Title: The iron fist vs. the invisible hand: interventionism and libertarianism in environmental economic discourses

Authors: Philip Z. Maymin; Tai Wei Lim

Addresses: Department of Finance and Risk Engineering, NYU-Polytechnic Institute, 6 MetroTech Center, Brooklyn, NY 11201, USA. ' Department of Japanese Studies, Chung Chi College, The Chinese University of Hong Kong, 6/F Hui Yeung Shing Building, Shatin, New Territories, Hong Kong

Abstract: Drawing from a broad range of sources, we define and discuss the two primary ways of contemplating issues related to environmental economics, namely, interventionism and libertarianism. We then interpret a cellular automaton as a model that allows for either approach, as well as anarchy, and show that interventionism exponentially reduces the number of possibilities while libertarianism, even when only probabilistically applied, tends to retain rather than destroy the underlying economic complexity. Thus, the libertarian, ex-post, remuneration approach may deserve more than the scant consideration it typically receives in such discourse, while the interventionist, ex-ante, regulation approach may have hidden long-term dangers not previously recognised. More generally, the approach outlined here may prove useful as a mechanism by which various regulatory proposals may be tested and compared.

Keywords: intervention; libertarianism; state; natural environment; environmental economics; invisible hand; free markets; Adam Smith; self-regulation; marketplace; cellular automatons; anarchy; economic complexity; libertarian approaches; ex-post approaches; remuneration approaches; interventionist approaches; ex-ante approaches; regulatory proposals; energy resources; innovation; climate change; efficiency; pollution; entrepreneurship; entrepreneurs; entrepreneurialism; management; sustainable development; sustainability.

DOI: 10.1504/WREMSD.2012.049395

World Review of Entrepreneurship, Management and Sustainable Development, 2012 Vol.8 No.3, pp.358 - 374

Published online: 18 Sep 2014 *

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