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Those Backwards Neo-Classicalists

Posted by Melanie LaFavre on December 19, 2000 at 21:34:58:

One of the principal themes of our class was that Neo-Classicalism is wrong, not only wrong but backward. It seemed that everywhere we turned we found one example after another that supported this conclusion. In a nutshell Neo-Classicalists believe that Capitalism is completely fair and that in a Capitalist system one can never be cheated. This erroneous theory extends even into the environment and pollution. The movie "Erin Brockovich" does a wonderful job of illustrating just how wrong the Neo-Classicalists are when it comes to this particular subject.

Just what is the Neo-classical belief about the environment and pollution? Interestingly enough they do admit that companies pollute, they also admit that pollution should not be left untended. Both of these admissions are actually surprising and somewhat contradictory to what one might expect from the Neo-Classicalist, unfortunately this is as far as the surprise goes. In typical Neo-classical style the theory is that if pollution is really a problem the market will bear this out and then resolve it. The belief is that the citizens will recognize that it is in the interest of the common good to stop pollution, and the response will be a non-political way of alleviating or stopping the problem. I emphasize that the solution will be a non-political one because it appears that politics and Neo-classicalism are enemies. Neo-Classicalists believe that Government should never get involved in economic problems. They feel that if the government would just stay out of it all problems would solve themselves through neo-classicalism. In other words Government is just this terrible thing that imposes itself and mucks the whole system up! The ideal of Neo-classicalism is that the pollution problem will give rise to a market that will meet the demand for a clean environment. Which brings me to another principal of Neo-Classicalism with which I have a problem; all things should be paid for. The all-popular Brita water purifier and the increasingly popular oxygen bars are prime examples of this ideal. Although you may be able to make an argument for this principal when it comes to goods and services it seems ludicrous when you apply it to the environment. You want clean air? Pay for an oxygen bar! You want clean water? Buy yourself a water purifier! Clean air and water should be things that all humans have a right to without having to pay for them. What happens when you donít realize that your water needs to be purified? What about baths and showers? How about when you even need to worry about being exposed to pool water? Purify the whole pool? Never go swimming? According to neo-classicalism thatís just what you would be expected to do. In considering the case of ďErin Brockovich" these are just some of the questions that can be posed. Ultimately these questions help to show just how wrong Neo-Classicalism is when it comes to issues of the environment and pollution.

It seems that most of the citizens of Hinkley, California are sick. Nobody seems to notice that this is odd until Erin Brockovich begins investigating the origins of their illness. One day while going through the files of a supposedly small real estate suit, she becomes curious as to why the medical records of the homeowners are on file. She goes to Hinkley to ask one of the homeowners about it. She learns that PG&E, the company that is trying to buy the house just offered to give the whole family a medical check up, all expenses paid. As Erin questions further she learns that PG&E approached the family and asked to buy their house from them. After a little investigating Erin discovers that there is chromium in the water as a direct result of PG&E. Unfortunately it is not chromium-4, which is actually good for you, rather it is chromium-6, which causes a number of diseases and medical problems which can ultimately lead to death. Worse than that it gets into the DNA and is passed on to oneís children. It doesnít take long before Erin has found over three hundred people in Hinkley that have experienced medical problems directly related to the existence of Chromium-6 in their water. It turns out that PG&E had built holding pools for the polluted water from their plant. The problem was that they never lined these pools to them to prevent the Chromium from seeping into the ground. The company let the chromium to seep into the ground for fourteen years, full aware of the damage they were doing. Then, when they decided that it would be best to let the people of Hinkley know what was happening, they told them there was Chromium-4 in the water and they told them how great it is for them. The only reason they did this much was in order to try and avoid a lawsuit. Thus was the sad story of the ill informed residents of Hinkley, California.
How can a neo-classicalist look at a case like this and tell us that the markets will create a solution? In the first place how were the people of Hinkley to know there was even a problem that needed to be solved? Even if they had known the community didnít have the money to develop a solution for the problem. This is another error of neo-classicalism; they expect the community will create a demand for the clean up the pollution as if they had the money to resolve it. The reality is that the pollution only makes the community more impoverished and the circle continues. The only reason the problem was solved and that there was an attempt to compensate the victims was because the law came in. Without the law and the government the pollution in Hinkley would probably still be going on today. The people would continue to get sick and not know why. It is a pretty safe bet to say that the pollution in Hinkley would have continued for many generations if not for the law and the government.
Another testimony to the fact that neo-classicalism is wrong, at least in the case of environment and pollution, is the that Erin Brockovich and Ed Masry have taken on seven more environmental cases since the Hinkley case. The idea that capitalism will solve all problems on its own is just absurd to me. I donít understand how anyone can truly believe in it, and I suppose I never will.


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