t that a form of socialism that big business and conservatives so abhor?  Why is it only socialism to these people when the government helps those who are in need, but not when government either directly or indirectly subsidizes the cost of doing business?

This is but one more example where corporate interests usually trump all others because of the power they have through the money they donate to politicians and the money they spend lobbying for their point of view.  Those who speak on the public’s behalf are drowned out by the shear magnitude of corporate power over the process.