Problems with Solutions to Pollution

"... Our short-run look at income and profit keeps us from the long-run look at the future of life. "

by Robert W. Haseltine

Industrial pollution — no easy solution

T

HE EFFECTS OF BOTH AIR and water pollution on the en­vironment have been observed for years. One of the best examples of the debilitating effects of air pollution is Sudbury, Ont., Canada. Interna­tional Nickel and "the world's tallest smokestack" put enough sulfur dioxide and nitric oxide into the atmosphere to have caused the death of all vegetation, with the concomi­tant erosion and loss of all soil down to bedrock, for about 20 miles east of Sudbury. For anyone familiar with the New York City area, the East River and Hudson River both give a good example of water pollution carried to its extreme. A major lack of foresightedness has occurred not only in the business community, but in the consumer community as well.

Prof. Haseltine, Economics Editor of USA Today, /s associate professor of economics, State University of New York at Geneseo.

Both sides refuse to accept pollution in its various aspects as having any form of economic consequences....

The average citizen, you and me, is part and parcel of the problem. Unfortunately, as with most complex problems, there are more things in­volved than meet the superficial glance that most of us give to prob­lems of this nature. Most Americans are after the "quick fix." If we are hungry, we go to the nearest fast food place and quickly fill the vacuum. Similarly, in the area of fixing environmental problems which have been developing for well over 100 years, we ask "them" (whoever we may think "them" to be) to quickly make the problem go away, much as a child asks mommy to kiss the bruise and take away the hurt. The solutions are not that easily found.

... When it comes down to which is going to suffer, the environment or my family, my family has to take precedence. The pollution spewed

into the atmosphere by the smoke­stack is a long-range problem, while my support of my family must be viewed as a short-range problem. If there is no food coming into the house in the short run, we starve to death — and there is no long run.

The short-run problem

Ever since business began to operate in the beginnings of the Industrial Revolution, it has generally done so with a total disregard for the environ­ment. Business, any business, has to be very cost-conscious if it is going to exist long in a free-market society. At least that is what we are told by American business as it fights any of the laws which would place restric­tions on the manner in which it dumps its wastes into the atmosphere, or the ecosphere in general. Business, according to economic theory, at­tempts to operate all of its produc­tion in a least-cost manner. That is, in putting together the resources

76 AMERICA IN CLOSE-UP

5. continued

which it uses to produce a final good, it uses capital and labor in a manner which will produce the most output for the least possible cost per unit of production.

Business, therefore, will use capi­tal, especially, in such a way that labor, as it works with that capital, will be most productive. For this reason, more and more businesses are turning to robots to do the paint­ing, welding, and countless other te­dious jobs that up to now have been done by wage labor. This means that more and more jobs have disap­peared from the industrial sector of the economy, with no corresponding positions opening up in the service sector. From this stems an over-all loss of jobs, especially among tho; e who have poorer levels of education and a need to protect their families and livelihoods. If business puts into the production line the types of equipment which will clean up the residue so that what comes out of the smokestack is nothing but steam, they recognize that a number of things will have to occur.

In the short run,iftheydothisand other competing businesses do not do this, their costs of production will rise while that of their competition will not. This means that unit cost is more than it was previously and, if the levels of profits are to remain high enough to satisfy the stock-

holders, then the market price of the good will have to be increased....

Polluting the air

The major reason for air pollution, especially as one looks at the prob­lems of hydrocarbons and lead, is the private consumer. In order to save four to 10 cents per gallon, we find people doing away with pollution control devices, or buying a device which allows them to add regular gas to their tank instead of being forced to purchase unleaded. This has caused a problem with the amounts of hydrocarbons and lead in the atmosphere close to the surface, just as the high smokestack has added to the problem of long-distance pollu­tion. The problem which is caused is endemic throughout the world,... and the basic cause is that which is outlined above - the economics of self-interest (greed) which causes me, as a consumer, to save as much of my income as possible, just as the busi­ness manager attempts to save the company as much money as possible. I can not point a finger of blame, because, if I do, I find three other fingers pointing back at me....

Polluting the water

The waterways are another... area that we find it easier to pollute than to spend the money necessary to

clean wastes properly. Wisconsin has a law that all houseboats must have a self-contained head (toilet) which must be pumped out properly and dumped properly if you have it done in the state of Wisconsin. The cost is not exorbitant, about $5.00. If, how­ever, you go across the river to Iowa, and have it pumped out in that state, it is only about $1.00. What is the difference? In Wisconsin, it is pumped into a storage tank, then into a sewerage disposal system. In Iowa, it is pumped directly into the Mississippi River to become part of the problem of downstream urban areas which may take their drinking water from that river. For the indivi­dual, it becomes a dilemma: Should I save money by pumping in Iowa, and harming the river, or should I waste my money by pumping in Wiscon­sin? For some reason, Iowa does a thriving business in pumping!

Where does it lead? While the first impact is on wildlife, we are all a part of this "marble in space," and what affects other life will eventually affect me. The effect might be emphysema, heart problems, or general ill health, if not death, and it is definitely an economic problem affecting incomes of both business and workers. So far, however, our short-run look at in­come and profit keeps us from the long-run look at the future of life. Yes, we are all a part of the "econo­mics of greed," like it or not.

PART C Exercises

1. Comprehension

Peter Drucker on Entrepreneurs

Which way of completing each of the following sentences agrees with the original text? Some sentences may be completed in more than one

way.

1. An entrepreneurial boom

a) will possibly emerge in this century.

b) has not been seen in this century.

c) is the extraordinary economic event of
this century.

2. An enormous number of new jobs

a) have been created by large established
companies.

b) have been taken by the millions of women
who have entered the labor force.

c) have been taken up by the quickly
growing population after the Second
World War.

3. The large majority of high-tech entrepreneurs
fail because

a) they only talk about profit but do not
work hard enough.

b) they do not have enough cash to start a
business.

c) they know too little about financial
planning.

4. The two men who started a barbershop chain
were successful because

a) they were real experts in haircutring.

b) they applied all the elementary
management techniques.

c) they only accepted cash from their
customers.

5. The new entrepreneurs rely heavily on

a) glamor.

b) predictable technology.

c) demographical data.

6. Most new entrepreneurs worked for big
companies until they realized that

a) there was no chance of being promoted in
the near future.

b) they had a good idea which they thought
they could sell themselves.

c) they could build a thousand million dollar
company themselves.

7. Compared with giant companies small
businesses

a) are more flexible.

b) do not lay so much stress on the
organization of management.

c) enjoy a higher degree of anonymity.

8. Peter Drucker believes that big companies

a) will die out soon.

b) are not as efficient as they used to be.

c) like other big institutions, are often
regarded as failures.

Anticipation

Inside Bell Labs

Before you read the text, look at the layout.

1. What can you anticipate about the article by
just looking at the title photo and the
subtitle?

2. The italicized introduction or lead is meant to
provide as much information as necessary to
arouse the reader's curiosity about the text.
What aspects are mentioned in this
introduction? Which ones would you be
interested in following up?

3. Who is the author and what are his
credentials?

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