Fox's Stossel Overplays His Invisible Hand

Blog ››› ››› JILL FITZSIMMONS

Fox Business host John Stossel contradicted himself within just a few paragraphs over whether the "free market" can remedy pollution.

In a FoxNews.com column, Stossel acknowledged that the "free market ... doesn't offer a practical remedy to pollution," but went on tout "capitalism" as the answer to pollution just a few paragraphs later:

Originally, environmental rules were a good thing. I love the free market, but it doesn't offer a practical remedy to pollution. I could sue polluters for violating my property rights, but under our legal system, that's not even close to practical.

So in the '70s, government passed rules that demanded we stop polluting the air and water. Industry put scrubbers in smokestacks. Towns installed sewage treatment. Now the air is quite clean, and I can swim in the rivers around Manhattan.

[...]

Throughout the world, most reductions in pollution have been achieved because of capitalism, not government control.

Fracking for natural gas reduced greenhouse gas emissions.

Even much-hated coal and oil provide benefits. [emphasis added]

Stossel was right the first time. Experts from across the political spectrum say that when the "free market" does not account for the external costs that fossil fuel production imposes on society, the government must step in to put a price on pollution. As Nobel Prize winning economist Paul Krugman put it:

Externalities like pollution are one of the classic forms of market failure, and Econ 101 says that this failure should be remedied through pollution taxes or tradable emissions permits that get the price right. [...] So if you really believed in the logic of free markets, you'd be all in favor of pollution taxes, right?

Krugman highlighted a 2011 study by centrist economists which found that coal imposes more costs on society than any other industry and may be "underregulated" as its price does not account for these damages.

To promote his Fox Business special portraying environmental rules as "green tyranny," Stossel has been claiming that the pollution problem in the U.S. is "largely solved."

But the American Lung Association's State of the Air 2012 report found that 41 percent of Americans -- more than 127 million people - live in areas where they are exposed to "unhealthful levels of either ozone or particle pollution." Meanwhile, an EPA report released last week found that 55 percent of U.S. rivers and streams are in "poor biological condition," and 9 percent pose a danger to human health:

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