v'ܩ What if Everyone…?
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What if Everyone…?

November 23rd, 2008

Environmentalism and Prisoners have the same problem.

What if everyone…? You can fill in the question with whatever you like and it will be an instantly recognizable argument. Whether  we are talking about people picking flowers in some imaginary field or we are talking about voting. If you mention to someone you intend to do something that is generally considered irresponsible or ‘bad’ people will say: What if everyone did “Some Bad Thing”? They will use this as a way to convince you that you shouldn’t do it - because if everyone did it something awful would happen. This is generally the state of Environmentalist discourse. Why shouldn’t I leave my computer on all day? Why shouldn’t I drive around my old beater from 1957 that dumps out black smoke as if it were designed for that sole purpose? It’s obvious right? Because if we all did it we would damage the environment. We would have smog problems everywhere. All of the fish will die. All of the polar ice caps will melt. This could go on ad nauseam.

Let the market solve it?

Now generally I would allow the market to solve problems. If there is a real problem then people will be willing to pay more for products and services that solve this problem. Solving the problem in this instance would be developing products that hurt the environment less than the current products available. Cars are a good example of where this is currently being done. The market has demanded cars with increased fuel mileage and auto makers have delivered them. The automakers have also delivered products with decreased emissions. Factories have also reduced many of their emissions. Was there a market demand for these changes or were these changes the direct result of government regulation? As far as that goes were recent pushes for better fuel economy just the automakers way to get a head start when they saw the writing on the wall? So why, if all of these things are ultimately good for all of us, do we need the government to regulate it? Enter our prisoners.

The Dilemma

Let’s look for a moment at an old game theory puzzle called the “Prisoner’s Dilemma”. In this puzzle you have two prisoners who have together committed some crime. They have been caught and they have been separated. The investigators, however, need more evidence to convict and the only way they can get it is to ask each prisoner to give the other up. The image to the left details the actions to be taken and the possible outcomes. If a prisoner turns in his friend and his friend does not turn him in the prisoner will go free and his friend will be locked up for 5 years. These rules also apply to his friends behavior. Finally, If the prisoner turns in his friend and the friend turns in the prisoner then they will both be locked up for 3 years and if they both stay quiet they will each go to jail for 1 year based on the limited evidence the police already have.

The important thing to notice here is that for each prisoner it is ALWAYS better for them to speak to the police and give up the other prisoner than to remain silent. The reason this situation happens is because each prisoner lacks information about what the other inmate will do. If we allow the inmates to talk they can negotiate and agree to remain silent and thus minimize the total additive time spent in jail. Without information you are forced to make a decision you may not like.

Huh? I thought… Environmentalism?

Ok, so what does this have to do with environmentalism? The “What if everyone…” argument employed by the environmentalist movement, as well as a number of other people, all reduce down to the prisoner’s dilemma. While the overall benefit may be there if everyone “Stays quiet” (per the prisoner’s dilemma) we don’t have information about what other people will do so we must make decisions weight entirely by what will benefit us, personally, the most. This creates an impossible situation where no one can do the ‘right thing’ even if they want to.

Government Intervention…

Now, we are back at the initial problem. Even if we are against government regulation and intervention into markets that look like they can self-regulate we must acknowledge that some situations will result in the above dilemma and the result will not be the optimal, or preferred, solution. To this end the government regulations have to be designed to force participants to make the optimal solutions with the least negative effect for everyone involved.

Are there better ways to handle this dilemma? Is this an adequate reason for those in favor of letting the free-market solve problems to support SOME government intervention? I’m not sure. What is clear is if these things are truly important issues we will have to either force the best choice via the law or do a better job of marketing the problem so that there is no question whether or not the other guy will make the right decision. Hopefully someone with a better grasp on free-market economics than me has some thoughts on and solutions for this issue.