26. Why Did I Become a Free Market Environmentalist?

26

MAX FALQUE

WHY DID I BECOME A FREE-MARKET ENVIRONMENTALIST?

BASED ON MY FAMILY BACKGROUND, I should still worship central government and “service public,” like the great majority of French. My family shared two traditions: on my father’s side, conservative provincial and provençal bourgeoisie engaged in farming a family estate since the 16th century, and on my mother’s side, the value of the liberal, intellectual, Catholic beliefs. But everybody agreed about the sanctity of bureaucracy.

Studying law at the Montpellier University in the 50s could not introduce me to classic liberal thinking, since the clear distinction between civil and administrative law was (and still is) a basic fact. In economics classes, references to Keynes and Samuelson left no room for unknown Austrian economics. The Communist party used to get nearly 30 percent at the general elections, and most “intellectuals” were at least fellow travelers or useful idiots, if not true believers.

Things became worse at the Institut d’Études Politiques (alias Sciences Po) in Paris. There, the ultimate and obvious goal was to become a top civil servant by majoring in the Service Public department. Most professors were high-ranked officials and some of them judges at the Supreme Administrative Court (Conseil d’État).

The teaching was outstanding and students’ entrance limited, but the view that only government was able to set the goals and organize the means to lead the French people toward happiness was a quasi-sacred cow. The idea that goods such as education, electricity, telephone, insurance, banking, even housing and car manufacturing could have been better produced by private business was hardly discussed. It was a matter of faith. However, if Bastiat was not mentioned, Tocqueville was revered and Raymond Aron spoken of.

Just after graduating in June 1959, I managed to attend the one-month July session of the Salzburg Seminar in American Studies in Austria. In addition, I was awarded a one-year scholarship at Queen’s University in Kingston (Ontario) to study business administration. Would these decisions help or hinder my shaky ambition of joining the Ecole Nationale d’Administration to become a top civil servant? In order to make things clear, my uncle Bernard Guyon, then dean of the Aix en Provence University, managed a meeting with his old friend Jacques Chapsal, chancellor of Sciences Po. The answer was that “studying in North America is a coup d’épée dans l’eau” (i.e., a useless and counterproductive strategy). This proved true beyond expectation!

Here I discovered an intellectual world beyond the French one. The Salzburg Seminar was (and still is) a wonderful institution in its physical setting (in a 18th century Schloss) and its intellectual content. At the July 1959 session, the teachers were rising stars, such as Daniel Bell, Seymour Martin Lipset and Walter Berns (whom I met some forty years later at the American Enterprise Institute). I discovered institutions such as self-government, federal constitutionalism, competing democratic systems, citizen participation, etc.

Joining Queen’s University in Canada in September 1959 was a real cultural shock, and studying business administration introduced me to authors such as William Whyte and Peter Drucker. I happened to read George Orwell, not yet published in France. Quite a change from Paris!

Coming back to France was both a great pleasure and a great disappointment. Everything looked petty and mean. To make things worse, I had to join the army. I just hated it and I decided that a fair market transaction was to adjust my effort, contribution and zeal to the amount of my pay (some 50 cents a day plus some lousy army cigarettes). In addition, the food was so miserable that we had to buy more just to survive. That lasted nearly two years; I then managed to escape prison with an unexpected promotion to non-commissioned officer.

In September 1962, I was appointed as assistant professor at Université de Montréal to teach public administration. It was the time of the so called Quebec “Révolution tranquille” (Quiet Revolution), and French Canadians thought for a while that the French administrative setting could help them to new and positive institutions. This belief looked to me naïve and misleading. After two years I became persuaded that teaching the beauty of public bureaucracy was not my cup of tea.

Back in France I joined a consulting firm in Marseilles where I did some research for the Commissariat au Plan, a kind of central planning agency which was supposed to control and promote economic growth and set up regional planning.

In January 1968, I came back to the Salzburg Seminar to attend a one-month session on urban and regional planning. Looking over the icy lake and the snowy mountains from the wonderful library is an unforgettable experience. But the main event was meeting Ann Louise Strong, from the University of Pennsylvania, who introduced me to the American literature on urban and regional planning from the perspective of environmental considerations. Reading Lewis Mumford, William Whyte, Jane Jacobs, Aldo Leopold, Thoreau, Edward Higbee, etc., opened my mind to new dimensions.

In March 1968, I joined the “Société du Canal de Provence et d’Aménagement de la Région Provençale,” a government-owned company in charge of setting up a large water irrigation scheme in the Provence area. Here I experienced the ambiguity of public intervention based on what I later discovered to be public choice theory.

I was then in charge of surveying farm operations surrounding the booming city of Aix-en-Provence. The idea was to adjust water supply infrastructure to the future of farming production. One wonderful spring morning, we were in the process of filling out the questionnaire with a farmer who happened to be a city counselor of the village. He bluntly explained that, as soon as the water pipes were in operation, the minimum size zoning lot would be revised from two acres to half an acre.

I discovered that public funding (mainly from the French Ministry of Agriculture and European Commission) helped to transform the best agricultural land into urban land. I reported the fact to the executive staff of the company and proposed to submit a water delivery contract with an easement prohibiting development, or in case of development, compensating the cost of the public investment in agricultural water supply.

Of course this was fair and accepted by the farming community—but the board of the company was controlled by powerful local politicians who had long understood that giving away water for free got them votes and that, anyway, zoning was a kind of Monopoly game. This was the purely perverse side effect of a public policy, i.e., using public money earmarked for agricultural enhancement to destroy the best and limited agricultural land. The company executives paid lip service to my easement scheme, and of course nothing was changed. Creeping electoral corruption continued and still does, more than thirty years later! The Ministry of Environment and the Ministry of Agriculture agreed that the problem did not exist since local land use plans were supposed to cope with it.

In 1969, on behalf of Ann Louise Strong, the Ford Foundation’s Bill Pendleton generously offered me a fellowship to spend one year at Penn at the Institute of Environmental Studies. So, in September 1970, I set off to Philadelphia with my wife Ursula and our three children. It was a wonderful intellectual setting. Ian MacHarg’s teaching and studio were a brand new way to look at man-nature relationship. His famous Design With Nature was just published. Ann Louise Strong demonstrated that compensable regulation was one of the best ways to solve the taking issue. Of course, the role of government, especially the federal government, was to be strengthened, and free market environmentalism was not even mentioned, though I heard there of Hardin’s Tragedy of the Commons for the first time. I still remember the first anniversary of “Earth Day 1970” where students wore the “Stop at two” badge. Since we had already three children, I asked viciously if and how I should get rid of the third baby (at the time nobody was familiar with Julian Simon’s ideas)!

I came back to France with mixed feelings, but persuaded that ecological planning could supersede and improve pure technocratic and political planning, and that environmental zoning without some kind of fair compensation system was unstable, inequitable and inefficient. I felt that environmental planning needed a complete reshuffling, but still using traditional tools of government intervention. (It took me ten years to publish Design with Nature in French.)

The concept of free market environmentalism (FME) came as a revelation to me when meeting R.J. Smith at a Lincoln Institute conference at Harvard in July 1983. R.J., in a plenary session, briefly explained that land could be best managed by property rights and market instruments. Ann Louise Strong, as chair of the panel, dryly answered that this was outdated and inappropriate thinking. I felt sorry for R.J. and I invited him to discuss the issue at a neighboring pub. It was quite a fascinating evening and, back in France, R.J. sent me his recently published article, “Privatizing the Environment” (Policy Review, 1982). I was then introduced progressively to the FME literature and scholars.

In 1985, John Baden chaired a Liberty Fund seminar in Aix-en-Provence and handed me a document with seminal papers from Anderson, Hardin, Stroup, Baden, Simon, Nelson. For the first time I got a selection of the current FME literature and decided to spread the message in France.

However, the political setting was changing. The socialists and the communists, in charge of the government since 1981, were to be severely defeated in the 1986 general election. Classical liberal ideas gained momentum, notably with congressman Alain Madelin. Free-market economists organized a Mediterranean cruise in November 1985 where academics, politicians, officials, businessmen discussed the new course of action for the incoming government.

I had written an essay, “Libéralisme et Environnement,” which was to be published in 1986 in Futuribles, a journal founded by Bertrand de Jouvenel in the fifties. The idea that property rights and market instruments were often better tools than government was like a dirty word. In order to make sure that new concepts were no more than pure non-conformist thinking, Hugues de Jouvenel asked three other socialist-oriented specialists to comment and critique my essay. This article was the first paper dealing with FME published in French in a major journal.

I must also mention the role of the “Université d’été des Nouveaux Economistes” organized by Jacques Garello every summer in Aix-en-Provence since 1977. Each week-long session featured classical liberal economists. There I met top environmental specialists such as Rick Stroup, Terry Anderson, Fred Smith, R.J. Smith, Jean Luc Migué, Jane Shaw, John Baden, Jo Kwong, Roger Bate, Bruce Yandle, etc. The 1992 meeting dealt with “New Resources Economics and Institutions.”

Writing articles was a necessary but small step. Guy Millère and I edited and published “Ecologie et liberté, une autre approche de l’environnement” in 1992 in order to give in French the basic material on FME.

In 1992 Alain Madelin, the only true classical liberal politician in France, and his quasi–spin-doctor Henri Lepage, asked me to help them set up the “International Center for Research on Environmental Issues” (ICREI) which was to be an FME think tank. For some four years, our main activity was to organize a two-hour colloquium every two months in the Assemblée Nationale premises with top environmentalists, both French and foreign. However, in 1996 ICREI was no longer able to find adequate funding since, as usual, the conservatives were no longer interested in pushing ideas and because the succeeding conservative Ministers of Environment were more interested in me-tooism with socialist thinking than introducing reforms.

Several conferences in France and abroad inspired me to write papers, which had but limited influence. Again, Alain Madelin, creating his own party, “Democratie Libérale,” was the best support to spread FME, ideas but this was a mixed support since he was considered as a brilliant but uncontrollable maverick by the conservative establishment inspired by technocratic and bureaucratic Gaullism.

In 1996, in conjunction with Jean Pierre Centi, professor of economics at Aix-en-Provence and a member of the so-called “Nouveaux Economistes” group, we decided to set up a three-day international conference on “Property Rights and Environment.” Michel Massenet, a highly respected top official (Conseiller d’État) chaired the meeting. Funding was difficult, but with the help of land owners’ organizations (both at the French and European level) and paradoxically, some government money, we succeeded beyond expectation, to the point that we decided to set up a conference every two years dealing with each environmental resource, e.g., water (1998), marine resources (2000), coastal zone (2002).

I am indebted to many people. In economics, to the writings of Henri Lepage, Rick Stroup and Terry Anderson, in addition to Adam Smith and Frédéric Bastiat. In legal matters, Bruce Yandle, Richard Epstein, Baudoin Boukaert and the late Christian Mouly helped me to understand the complexity and the paramount importance of property rights in both civil and common law.

In political science, John Baden introduced me to public choice and the shortcomings of government intervention, as well as to Elinor Ostrom’s literature on common property management. In addition, there were close and long-standing links with Competitive Enterprise Institute, Political Economy Research Center, Atlas Foundation, Land Trust Alliance, National Trust, Instituto de Ecologia y Mercado, Institute of Economic Affairs, Reason Foundation, International Association for the Study of Common Property, which were constant sources of intellectual ammunition.

Thanks to them and many others, today FME is discussed in France. In the early eighties it was just a kind of pornography. This is no small accomplishment in a country where communist, socialist and Christian intelligentsia alike consider market instruments and property rights as a necessary evil at best, and government the finest instrument to insure “liberté, égalité, fraternié.”

The fact that independent think tanks are extremely difficult to set up in France is a major handicap to the introduction of new ideas. Conservative political parties are generally not interested in ideas, except when they are not in power. Big business, largely controlled by ex top bureaucrats, takes advantage of state interventions, and bureaucrats are more interested in turning out regulations than using new tools they do not control. Eventually, and this is a trivial conclusion, “Ideas rule the world” (Keynes) but spreading them needs conviction and constant action.

Beside ideas, the next step is to address the public at large through media. As John Stossel put it, “Bastiat is just too tough for most people in the world to absorb it and my goal is to try to explain this stuff in simple language” (2001).

Max Falque is an international consultant in environmental policy and managing director of ICREI.