ABSTRACT
The previous chapter elaborated on the substantive roots of liberalism and demonstrated its foundations in the institutional differentiation and concomitant socialisation of provisioning (economic) processes that characterised the transition from feudalism to capitalism. However, the issues that had preoccupied the classical political economists became marginalised with academic specialisation as liberal economic theory pursued the science of exchange quite independently of substantive concerns. The preoccupation with market prices and exchange leads contemporary liberal theorists of ‘the economy’ to reinforce the differentiation of economic processes, which points towards ‘self-regulation’, over and above their socialisation, which points towards ‘management’. Economic theory is thereby generally associated with economic policy based on laissez-faire, which implies that the economic system be directed by market prices alone, such that ‘order in the production and distribution of goods is entrusted to [the] selfregulating [price] mechanism’ (Polanyi 2001: 71). This notion of ‘free markets’ has gained currency under the rise of neo-liberalism, which asserts that competitive market forces free of government ‘intervention’ best serve the efficient functioning of the capitalist system (Wheelwright 1999: 249). The contemporary articulation of economic liberalism has thereby been defined as ‘the disposition to rely on prices, markets and the private sector, as opposed to state initiative and administrative regulation, and hence to frame economic policies with a view to extending the sphere, and improving the operation, of markets’1 (Henderson 1989: 10-11). However, rather than less government, the act of ‘extending’ and ‘improving’ markets requires proactive statecraft and results in extensions to the regulatory functions of the state which, as Polanyi (2001: 147) noted, is the necessary accompaniment of a laissez-faire economy (cf. Vogel 1996). This is no less the case when policy articulation is turned towards the environment. This chapter begins the specific engagement with
liberal contributions to the environmental problematic, and in addressing the economic contributions, it also examines the theoretical underpinnings of the environmental policy and governance considered in Chapter 5, enmeshed as they are with liberal economic norms. However, having flagged its dominance, economic liberalism is by no means a cohesive framework for environmental considerations, nor are its ‘boundaries’ unambiguous, as the affiliation with libertarian ideas reveals. On the one hand, its emphasis on markets need not abate state ‘intervention’ as noted in the previous chapter. In this respect, orthodox neoclassical theory, through its development of ‘environmental economics’, has been a decisive vehicle for economic liberals in shaping the way ecological problems have been understood and addressed politically (Dryzek 2005: 121; Rosewarne 1993: 54). On the other hand, the libertarian advocates of ‘free-market environmentalism’ are far less sanguine about the activities of government and also reject the ‘modernist’ pretensions of neoclassical economic theory as embodied in its positivist models.2 This position advocates the de-politicisation of environmental decision-making through the ‘privatisation’ of nature. Although predominately on the fringes of applied policy, libertarian ideals have served an important discursive role in neoliberal programmes and have a growing relevance in ‘environmental neoliberalism’. The free-market perspective is more indicative of the Austrian School than neoclassical theory, and its libertarian foundations may pose a problem for key liberal institutions that are also of interest to environmentalists.
