A communitarian green space between market and political rhetoric about environmental law

A communitarian green space between market and political rhetoric about environmental law

Environmental law evolves in a context of social values and political rhetoric about environmental law.


Arguments for particular “reforms” in those laws may look overwhelmingly convincing on a blackboard in the relative calm of our classrooms or in the cozy warmth of think tanks comprised of ideological comrades, but as soon as they enter a more public forum, they encounter highly predictable assault.

Listen, for example, to the typical frustration of one analyst in response to the persistent legislative logjam in environmental law: “During almost every two year cycle in the 1990’s, congressional committees have dutifully cranked out legislation to `reform’ most areas of environmental law, including clean water regulation, the protection of endangered species, and the Superfund–with full knowledge that their efforts were an exercise in futility.”(1) How can environmental change that looks so inviting to its partisans create a firestorm of public debate when legislators consider the proposal?

We can divine part of the explanation if we think seriously about language and its power to form and restrict our thoughts. Changes in our environmental laws are discussed in a rhetorical setting in which certain words, themes, values, and verbal strategies are especially effective. Pose your proposal in non-dominant forms of rhetoric and it just “does not sound right” to those who must ultimately decide its fate. This problem of language is particularly important in a legislative setting where support for specific environmental changes is far from overwhelming.

This article tries to show due respect for language as a factor in environmental law by arguing for the efficacy of a new rhetoric in which to ensconce the discussion of environmental reform. Because we think in images articulated by words, the logic for trying to break policy logjams by revising our form of discourse seems promising. Our hope is that new words may provide new ways of seeing(2) proposed environmental changes.

The development of our argument begins with a description of communitarianism as a way of looking at the world. Subsequent sections describe the power of market thought in public discourse and the gridlock it creates with respect to environmental legislation about the Superfund, wetlands, and endangered species. The final section suggests that communitarianism provides a middle road for those wishing to build a sustainable environment.


Debate about environmental law is circumscribed by the pervasiveness of market language in our culture.(3) Consequently, those who wish to extend social protection to the environment are placed on the defensive. Environmentalists are threatening prevailing thought and practices.(4) No one, for example, proposes an expansion of environmental protection in a market culture without expecting to hear defenses of existing property rights and claims of economic harm to existing businesses. Debate proceeds along a well-worn path.(5) Having been on the path before, participants do not listen closely to the proposal at hand. Hence, proposals get typecast as affronts to or friends of market processes before being judged on their merits.

Communitarianism offers one possible way of speaking about policy proposals that might sound both fresh enough to heighten listening skills when environmental laws are suggested, as well as tantalizing enough to attract new coalitions for environmental legislation.(6) Communitarians share a quest for the moral, legal, and intellectual criteria that balance concerns for our common good and for autonomy.(7) At first glance, this claim appears to be double-talk. How can we pursue a goal that incorporates two values, each prima facie the antagonist of the other? The key is balance, an extremely significant concept in a Congress that is labeled “do-nothing”(8) and “gridlocked,”(9) and that is characterized as rife with “institutionalized partisanship.”(10) Perhaps such a group in a divided country has much to gain by studying those who are interested in intermediary points between social forces and the individual, between community and autonomy, and between individual rights and social responsibilities.(11)

Communitarianism, like any general policy perspective, can be understood, at least in part, by its chosen foes. The most vigorous communitarian criticism arises in neoclassical economics that restricts attention to both the communitarian vision and environmental protection.(12) The reflexive admiration for market solutions that flows quite logically from neoclassical economics is derived from a form of individualism that is deadly to both communitarianism and often environmental protection. Market thinking, as the next section will suggest, reinforces the social myopia that wrecks both social relations and our resources.(13) The tendency to commodify and monetize variables works against the empathy and intergenerational justice that motivate advocates of both communitarianism and greater environmental protection.

No one denies the power and importance of our egos. At times, it appears that little else guides us. But communitarians virtually shout that we are more than just a series of egos. They argue that much of our behavior is–and should be–guided by an informal network of social bonds and the moral voice of the community.(14) In short, communitarianism is fundamentally reactive against the cultural hegemony of individualism, and thus represents a social movement aimed at shoring up the associative portrayal of the human experience.(15)

In their Responsive Communitarian Platform, supporters of communitarianism provide a justification for their position that the exclusive pursuit of individual private interests erodes the network of social environments on which we all depend and is destructive to our shared experience in democratic self-government.(16) This rebuke of individualism places communitarians in direct conflict with a major intellectual force in contemporary life: the free market. Economists have been quick to rush forward with economistic arguments explaining why markets are the optimal method for allocating and distributing resources. Communitarians have been aggressive in articulating a critique of this claim.

They argue that neoclassical economics offers an inadequate explanation of social welfare in a number of important respects. First, it is based on a conception of humans as “rational profit maximizers,” but, in fact, there are times when humans do not act in such a fashion. They sometimes choose to do things that they know are not in their best interests.(17) At other times, they rely on heuristic devices that cause them to misunderstand probabilities and facts, and consequently they behave “irrationally.”(18)

Another major inadequacy in neoclassical economics is its unwillingness to explore the source and implications of consumer preferences. Economists urge respect for revealed preferences while ignoring the manner in which those preferences are manufactured. Consider, for example, the contemporary popularity of Furbies. Is it the case that people desire them, or that powerful interests can teach people with abundant purchasing power that they need a few more toys?

A closely related problem is the contextuality of preferences.(19) One may make very different choices in the role of consumer than one would in a role as citizen.(20) For example, I might not be willing to pay any more as a consumer to buy vegetables that are grown without the use of pesticides, yet I might be willing to vote for a law to prohibit the use of pesticides on certain crops. Our preferences are more complex than revealed preferences presume. The conflict between sensate pleasure and our inclination to contribute to the construction of a better society pervades our behavior.

In this regard, communitarians recognize that individual choice is affected by a number of factors, including social norms, social meanings, and social roles. We may make a choice not just because of the intrinsic value of that option, but because of the reputational benefit or cost of the choice and because of the impact that choice may have on our self-concept.(21) Communitarians not only recognize the role of these social norms in influencing choice, but are willing to attempt to influence the development of certain social norms to promote human well-being.

Another important factor affecting choice is the well-documented “endowment effect,” that is, the idea that a person’s perception of the value of a good is often influenced by its initial allocation.(22) This effect can be seen in the case of environmental goods. Studies have demonstrated that people would demand up to five times as much money to allow the destruction of trees in a park than they would pay to prevent the trees’ destruction.(23) This behavior illustrates that grants of property rights and the sense of ownership that goes with those initial grants have their own power over our expressed preferences. Not only do we want certain things, but we struggle to preserve those things with an intensity that goes far beyond the desire we possess for the good itself. Our sense of social equity is aroused by the taking of something that we have designated as ours already.

Another problem with market logic recognized by communitarians is that markets assume that all goods are commensurable, that is, that all goods can be measured by the same metric-dollars. But there has never been a universal medium of exchange. The idea of a market for justice, friends, or grandmothers is repugnant to us. But why? We say that such things just should not be for sale. Carrots, yes, but not friends! Some analysts have recognized incommensurability by proposing the concept of blocked exchanges–the idea that certain goods simply cannot be distributed through the market.(24)

These kinds of market critiques might cause listeners to think that communitarians are market opponents. That claim is true only in a limited, but nevertheless significant, sense. Communitarians urge a political debate much broader than one between market advocates and market foes. Communitarians view the world that such a debate presupposes–a world where there are individuals, the state, and markets–as an inadequate picture of the world.(25) It is inadequate because it is missing what the contemporary philosopher Jurgen Habermas calls the lifeworld, the place where we “communicate with others, deliberate, come to agreements about standards and norms, pursue in common an effort to create a valuable form of life–in short, the lifeworld is the world of community.”(26) A community is found where there is a group with a shared concern about what will make the group a good group.

Communitarians believe that both the market and the state have a role to play in serving the good of the community. They believe that politics and morality cannot be separated, because what is at the heart of the democratic community is searching for the common good, and finding the best ways to use the state and the market to attain that good.(27) Communitarians tout dialogue and social participation as methods for discovering the good.

This search for the common good will stress certain values, according to Robert Bellah,(28) one of the early members of the “new communitarians.”(29) First, communitarians value the sacredness of the individual, but it is not the same individual that individualism recognizes

One of the champions of this more participatory community has been Britain’s Prime Minister, Tony Blair. He recently described his views as the “Third Way,” the route to renewal and success for modern social democracy. He described it as taking the values of the center and center-left and applying them to a world of fundamental social and economic change in a manner free from outdated ideology.(33) The theme of his comments was the deep need of the polity for human relationships that are both nurturing and sustaining.

Some may fear that communitarianism could become a tyrannical majoritarian rule at the expense of individuals’ rights. Communitarians, however, respond that the Constitution, especially the Bill of Rights, protects individual liberty. Furthermore, the Constitution does not talk just about rights, but also speaks of the need to promote the general welfare in order to form a more perfect union.(34)

What environmentalists should find particularly attractive in communitarianism is the claim that human identity is formed by the communities into which it is born.(35) Communities are logically prior to our moral personalities: as moral selves, we are members first and individuals second.(36) Ethics then emerge from the community, rather than from the autonomous individual of market logic.

To prevent abuse of these collectivist-sounding sentiments, Etzioni has formulated four principles that communities should follow. First, no state action should be taken unless there is a clear and present danger.(37) Of course, what constitutes a clear and present danger is subject to debate, but the role of the community would be to determine, through an examination of the evidence and extensive debate, whether there was in fact a substantial enough threat to the common good that necessitated action.

The second criterion is that state action is a residual. It is called for when there is no alternative way to proceed.(38) Third, public policy adjustments should be as limited as possible. In other words, we must look for the least-intrusive options.(39) Finally, we must take advantages of opportunities to minimize, avoid, or treat any negative consequences that might result from the policy.(40) These principles, while not optimal social principles from an environmentalist perspective, are nevertheless based on themes that environmentalists can tolerate.


The spokespersons for market logic are mainstream economists.(41) Their textbooks contain little more than a complex, logical defense of market prices, market wages, and market preferences, as well as those costs and benefits articulated by markets.(42) Mainstream economists believe that private exchange through the market is the best (most efficient)(43) vehicle for allocation and distribution. Consequently, they tend to oppose “reform” of existing property relationships by governmental action. They tend to see little reason in the area of environmental policy, or in any other area of social policy, for “remedying” what is not broken.

To arrive at this reactionary position, mainstream economic thought makes certain assumptions about the market,(44) assumptions on which the logic depends. First, consumers are assumed to be sovereign

Second, mainstream economists assume that the initial income and wealth distribution is fair. Economists argue that income and wealth are distributed according to the market value of each person’s chosen level of output. Therefore, if you work hard and produce a lot of output, you will obtain greater levels of income and wealth. Furthermore, the market is non-discriminating and impersonal. Consequently, this distribution is fair. Supply and demand curves are predicated on this distribution.

Finally, markets are assumed to be perfectly competitive. Firms face no barriers to entry or exit.(53) Furthermore, many small firms compete in the marketplace. As long as these three assumptions are met, the perfect market functions. Thus, there is no need for government regulation, and consumers can enjoy the various benefits associated with the market.(54)

The first benefit is that consumers, rather than producers or the government, define the quality and value of products and services.(55) Second, producers are responsive to consumers.(56) Sales are dependent upon consumer demand. Rational consumers reward producers by purchasing their products. Third, the market is self-correcting.(57) New producers may enter the market at any time if consumers’ needs are not met. Fourth, producers have a constant motivation to excel. Because producers must compete with each other, they have motivation to produce better products at lower costs. Fifth, the market provides efficient allocation of society’s resources.(58) More resources will flow to producers of more valued products. Finally, markets allow consumers freedom of choice.(59) Consumers are free to pick from all products offered. No coercion is involved.

However, the aforementioned benefits occur only when all assumptions of the market are met. Scholars have questioned the validity of these assumptions.(60) For example, the idea that consumers are rational calculators has been greatly criticized.(61) Furthermore, instances of discrimination suggest that the market is not impersonal.(62) If one or more of these assumptions are violated, a market failure occurs.(63) If a market failure occurs, consumers no longer have the power

This perspective of the role of the government directly conflicts with the kind of democratic political thinking on which environmentalism depends. In fact, this political thinking differs in many ways from economic thinking, and we will now examine those differences.(76) First, market and political thought differ in their respective units of analysis. While the individual is the hero in market thought, the community is the focus in political thought.(77) Second, instead of emphasizing the self-interest of individuals (as is emphasized in market thought), democratic political thought emphasizes public interest.(78) A discussion of self-interest and public interest leads to the commons problem, situations where self-interest conflicts with public interest.(79) A third conflict between market and political thinking is the respective emphasis on the commons problem. In the market, commons problems are the exception

Market and political thinking emphasize different elements involved in decision-making. Mainstream economists claim that preferences are given

Therefore, market and political thinking provide conflicting theories of decision-making. Clearly, in political thinking, an individual is not a rational calculator. Market and political thinking also offer differing theories regarding nature of activity and sources of change. While the market heralds the importance of competition, the polis integrates competition and cooperation.(85) Furthermore, in the market, change occurs through material exchange.(86) In contrast, change occurs in the political process through ideas and alliances.(87) In summary, market and political thinking conflict in numerous ways. Generally, Americans see politics as dirty and applaud the “rationality” associated with market thinking.(88) However, criticisms of the market demonstrate that market rationality is not as pure as it is believed to be. Market arguments are, nevertheless, often heralded as solutions to societal problems. In fact, some environmentalists have been urging market solutions to environmental problems.(89) Given the enumerated criticisms of the market, perhaps we should not be so eager to adopt market solutions.

Who is most likely to favor market solutions? Economists usually are the spokespersons for market rhetoric.(90) They tend to be advocates of a particular kind of liberty– negative freedom

According to Albert O. Hirschman, those receptive to mainstream economics typically make three types of arguments against “progressive” policies.(93) First, they suggest the perversity thesis which states that, because of unintended consequences,(94) any proposed action to improve a condition will result in a worsening of that condition.(95) Not only will a movement or policy fall short of its goal, but rather “the attempt to push society in a certain direction will result in its moving all right, but in the opposite direction.”(96) The perversity thesis is related to the idea of the self-regulating market

The second standard reactionary argument is the futility thesis, which states that attempts to change certain conditions will only change the surface, and the structures underlying the condition will remain untouched.(100) Consequently, those opposing public policy proposals question the amount of change likely to occur from the proposed change. Use of this argument has been somewhat limited because it negates the perversity thesis.(101)

The third argument that Hirschman describes is the jeopardy thesis which states that a proposed change will harm old progress for the sake of new progress.(102) The proposed action will be making a change, but that change will worsen a problem that has been improved in the past. Hirschman suggests that the jeopardy thesis can be used in argument as soon as an action is proposed while typically the perversity thesis is invoked after some type of unhappy experience occurs with the proposed action.(103)

What arguments will advocates for political solutions make? Hirschman suggests two. First, they “are excessively confident that all reforms are mutually supportive through what they like to call the principle of synergy.”(104) Thus, they are often too optimistic that reforms will work together to improve problems. Second, progressive voices have a tendency to use the imminent danger thesis, the idea that policy is “imperatively needed to stave off some threatening disaster.”(105)

Why do defenders of the market so typically present arguments against proposed action for change and seek to retain the status quo? Perhaps John Kenneth Galbraith’s characterization of the right-wing believers as the “culture of contentment” can shed some light on the question.(106) Galbraith suggests four characterizations of those in the culture of contentment.(107) Most importantly, short-run public inaction is favored over long-run protective action.(108) This preference for inaction, an attempt to retain current status, seems highly related to a reluctance to support proposed left-wing actions. The contented culture wants to avoid expenditures that will cost them but will benefit future generations. They are strongly committed to laissez faire.(109) Therefore, when proposals are made that involve government action, they typically argue against that proposal, citing the evils of the government.(110) They offer arguments to retain the status quo.

In response, proponents of environmental reform stress the failure of market processes to solve significant environmental problems. Their solution traditionally involves more expenditures of tax money to do something that market forces have not achieved or to repair some social failing caused by market forces.(111) No one is surprised by any of these arguments. As a result, many environmental law proposals are dead at birth. The next section provides specific illustrations of this general problem.


CERCLA (Superfund)

The Industrial Revolution spurred growth of thousands of businesses. Unfortunately, for hundreds of years their actions went unmonitored.(112) As a result, businesses disposed of their wastes, hazardous and otherwise, as cheaply as possible without regard for the consequences of doing so.(113) In their defense, many businesses were simply unaware of the environmental degradation caused by these hazardous substances.(114) Many business owners were not purposefully harming the environment, but just trying to make a profit as market logic urges them to do. As rational businesspeople, they were simply producing their products at the lowest possible cost. They dumped the hazardous contaminants in bodies of water or simply left them on the land where they were collected. Where the practice of disposing of substances was common and intense, serious environmental and health issues arose. In response to mounting concern over these sites.(115) Congress passed The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)(116) on December 11, 1980, to address the problem of abandoned or inactive waste disposal sites.

CERCLA defines “releases” and “hazardous substances,”(117) but, most importantly, it established the Superfund program,(118) which was to be used to clean up hazardous waste sites. CERCLA instructs the Environmental Protection Agency (EPA) to find these sites and ameliorate any potential health problems posed to the people of the respective communities. The Act sets forth basic approaches to cleanup: short-term efforts for those sites that require swift response and then long-term approaches that “permanently and significantly reduce the dangers associated with releases or threats of releases of hazardous substances that are serious, but not immediately life threatening.”(119) The long-term approach is used only when the site has been placed on the National Priorities List.(120)

Removal of hazardous wastes is not cheap.(121) So, a controversial aspect of CERCLA is, “Who will pay the cleanup costs?” Obviously, if the EPA designates a site owned by the party responsible for all of the waste, the answer is simple–that party would pay. However, this simple scenario is rarely, if ever, a reality. The EPA has taken a “clean first, collect later” approach to these sites. If the EPA cannot locate or determine the potentially responsible parties (PRPs), it takes monies from Superfund to clean up the site. Then the government pursues the dumpers, who are fined for their portion of the bill. This “seek-and-fine” process, however, is much easier described than done.

Although CERCLA clearly established the right of the EPA to collect fines from current business owners responsible for site pollution,(122) the legislation was more ambiguous when it came to who should finance the cleanup of abandoned waste sites. Consequently, this task was left up to the courts, which construed CERCLA to apply retroactively(123) through both strict and joint and several liability.(124) The courts’ interpretation means that polluters of abandoned sites can be located and forced to pay for their portion of the pollution and, in some cases, for pollution caused by others who cannot be located or who cannot be made to pay.(125) The retroactive application also allows the EPA to sue to recover cleanup costs from business owners who might have been acting legally(126) when they disposed of the hazardous material, even before passage of the Act.(127)

Because Congress did not establish a scientific methodology for allocating liability and because it placed only a few restrictions on the EPA’s authority to carry out the process,(128) conceivably, the EPA can identify a few large, wealthy PRPs and fine them for the whole cleanup amount.(129) Though this tactic may seem unfair to these businesses, it makes good financial sense for the EPA and for the taxpayers. It allows the EPA to reduce the transaction costs(130) associated with determining all potential polluters and expending money and resources in an effort to obtain reimbursement that it may never get from some of the smaller business owners.(131) However, the companies forced to pay up-front for the cleanup can then sue other PRPs to recoup some of their expenditures. As one might imagine, this process is costly and cumbersome for both the government and business owners. Consequently, it has been the stimulus for several proposals for Superfund reform.(132)

An examination of the arguments made over the last several years over how to reform the Superfund program reveals the contrast between a market-oriented approach and a democratic, political approach. Since 1995, Congress has been attempting to reauthorize and reform CERCLA. Two key issues of importance to many reformers are retroactive liability(133) and joint and several liability. An examination of the arguments surrounding the former will help us see the conflict between those who prefer political decision-making and those who prefer market decision-making.

CERCLA was passed in 1980, but the issue of retroactive liability was not raised until 1983, in the case of Browne v. Georgeoff.(134) While the judge in the case noted that the term “retroactive liability” was not explicitly used in the statute, he took into consideration other sections of CERCLA that supported the view that liability should be applied to preenactment conduct,(135) as well as the legislative history, and concluded that “[t]he congressional intent to make industry pay for the cleanup costs must be interpreted as an intent to authorize lawsuits which impose liability retroactively upon transporters.”(136) Subsequent case law reinforced this interpretation that CERCLA imposed retroactive liability on PRPs.(137) In 1996, however, in United States v. Olin,(138) District Court Judge Hand came to a conclusion that contradicted the case history of CERCLA when he ruled that liability under Section 106(a) of CERCLA was not retroactive.(139) The 11th Circuit Court of Appeals reversed.(140) The outcome of this decision made opponents of retroactive liability recognize that their best hope for eliminating this feature of the law was going to be through the legislative process. This conclusion probably makes sense given that courts in approximately twenty cases have concluded that liability under CERCLA is retroactive, and only the lower court in Olin(141) has held to the contrary.

The legislative push for the abolition of retroactive liability really began in 1995, with proposals in the House and the Senate, respectively, by Republican Representative Michael G. Oxley of Ohio(142) and Republican Senator Robert C. Smith.(143) The bills did not pass, and, in 1997, Representative Oxley modified his bill and reintroduced it as the Superfund Reform Act.(144) A key feature of the bill was to curtail retroactive liability.(145)

In this instance, market advocates are trying to use legislation to achieve their aims, but the aims are restorative. The legislation prods us to return to market forces. Retroactive liability is a concept based on resource allocation that violates the private exchange principles that led to the very problem that retroactive liability is designed to alleviate.

Those who favor the passage of legislation eliminating retroactive liability have a number of arguments to support their position. First, they argue the unfairness of holding someone liable for an action that was perfectly legal and good business at the time. Second, they argue that eliminating retroactive liability will free firms that are currently involved in lawsuits over past liabilities to focus on more important issues, such as product development and market share.

Those who wish to retain retroactive liability have a fairness argument of their own. They argue that a number of firms who are responsible citizens have already agreed to the imposition of retroactive liability and have cleaned up sites they contributed to in the past. To now let those firms who have fought retroactive liability off the hook would be to place the firms who were good citizens at a competitive disadvantage. This situation would certainly not be fair. It would also send a message to firms that it makes sense for them to dig their heels in and refuse to comply with the law because in the long run they might escape liability.

Proponents of retroactive liability also argue that easing up on liability standards for companies sends a strong message to polluters that they can easily shake the blame for pollution and environmental damage and simply let the federal government pay for the costs of cleaning up polluted sites.(146) They also point out that eliminating retroactive liability would come at a heavy cost to the taxpayers. The Congressional Budget Office reported that repealing retroactive liability would cost the federal government from $800 million to $1.3 billion each year.(147) That money would obviously have to come from the taxpayers.

Finally, advocates for the status quo argue that it is fairer to impose the costs on the firms who were responsible for the creation of the site because even though their behavior was legal at the time, they also made profits from that behavior–higher profits than they would have made if they had been properly disposing of the waste. So, because they were the ones who profited from the behavior, it is only fair that they pay the full costs of that behavior, not the taxpayers who did not benefit from the behavior. The current system is simply a rational measure that spreads the costs of environmental cleanup among those who benefited the most from environmental activities that created the current problems.(148)

What is deeply problematic about such arguments to a mainstream economist is that valuation forms other than the market are being used to claim that certain costs have occurred. When someone refers to the “full costs” of the behavior of firms who disposed of wastes, he or she is using political measuring rods to create those numbers. Either courts, legislators, or regulatory agencies have made those calculations. From the perspective of market mavens, the relevant costs were already paid when the private parties bargained for the product price. Those costs were established by the market mechanism and are the only cost calculations they trust.

Protection of Wetlands

Contrary to historical thought, wetlands are not just breeding havens for mosquitos.(149) According to the EPA, they are “areas where water covers the soil, or is present either at or near the surface of the soil all year or for varying periods of time during the year, including during the growing season.”(150) These areas are what most of us would refer to as swamps or bogs. More specifically, there are two types of wetlands: coastal and inland. The former is characterized by saltwater

Wetlands serve a vital role in the environmental scheme of earth health. They are home to thousands of plant and animal species, some of which are endangered. Clean water is something we all want, and wetlands dilute pollutants to keep our water safe for human consumption.(151) Yet despite their significant role, more than half of wetlands once in existence have been destroyed by human activity.(152) Unfortunately, every year more wetlands are lost to agricultural, commercial, and residential interests. Populations of people living in coastal counties are projected to grow from 110 to 127 million by 2010,(153) and, inevitably, the result of people’s presence is pollution of wetland areas.

To address the problem of diminishing wetlands, Congress has enacted several pieces of legislation aimed at preserving these areas. The primary wetland regulatory mechanism is Section 404 of the Clean Water Act (CWA).(154) As set forth in this Act, any landowner wanting to develop a wetland must file for a permit from the Army Corps of Engineers.(155) Failure to obtain a permit can result in both civil and criminal penalties.(156) Furthermore, before a permit will be approved, “the landowner must demonstrate that the activity satisfies the environmental criteria established by the EPA and that the activity is in the public interest.”(157) Often too, the landowner must mitigate(158) the adverse impacts on the wetland.

Because protecting wetlands is hardly ever in a landowner’s economic self-interest, another legislative effort aimed at protecting wetlands, the Food Security Act of 1985,(159) has a built-in incentive system to discourage agricultural development of wetlands. The Swampbuster provision,(160) as it is known, does not prohibit farmers from obtaining permits under Section 404. In fact, if a farmer receives approval from the Army Corps of Engineers, he or she may legally convert the wetland area. However, once the farmer converts the wetland “for the purpose, or to have the effect, of making the production of an agricultural commodity possible,”(161) under the Swampbuster provision, he or she cannot receive federal farm monies,(162) such as loans and price supports, unless the wetland is restored.(163) Not only is the farmer ineligible for funding for the converted land, but also for funding for any other land he or she farms.(164) Consequently, the Swampbuster provision is a potent mechanism for deterring the farming community from converting wetlands.(165)

The final piece of significant wetlands legislation is the Marine Protection, Research, and Sanctuaries Act(166) which empowers the National Oceanic and Atmospheric Administration to designate “marine sanctuaries,”(167) which are the equivalent of a wetlands national park.(168) Congress enacted this legislation after it determined that:

(1) this Nation historically has recognized the importance of protecting special areas of its public domain, but these efforts have been directed almost exclusively to land areas above the high-water mark

(2) certain areas of the marine environment possess conservation, recreational, ecological, historical, research, educational, or esthetic qualities which give them special national, and in some cases international, significance

(3) while the need to control the effects of particular activities has led to enactment of resource-specific legislation, these laws cannot in all cases provide a coordinated and comprehensive approach to the conservation and management of special areas of the marine environment

(4) a Federal program which identifies special areas of the marine environment will contribute positively to marine resources conservation, research, and management

(5) such a Federal program will also serve to enhance public awareness, understanding, appreciation, and wise use of the marine environment

(6) protection of these special areas can contribute to maintaining a natural assemblage of living resources for future generations.(169)

Designation as a marine sanctuary affords these wetlands areas certain protections in that “they are to have protective management of their recreational, ecological, historical, educational and aesthetic values.”(170)

Unfortunately, despite all the aforementioned protective legislation, destruction of wetlands continues. Effects of that degradation are unclear.(171)

As with most environmental protection endeavors, wetlands protection collides with a landowner’s property rights. Activists argue vehemently on both sides of the issues. Environmentalists assert that wetlands serve many irreplaceable functions, that wetlands are therefore a public good, and, as such, they must be protected by legislation. In addition to water cleansing and endangered species protection, wetland researcher Curtis J. Richardson proffers that wetlands also control and store flood waters, filter wastes through sediment control, garner nutrients from agricultural runoff, control erosion, and produce medicinal ingredients.(172)

Although appealing to humans’ self-interests is the most popular method of rhetoric on behalf of preserving wetlands, some green proponents also argue from a bioethical perspective. They contend that nature has intrinsic worth beyond its usefulness to humans, and we have no right to destroy nature.(173)

The intrinsic value of wetlands would be difficult to assess if wetlands protection programs were put to an economic cost/benefit analysis. Once we abandon market variables as reliable, both cost and benefit calculations become political outcomes. Unlike the benefits that make humans’ lives better, intrinsic worth does not even have a human accompaniment as a measuring tool. For example, the benefit of cleaner drinking water could be calculated by adding up an estimated amount of health care costs saved, birth defects prevented, etc. Even those figures are cumbersome to quantify (For example, how do you put a dollar amount on the lack of birth defects?), but at least an amount can be determined. The likely result would be that the value of intrinsic worth would be left out of a benefit calculation. Hence, a cost/benefit analysis would work against the environment, unless economists rethought their concept of cost/benefit so that it would not be restricted merely to market measures.

Property rights advocates might support cost/benefit analyses. They have already discovered one way to quantify their costs: declines in property values. They argue that restrictions on property use because of wetlands and other environmental protection measures are unconstitutional takings under the Fifth Amendment.(174) Whenever a person is unable to build on a portion of his or her property because it is a wetland, that property has in essence been taken from the owner. Because it is being taken by the government to benefit the public, the public should bear the costs.(175)

Recent debate over a proposed change in the permit process may help us see the conflict between the alternative approaches a little more clearly. As mentioned above, one of the most controversial aspects of wetland protection has been the Section 404 permit process. In setting up the permit process, Congress recognized that there were some low-impact activities that take place in wetlands that have virtually no effect on them, so a provision was included in the CWA that allows the Corps to issue “general permits” that speed approval by eliminating government review and the opportunity for public comment on the proposed activity. These permits can apply to only a distinct category of activities, and each permit can allow no more than minimal individual and cumulative impacts on the environment.(176) One of these general permits, Nationwide Permit 26 (NWP 26), allowed the destruction of up to three acres of isolated wetlands and headwater at a time, as long as the minimal impact requirement was met.(177)

On July 1, 1998, the Army Corps of Engineers proposed what some described as a major expansion of “quick build” permits. The new “quickie permits” would allow up to three acres of non-tidal wetlands to be developed or farmed, and up to ten acres of any non-tidal wetlands to be destroyed as part of a “master planned development.” In some cases, a builder would not have to notify the Corps at all. The traditional requirements that wetlands be avoided where possible would not apply, and no public input would be provided under the new process.(178)

Proponents of the change heralded it as returning to property owners their right to control their property because it broadens the number of instances in which the quick permitting process would be applicable.(179) It makes it much easier for property owners to develop their land and, thus, spurs economic growth.

Opponents argue that the proposal is designed to further the goal of administrative expediency, not environmental protection.(180) They further argued that the proposal would exclude the public from most wetlands permit decisions, and that public oversight is crucial when we are looking at the potentially damaging activities that would be covered, such as strip mall construction, airport runway expansion, and mining.(181) Finally, they argued that the proposal could facilitate urban sprawl, with the consequent massive destruction of wetlands and other aquatic habitats.(182)

Protection of Endangered Species

The controversial Endangered Species Act (ESA) has been the subject of a number of polls. In 1991, Peter Hart and Robert Teeter, polling jointly for NBC News and the Wall Street Journal, asked the following question: “Recently there has been a controversy in the Northwest over whether to protect the spotted owl, an endangered species, which would result in the loss of jobs in the area. In general, which do you think is more important?”(183) Fifty-one percent of the respondents said that in general it was more important to protect jobs, whereas thirty-four percent preferred to protect species.(184) In a poll conducted by Peter D. Hart Research Associates in December of 1994, however, fifty-seven percent of respondents favored maintaining strong requirements in the ESA,(185) while thirty-two percent favored relaxing standards.(186) This divided opinion haunts legislative discourse about the ESA, as well as environmental law in general.

The ESA has important historical roots. The Industrial Revolution gave birth to the growth of capitalism and spawned incredible wealth. However, this explosion of industry did not come without costs. Throughout the New World, buildings were being erected where before there were only nature and wildlife.(187) So the issue arose, “What was to become of those animals whose homes were being destroyed?”

Congress responded with the passage of the ESA in 1973.(188) The government determined the preservation of animal species to be of “esthetic, ecological, educational, historical, recreational, and scientific value to the Nation and its people.”(189) Specifically, Congress stated that:

(1) Various species of fish, wildlife, and plants in the United States have been rendered extinct as a consequence of economic growth and development untempered by adequate concern and conservation

(2) Other species offish, wildlife, and plants have been so depleted in numbers that they are in danger of or threatened with extinction.(190)

Pursuant to the preclusion of further destruction, the Act established a method for determining which animals were to be listed and set forth how plans were to be constructed to preclude extinction.(191) Foremost, Congress codified the necessary conditions for an animal to be classified as “endangered” or “threatened.”(192) An “endangered” species is one “in danger of extinction throughout all or a significant part of its range,”(193) while a “threatened” species is one that is being destroyed at such a rate that it is likely to become endangered in the foreseeable future.(194) Procedurally, once a species is proposed to fall into one of these categories, the agency must engage in the rulemaking procedures established in the Administrative Procedure Act (APA).(195) Either the Secretary of the Interior or the Secretary of Commerce will make the final determination on the species’ classification.(196)

The appropriate Secretary must consider only the following criterion in making his or her determination: “(1) The present or threatened destruction, modification, or curtailment of its range and habitat

Moreover, the species is not only afforded protection, but Congress also directed the Secretary to develop a “recovery plan” for each endangered or threatened species to prevent the species from extinction or further eradication.(204) In general, a recovery plan includes the status of the species when designated, factors that pose a threat to the species, actions that would shelter the species from known threats, and explication of how protective actions should be performed.(205) Furthermore, the Secretary must formulate objective, measurable criteria that when met would allow for the species to be removed from the list.

Opinions of the ESA’s efficacy vary, and those conflicting opinions are reflected in the numerous reauthorization and reform bills proposed since the ESA expired in 1993.(206) When we examine approaches to the reauthorization of the Act, we can see once again a difference between those who have a market orientation and those who take a democratic, political approach. The latter want to strengthen the Act

From the perspective of those who want to preserve and strengthen the ESA, a variety of species is a collective good. Its benefits do not fall to only the person on whose property they reside. Our entire society benefits from maintaining biodiversity. For example, a large number of the medicines used to fight disease come from plants and animals.(207)

Their value extends even further. Scientists may use plants and animals as scientific models. Because those species that are alive today have survived both natural disasters as well as human development, they are remarkably adaptable. Michigan Representative John Dingell stated:

Living plants and animals have, through the centuries, developed a means of

coping with disease, drought, predation and a myriad of other threats.

Understanding how they do so enables us to improve the pest and drought

resistance of our crops, discover new medicines for the conquest of disease

and make other advances vital to our welfare. Living wild species are like

a library of books still unread. Our heedless destruction of them is akin

to burning that library without ever having read its books.(208)

Another way in which endangered species more closely resemble public goods than private goods is that supporters of biodiversity suffer from asymmetric information. First, there is a lack of information about what is lost when an endangered species becomes extinct (and many of the potential losses are beyond monetary value). Therefore, the costs of failing to maintain biodiversity are impossible to calculate with any degree of certainty.

Second, nobody knows what the future holds for endangered species. Nature is unpredictable and events such as droughts, blizzards, or floods may ravage an area that is home to a population of an endangered species. If endangered species are given only weak protection, such natural disasters could result in the extinction of an entire species.

If we wish to offer endangered species the best protection possible, we must turn to a collectivist approach. The social benefits of endangered species would not be adequately expressed through the price signals of the market.(209) The net result would be that endangered species would be offered not only less protection than society as a whole desires, but also less protection than what would be most beneficial to society.

Those who are opposed to strengthening the ESA are concerned that we are putting animals’ rights above human rights, especially the human right to own property. Property rights advocates are concerned that individual property owners are having their land “taken” by the government in order to effectuate national policies intended to have a collective benefit. They argue that if the collective good is to be promoted through such restrictions, the cost of those restrictions ought to be underwritten by general tax revenue. As one conservative Senator stated:

It is bad policy to require the American people to sacrifice their

constitutionally protected rights for any federal program–even [the ESA].

I would like to see S. 1180 strengthen and protect the Fifth Amendment

right to compensation. I will vote for amendments and/or legislation that

strengthens our citizen’s [sic] private property rights.(210)

One area of contention among those looking at the reauthorization of the ESA involves the use of Habitat Conservation Plans (HCPs) and “no surprises” clauses. HCPs are agreements between the government and a private landowner to allow the private landowner an exemption from ESA’s Section 9 prohibition against takings(211) as long as he or she agrees to undertake some measure to mitigate damage to the endangered species, such as the preservation of an area of land for the species. Under the “no surprises” clause that has been proposed in a number of the reauthorization bills, once the HCP has been approved by the Secretary of the Interior, the landowner is protected from any further restrictions on the use of his or her land.(212)

The inclusion of HCPs that contain “no surprises” clauses is seen by many as an ideal compromise. These agreements allow species to be protected, yet give the landowner the security to which he or she is entitled. The landowner now has an incentive to try to protect endangered species, but species protection is the price he or she pays for security.

Senator Kempthorne was speaking for a number of people when he offered his justification for incorporating the “no surprise” clause into his 1997 proposal for reauthorization. He said that this policy was included to “giv[e] landowners certainty that their obligations will be defined by the [conservation plan into which they enter].”(213)

A number of concerns have been raised with respect to HCPs, especially when they include a “no surprises” provision. These plans are privately negotiated agreements, without any public input and, some say, without adequate scientific guidance. Thus, there is at least the potential for these agreements to be habitat giveaways that contribute to, rather than alleviate, dangers to threatened and endangered species and their habitats.(214)

Senator Barbara Boxer, when speaking before the Senate about her concerns over the “no surprises” provision included in the 1997 Kempthorne Bill stated that,

“No surprises” is particularly troubling given the fact that HCP Agreements

cover not only listed species for which we would have sound scientific

data, but also candidate and other unlisted species for which we may have

little scientific information…. In S1180 HCPs have neither a clear

recovery standard nor assured funding. “No surprises” could therefore spell

disaster in cases where an HCP hurts species recovery, is nonfunctional, or

is rendered inadequate given new science.(215)

Even if a species that occupied property owned by the signatory to an HCP teetered on the brink of extinction, the government could not require the property owner to undertake additional measures outside the original conservation plan in order to ensure survival of the species. Furthermore, if a previously unlisted species residing on the landowner’s property subsequently became listed, the landowner again would be exempt from having to do anything to protect that species. While these provisions certainly do give security to the property owner, they leave the species at great risk.


Changes in environmental law develop in a cultural context that embraces particular linguistic patterns. Arguments that would be powerfully persuasive in one locale brand one as an outsider elsewhere. Those who wish to effectuate change in American environmental law, for example, must make their peace with the pervasive embrace of individualism(216) in the culture with the consequent devotion to market solutions.(217)

Individualism is characterized by the elevation of the individual’s interests over the interests of the collective. Individualists downplay their ties to others, viewing themselves as essentially atomistic.(218) Consequently, individualism holds that “each individual is the controlling factor in shaping personal destiny.”(219) From such a viewpoint, a social concern for toxic wastes, wetland preservation, or endangered species should be expressed in market behavior. Individual choice is the only voice that deserves respect from the market perspective.

A community from this perspective is an aggregation of egos. Social wisdom emerges from the nurturing of the virtues associated with the individualistic worldview. To speak of a community as an organic endeavor is a mistake from this perspective. Hence, language of unification and communal responsibility, such as claims that it takes a whole village to accomplish a goal, is seen as misguided in that it detracts from personal responsibility and, thereby, weakens social character.

Yet, as market rhetoric is commonly used, its protective attitude toward the existing distribution of property rights is an impediment to environmental protection. Communitarianism offers a green space for environmental conversation, a friendly forum that shows at least some deference to the personal responsibility motif that fuels objection to so many new environmental initiatives. Communitarian rhetoric clearly offers no panacea

(1) 1998 Overview: Legislatively, Not a Bad Year for Business, 19 JUD./LEGIS. WATCH REP. 4 (Dec. 1998).

(2) See GEORGE MYERSON, RHETORIC, REASON, AND SOCIETY (1994) (providing convincing portrayal of power of language to guide and restrain thought and discourse emerging from it).

(3) See ROBERT KUTTNER, EVERYTHING FOR SALE: THE VIRTUES AND LIMITS OF MARKETS (1997) (discussing extent of market thinking and its deleterious impact on public debate)

(4) KARL MANNHEIM, IDEOLOGY AND UTOPIA: AN INTRODUCTION TO THE SOCIOLOGY OF KNOWLEDGE (1951) (calling environmentalism in a market culture, a “utopian” idea, one that threatens status quo and consequently can expect wrath of those who benefit from or are comfortable with that status quo).

(5) See Christopher Schroeder, Cool Analysis versus Moral Outrage in the Development of Federal Criminal Law, 35 WM. & MARY L. REV. 251 (1993). Schroeder argues that there are two competing approaches with respect to disputes over development of environmental standards: cool analysis and moral outrage. Cool analysis is based on the assumption that the main desire of most individuals is to improve their personal welfare, so they make their choices with that end in mind. It is also based on the assumption that environmental values influence human desires in exactly the way other welfare-affecting values do. Thus, one will trade off environmental values against other values when to do so will increase one’s welfare. Id. at 253. From the perspective of cool analysis, then, the role of government should be to formulate environmental policies that achieve the most welfare-enhancing mix of environmental protection and competing goods. One good tool for determining this mix is cost-benefit analysis. Id.

Those who share the moral outrage perspective believe that people are not only concerned about their own welfare, but make independent commitments to values that do not necessarily enhance their own personal welfare. They will sometimes make choices that further these values at the expense of their own welfare. They further believe that environmental values are among these “special” values that people are sometimes willing to further. Id. Consequently, they believe that these values must be taken into account prior to engaging in any sort of cost-benefit analysis. Id.

Those who advocate the dominant market-oriented approach would clearly feel more at home with those who prefer the cool analysis than those who share the assumptions of the moral outrage perspective.

(6) This attempt to find a middle ground of sorts between autonomy and community is based on the same perceived danger of extreme modes of discourse that activates the approach of David B. Spence in Paradox Lost: Morality, and the Foundations of Environmental Law in the 21st Century, 20 COLUM. J. ENVTL. L. 145 (1995). Spence traces the influence of both the logic of economic analysis and the moral analysis of environmentalists and finds them to be substantive, productive influences on environmental policy. His conclusion is that the gains of environmental law may be lost if partisans of the two approaches remain unwilling to recognize the contributions of the others to sound environmental policy.


(8) J. Scott Orr, New Congress Will Face Substantial Obstacles to Passing Legislation, PORTLAND OREGONIAN, Jan. 6, 1999, at 9B.

(9) John J. Goodman, Chafee to Lead Effort for Bipartisan Managed Health Care Reform, Jan. 8,1998 (press release).

(10) J. Scott Orr, A Centrist Agenda Could Give Congress A Way Out of Gridlock, CLEVELAND PLAIN DEALER, Jan. 6, 1999, at 9B.

(11) See ETZIONI, supra note 7, at x. Communitarians have coined the phrase “responsive community” to indicate their concern with the social obligations of individuals as well as their rights. Id. at xi.

(12) Neoclassical economics has critics inside the economics profession who, although they are not explicitly linked to communitarian political theory, are nevertheless displeased with the lack of regard in mainstream economics for what Arendt calls “politics.” See HANNA F. PITKIN, THE ATTACK OF THE BLOB: HANNAH ARENDT’S CONCEPT OF THE `SOCIAL’ (1998). According to these critics, neoclassical economics denigrates the relational aspects of our behavior.

Especially significant is the critique of neoclassical principles by Amartya Sen, the most recent winner of the Nobel Prize in economics. Sen has presented a vigorous critique of economic rationality as blind to the social construction of property rights. See Amartya Sen, Rationality, Interest, and Identity, in DEVELOPMENT, DEMOCRACY, AND THE ART OF TRESPASSING 343-53 (Alexandra Foxley, et al. eds., 1986). Sen provides a framework that environmentalists can comfortably borrow. He highlights two departures from egoism: sympathy and commitment. The former corresponds to those instances where concern for others directly affects one’s personal welfare. The second refers to those instances where one chooses to act in such a way as to benefit the community despite the perception that such action will be personally harmful. “Commitment” is especially useful for either communitarians or environmentalists because it permits one to have second order preferences that trump the first order preferences on which neoclassical economics is based. Amartya Sen, Rational Fools: A Critique of the Behavioral Foundations of Economic Theory, 6 PHIL. & PUB. AFFAIRS 317-44 (1977).

The market mechanism confines its attention only to issues of congruence between the interests of various people, while ignoring those aspects of decision-making where interests conflict, as they surely do in environmental policy. Amartya Sen, The Profit Motive, LLOYD’S BANK REVIEW 6 (1983). By ignoring clashing interests, neoclassical economists can present a portrayal of resource allocation that appears to dodge the ethical discourse required to resolve conflicting property rights. AMARTYA SEN, ON ETHICS AND ECONOMICS (1987).

Numerous other economists have also presented devastating critiques of economic rationality. They remind neoclassical economists of the short-term and delimited nature of preferences recorded in market demand curves. See J. Kevin Quinn, A Rhetorical Conception of Practical Rationality, 30 J. ECON. ISSUES 1127-42 (1996)

(13) See STEPHEN KELMAN, WHAT PRICE INCENTIVES? ECONOMISTS AND THE ENVIRONMENT (1981) (exploring the impact of repeated exposure to certain values and not others). Kelman points out that the persistent discussion of efficiency among neoclassical economists encourages blindness towards the equity impacts of environmental policies that rely on price incentives for enforcement. Kelman sees such incentives as endorsing the self-interested behavioral assumptions on which loyalty to market processes is based. The use of price incentives treats the motives of polluters with indifference and permits those who are financially comfortable a legitimate avenue for shifting the burden of environmental problems onto those who are less able to pay to escape the burden. Id.

(14) See id. at xii.


(16) See id. at xxv.


(18) See id.

(19) See id. Preferences are not abstractions. Except for certain basic human needs, preferences are constructed. They emerge as a result of complex webs of social interaction. Yet, markets, as they are discussed in mainstream economics, are not meant to be forums for desires represented by demand curves. Instead, preferences are assumed to exist prior to and apart from market activity. Their quality is unassailable. ELIZABETH ANDERSON, VALUE IN ETHICS AND ECONOMICS 146 (1993). For an outstanding survey of the implications of assuming that preferences are endogenous, see Samuel Bowles, Endogenous Preferences: The Cultural Consequences of Markets and other Economic Institutions 36 J. ECON. LIT. 75-111 (1998).

(20) See SUNSTEIN, supra note 17, at 20.

(21) See id. at 36-39.

(22) See id. at 52-53.

(23) See id.

(24) See MICHAEL WALZER, SPHERES OF JUSTICE (1983). Walzer lists the set of blocked exchanges in the United States today: human beings

(25) See Robert N. Bellah, Community Properly Understood: A Defense of Democratic Communitarianism, in THE ESSENTIAL COMMUNITARIAN READER 15-19 (Amitai Etzioni ed., 1998).

(26) Id. at 17.

(27) Id. at 18.

(28) Id. at 17-18. Communitarianism, as a philosophy, traces its roots back to a group of philosophers–Charles Taylor, Michael J. Sandel, and Michael Walzer–who challenged the liberal opposition to the concept of the common good. All three, however, have expressed a lack of comfort with the label “communitarian.” That label, however, was embraced by a group of scholars in the late 1990s, who are sometimes referred to as the “new communitarians.”

(29) Id.

(30) Id.

(31) Id.

(32) Id.

(33) Tony Blair, A Third Way to Achieve Modern Social Democracy, HERALD INT’L TRIB., Sept. 28, 1998, at 10 (noting that old ideology had created false dilemma between public and private sectors). Blair said that his government’s approach under this third way was neither laissez faire nor one of state interference. Critical to this third way is education and attaining a balance between rights and duties. He saw it as a restoration of faith in politics and a new alliance between progress and justice. Id.

(34) ETZIONI, supra note 15, at 50.

(35) David Luban, Book Review, The Legal Ethics of Radical Communitarianism, 60 TENN. L. REV. 589, 589 (1993) (reviewing THOMAS L. SHAFFER & MARY M. SHAFFER, THE LEGAL ETHICS OF RADICAL COMMUNITARIANISM (1991)).

(36) Id. at 590

(37) ETZIONI, supra note 15, at 177.

(38) Id. at 180-81.

(39) Id. at 181.

(40) Id. at 189-90.

(41) Economists are not all uniform. Environmental activists have allies within the economics community, despite the overwhelming predominance of neoclassical thought. Among those who support an economics more friendly to environmental protection are those who ridicule the current measures of economic progress as measures of total wellbeing. See HERMAN DALY, STEADY-STATE ECONOMICS (1991). John Miller, The Wrong Shade of Green: Orthodox Economics Put Profit before Sustainability, 185 DOLLARS AND SENSE 6-9 (1993), argues that “a country could deplete its petroleum reserves, destroy its forests, and erode its soil … before its national accounts even recognized the problem.”

Dissident voices within the discipline also are critical of the mainstream’s valorization of growth. A past president of the American Economics Association, Kenneth Boulding, asserted that “anyone who believes that exponential growth can go on forever is either a madman or an economist.” JOHN DRYZEK, RATIONAL ECOLOGY: ENVIRONMENT AND POLITICAL ECONOMY 73 (1987).

Moreover, the mainstream’s treatment of externalities has not been spared. See WILLIAM BAUMOL & WALLACE OATES, ECONOMICS, ENVIRONMENTAL POLICY AND THE QUALITY OF LIFE (1979) (arguing that externalities are not aberrations and in fact “are caused by a standard defect in free enterprise system”)

(42) See David George, The Rhetoric of Economic Texts, 24 J. ECON. ISSUES 861-78 (1990).

(43) Certain values are emphasized most by mainstream economists. They value efficiency, that is, getting the most from a given amount of inputs or resources, and negative freedom, defined as acting without restriction from rules imposed by others. However, mainstream economists try to argue that their discipline is value-free. They claim that when economists make decisions, they make those decisions based on facts, not values.

Understanding the value preferences of certain groups is important because those value preferences will influence policy formation. See, e.g., James A. Gross, The Kenneth M. Piper Lecture: The Broken Promises of the National Labor Relations Act and The Occupational Safety and Health Act: Conflicting Values and Conceptions of Rights and Justice, 73 CHI.-KENT. L. REV. 351, 372 (1998).

Every economic system has historical roots and embodies value judgments

about the individual person, law, private property, liberty, and the role

of government. A particular system and theory are chosen because they yield

policy implications compatible with some one’s or some group’s vision of

what should be in the world…. [Economists’] underlying value premises,

however, are at least as important as the extent of their empirical

knowledge of the real world or the validity of their mathematical analyses.


Not only should we recognize the values inherent in group beliefs, but we should also explicitly identify values in legal analysis. See, e.g., Caryn L. Beck-Dudley & Edward J. Conry, Legal Reasoning & Practical Reasonableness, 33 AM. BUS. L.J. 91 (1995) (concluding that natural law analysis is beneficial because, unlike positivism, it requires us to openly consider value conflicts.).


A market can be simply defined as a social system in which individuals

pursue their own welfare by exchanging things with others whenever trades

are mutually beneficial. Economists often begin their discussions of the

market by conjuring up the Robinson Crusoe society, where two people on a

lush tropical island swap coconuts and small game Animals. They trade to

make each person better off, but since each person always has the option of

producing everything for himself, trading is never an absolute necessity

for either one.


The theory of markets says that as long as exchanges meet these conditions

of being both voluntary and fully informed … they lead to the goal of

allocative efficiency: Resources always move in a direction that make

people better off. This is because exchanges are choices…. Since no one

would voluntarily exchange in a trade that made him or her worse off, and

people would engage in trades only when at least one side was made better

off, all voluntary exchanges must lead to situations where at least one

person is better off and no one is worse off…. [I]n the theory of

markets, voluntary exchanges transform resources into something more


Id. at 68

(45) In market thinking, the ultimate beneficiary of the economic process is the consumer. See M. NEIL BROWNE & JOHN H. HOAG, UNDERSTANDING ECONOMIC ANALYSIS 81 (1983).

[P]rices represent consumer signals to producers concerning how many

resources should be devoted to production of a particular good or service.

Prices also provide consumers with information concerning the availability

of resources for production. Consumer sovereignty refers to consumer

control over what is produced and the form the production will take.


(46) See DAVID COLANDER, MICROECONOMICS 241 (3d ed. 1998)

(47) See STONE, supra note 44, at 18.

In the market model, individuals act only to maximize their own

self-interest. Here `self-interest’ means their own welfare, however, they

define that for themselves. It does not mean that they act `selfishly’

their self-interest might include, for example, the well-being of their

family and friends. The competitive drive to maximize one’s own welfare

stimulates people to be very resourceful, creative, cleaver, and

productive, and ultimately raises the level of economic well-being of

society as a whole.


(48) The individual, the focus of economic thought, is assumed to be an isolated, self-interested, calculating maximizer of utility. Economists have offered the following name for the individual in the market: “Homo Economicus.” Rationality is emphasized most in mainstream economics.

(49) But see SUNSTEIN, supra note 17, at 5 (arguing that humans do not always act as rational profit maximizers). At times, people choose to do things they know are not in their best interests. At other times, they rely on heuristic devices that cause them to misunderstand probabilities and facts, and consequently they act irrationally. Id.

(50) Id.

(51) Id. at 20.

(52) Id. at 52-53.

(53) See COLANDER, supra note 46, at 242.

Barriers to entry are any things that prevent other firms from entering a

market. They might be legal barriers such as exist when firms acquire a

patent to produce a certain product. Barriers might be technological, such

as when the minimum efficient scale of production allows only one firm to

produce at the lowest average total cost. Or barriers might be created by

social forces, such as when bankers will lend only to certain types of

people and not to other types.


(54) See ELTON RAYACK, NOT SO FREE TO CHOOSE: THE POLITICAL ECONOMY OF MILTON FRIEDMAN AND RONALD REAGAN 11 (1987). Rayak describes Milton Friedman’s economic thinking, which is representative of mainstream economic thought.

[The] economic activity of literally millions of individuals and business

firms [will be coordinated] through “voluntary exchanges [in al free

enterprise exchange economy-competitive capitalism.” As long as freedom of

exchange is maintained, the consumer is protected from coercion by the

producer because of other consumers to whom he can sell and the employee is

protected from coercion by the employer because of other employers for whom

he can work, and so on. And the market does this impersonally and without

centralized authority.

Id. (citing Friedman).


(56) Id.

(57) Id.

(58) Id.

(59) Id.

(60) See, e.g., Nussbaum, supra note 44, at 1198. Nussbaum suggests that the law and economics movement has ignored philosophical criticisms of the foundations of mainstream neoclassical economics. For example, she presents philosophical criticisms of commensurability and well-being. Id. at 1198-1206

At least three such implications of sociology for the economic analysis of

law seem readily apparent. First, it would seem important to take account

of the fact that people are not always independent actors, but are members

of groups, and that such membership can sometimes affect their actions.

This fact seems particularly relevant in the analysis of the regulation of

group-based activity such as racial discrimination. Second, people are

inculcated with certain norms of cooperation, and these norms sometimes

dictate actions that are not purely self-interested. The acknowledgement of

such norms for cooperation may be important in the analysis of a wide

variety of legal issues including the doctrine of unconscionability, the

implied covenant of good faith and fair dealing, the duty to rescue,

welfare programs and the voting behavior of citizens, politicians and

judges. Finally, it is important to take account of the fact that the law

is not merely a pricing mechanism, but is sometimes intended to “socialize”

people and influence their preferences with respect to a particular


Id. at 419.

(61) See, e.g., Christine Jolls et al., A Behavioral Approach to Law and Economics, 50 STAN. L. REV. 1471, 1477-79 (1998) (discussing how individuals display bounded rationality, bounded willpower, and bounded self-interest).

Bounded rationality, an idea first introduced by Herbert Simon, refers to

the obvious fact that human cognitive abilities are not infinite. We have

limited computational skills and seriously flawed memories. People can

respond sensibly to these failings

sometimes respond rationally to their own cognitive limitations, minimizing

the sum of decision costs and error costs. [However,] human behavior

differs in systematic ways from that predicted by the standard economic

model of unbounded rationality.

Id. at 1477.

In addition to bounded rationality, people often display bounded willpower.

This term refers to the fact that human beings often take actions that they

know to be in conflict with their own long-term interests…. Finally, we

use the term bounded self-interest to refer to an important fact about the

utility function of most people: They care, or act as if they care, about

others, even strangers, in some circumstances. In many market and

bargaining settings, … people care about being treated fairly and want to

treat others fairly if those others are themselves behaving fairly. As a

result of these concerns, the agents in a behavioral economic model are

both nicer and (when they are not treated fairly) more spiteful than the

agents postulated by neoclassical theory.

Id. at 1479.

This questioning of rationality extends to the corporation. See, e.g., Michael B. Metzger & Dan R. Dalton, Seeing the Elephant: An Organizational Perspective on Corporate Moral Agency, 33 AM. BUS. L.J. 489, 538-46 (1996) (concluding that Rational Actor model is, at best, an incomplete picture of the corporation).

(62) See, e.g., Jim Campen, Lending Insights: Hard Proof That Banks Discriminate, in REAL WORLD MICRO (Randy Albelda et al. eds. 7th ed. 1997) (describing how mortgage lenders discriminate when approving mortgage applications).

(63) See COLANDER, supra note 46, at 119 (defining market failures as “situations where the market does not lead to a desired result”)

(64) See Eric Schutz, Markets and Power, 29 J. ECON. ISSUES 1147 (1995) (emphasizing importance of considering role of power in market).

Market societies are not essentially different from other developed

societies in human history

institutional status and privilege, inherently structured by arrangements

of power in all spheres of activity including the allocation of resources.

It is high time for mainstream economists … to rejoin the rest of the

social sciences in recognizing that fact.

Id. at 1166

(65) Moral hazard occurs when consumers or producers are tempted to be less than their best. We look to the market as a conflict resolution system. Producers would have the most opportunity to behave badly. The market is supposed to benefit the consumer.

(66) See COLANDER, supra note 46, at 117. Colander defines an externality as “the effect that an action may have on a third party that the person who undertook that action did not take into account.” Id.

An externality can be positive (in which case society as a whole benefits

even more than the two parties) or negative (in which case society as a

whole benefits less than the two parties)…. An example of a negative

externality is pollution. For example, when people use air conditioners,

they’ll probably let loose a small amount of chlorofluorocarbons, which go

up into the earth’s atmosphere and contribute to the destruction of the

ozone layer…. Neither the firms that produce the air conditioners nor the

consumers who buy them pay for the negative effects those

chlorofluorocarbons have on society. This means that the destruction of the

ozone layer is an externality–the result of an action that is not taken

into account by market participants.


Externalities are market failures because there is no mechanism by which the interests of the third party can be integrated into prices and output decisions. According to market theory, price represents the value of the resources that went into the production of a good. If the calculation of a price excludes third party effects, it does not reflect social value of resources. Consequently, resources are not properly allocated. In summary, when externalities occur, the market does not allocate resources correctly because the prices do not reflect the cost or value of the good to the consumers. See generally Christopher D. Stone, What To Do About Biodiversity: Property Rights, Public Goods, and the Earth’s Biological Riches, 68 S. CAL. L. REV. 577 (1995) (presenting positive and negative externalities as applicable to environment and discussing idea of earth as public good).

(67) See supra note 46 and accompanying text. Consumers are assumed to have full information in the market

For additional discussion of asymmetrical information see Gail B. Agrawal, Chicago Hope Meets the Chicago School, 96 MICH. L. REV. 1793, 1794 (1998) (reviewing MARK A. HALL, MAKING MEDICAL SPENDING DECISIONS: THE LAW, ETHICS, AND THE ECONOMICS OF RATIONING MECHANISMS (1997))

(68) See, e.g., Thomas G. Donlan, Editorial Commentary: The Pursuit of Power, BARRON’S, Mar 9, 1998, at 63 (discussing Microsoft’s battle with Justice Department concerning allegations that the company is a monopoly).

(69) See COLANDER, supra note 46, at 117 (describing public goods as “goods whose consumption by one individual does not prevent their consumption by other individuals,” such as national defense)

When public goods are involved, the free rider problem arises. Colander states that a free rider is “a person who participates in something for free because others have already paid for it.” See COLANDER, supra note 46, at 118 (“Self-interested people would like to enjoy the benefits of defense while letting someone else pay for it…. Everyone has an incentive to be a free rider, but if everyone is a free rider, there won’t be any defense.”).


(71) See, e.g., Thomas L. Greaney, How Many Libertarians Does It Take to Fix the Health Care System?, 96 MICH. L. REV. 1825, 1830-31 (reviewing RICHARD A. EPSTEIN, MORTAL PERIL: OUR INALIENABLE RIGHT TO HEALTH CARE? (1997)).

While market forces have undoubtedly fostered cost savings and

efficiency-enhancing improvements, there is abundant evidence suggesting

that health care markets perform less optimally than others. Those who

would resist regulatory efforts to improve competition in the health care

sector (or would withdraw from government all regulatory functions) might

be expected to address these documented failures of the private market.

Astonishingly, Epstein says almost nothing about how the competitive market

in health care has developed so far. The following empirical observations

underscore the point that persistent market imperfections undermine the

efficient functioning of health care markets. Together they support the

contention that government intervention to promote an infrastructure

conducive to competition could produce superior economic outcomes.


See generally Gross, supra note 43, at 386 (describing need for government regulation to protect powerless workers)

(72) See RAYACK, supra note 54, at 9 (focusing specifically on Milton Friedman’s thinking, but characterizing mainstream economic thought)

(73) See RAYACK, supra note 54, at 11-12.

(74) See id. at 10.

(75) But see WALZER supra note 24, at 96-103 (discussing blocked exchanges).

(76) See STONE, supra note 44, at 17 (“In searching for the elements of politics, it is helpful to use the market model as a foil because of its predominance in contemporary policy discussions. The contrast between the models of political and market society will illuminate the ways the market model grossly distorts political life.”).

(77) See id. at 18.

(78) See id. at 20 (analogizing relationship between public interest and polis to relationship between self-interest and market).

(79) See id. at 22.

(80) See id.

(81) See id. at 23

(82) See STONE, supra note 44, at 24 (“Influence sometimes spills over into coercion, and the line between them is fuzzy at best.”).

(83) See id. at 26. “In the ideal market, a buyer will switch suppliers in response to price or quantity change, rather than stick with the previous supplier. There is no `glue’ in buyer-seller relations. In politics, relationships are not so fluid. They involve gifts, favors, support, and most of all, future obligations.” Id. 84 See id. at 27.

(85) See STONE, supra note 44, at 25 (asserting that cooperation is just as important as competition in political thinking). See generally Saul Levmore, Essay: Competition and Cooperation, 97 MICH. L. REV. 216, 220-25 (1998) (exploring relationship between competition and cooperation and describing benefits of cooperation between competitors).

(86) See STONE, supra note 44, at 32 (“In the market model, change is driven by exchange, which is in turn motivated by the individual quest to improve one’s own welfare. Through exchanges, the use and distribution of resources is changed.”).

(87) See id. (“In the polis, change occurs through the interaction of mutually defining ideas and alliances. Ideas about politics shape political alliances…. The passion in politics comes from conflicting senses of fairness, justice, rightness, and goodness…. Every idea about policy draw boundaries. It tells what or who is included or excluded in a category.”).

(88) See id. at 373 (“Inspired by a vague sense that reason is clean and politics is dirty, Americans yearn to replace politics with rational decision-making. Contemporary writings about politics, even those by political scientists, characterize it as `chaotic’, `the ultimate maze’, or `organized anarchy.'”).

(89) It is important to distinguish here between using the market to help solve environmental problems designated by political debate in a fashion set up by democratic forces and using the alleged magic of market processes to solve problems as market players see fit to solve them. The former should be in the arsenal of every environmentalist. If the market can be instrumental toward achieving environmentalists’ ends, then by all means for that specific purpose, we should all champion markets.

(90) Mainstream economists make up the overwhelming majority of the economics profession. However, heterodox (non-neo-classical) economists are typically left-wing thinkers and thus have a preference for political solutions in the economics domain. Therefore, heterodox economists are more likely to recognize and highlight the importance of market failures. See supra notes 18-23 (discussing market failures).

(91) See Edward S. Herman, Privatization: Downsizing Government for Principle and Profit, in REAL WORLD MICRO, supra note 46, at 6, 10 (arguing that privatization is often less efficient and socially harmful than public enterprise).

(92) See STONE, supra note 44, at 59. See generally Caryn L. Beck-Dudley & James E. Macdonald, Lucas v. South Carolina Coastal Council, Takings, and the Search for the Common Good, 33 AM. BUS. L.J. 153 (1995) (discussing various concepts of property).


(94) “Unintended consequences” can also be phrased as “unintended outcomes.” See, e.g., CHARLES MURRAY, LOSING GROUND 179, 212-16 (1984).

(95) See HIRSCHMAN, supra note 93, at 11.

(96) Id. (noting that perversity thesis is often invoked as perverse effect of some “progressive” or “well-intentioned” public policy).

(97) Id. at 27 (“Even economists who are favorable to some measures of income and wealth redistribution tend to regard the most obvious `populist’ measures of that sort as counterproductive.”).

(98) See, e.g., Stephen M. Bainbridge, Community And Statism: A Conservative Contractarian Critique of Progressive Corporate Law Scholarship, 82 CORNELL L. REV. 856, 899 (1997) (reviewing PROGRESSIVE CORPORATE LAW (Lawrence E. Mitchell ed., 1995)) (discussing unintended effects of economic regulation)

(99) See HIRSCHMAN, supra note 93, at 39.

(100) See id. at 43 (“The attempt at change will be surface … as the `deep’ structures of society remain wholly untouched.”).

(101) See id. at 62.

(102) See id. at 84 (similar to slippery slope argument).

(103) See id. at 134.

(104) Id. at 151.

(105) Id. at 153.


(107) Id. at 18 (describing culture of contentment and contented majority).

(108) Id. at 20

See generally Frank B. Cross, Making Risk Policy in the Face of Expert/Public Conflicts: The Subtle Vices Behind Environmental Values, 8 DUKE ENVT’L & POL’Y F. 151 (1997) (concluding that public values generally should not be relied upon for risk regulation). But see Joshua D. Sarnoff, The Continuing Imperative (But Only from a National Perspective) for Federal Environmental Protection, 7 DUKE ENVT’L & POL’Y F. 225 (1997) (suggesting that we should tailor legislation to citizens’ preferences).

(109) See GALBRAITH, supra note 107, at 51.

(110) See RAYACK, supra note 54, at 78.


(112) See Amy Blaymore, Retroactive Application of Superfund: Can Old Dogs be Taught New Tricks, 12 B.C. ENVTL. AFF. L. REV. 1, 1 (1985) (according to EPA, in 1981 alone, Americans produced more than 150 million metric tons of hazardous waste).

(113) In the early 1980’s, the EPA estimated that approximately ninety percent of wastes were disposed of improperly. B. BROWN, LAYING WASTE–THE POISONING OF AMERICA BY TOXIC CHEMICALS 2 (3d ed. 1980).

(114) See, e.g., United States v. Monsanto Co., 858 F.2d 160 (4th Cir. 1988)

(115) The Love Canal, an abandoned waste site in Niagra Falls, New York, is considered the Congressional stimulation for CERCLA. A government decree on the Love Canal area evacuated the entire neighborhood after residents around the site noticed chemicals pouring into their homes. Although no “credible”scientific evidence ever confirmed suspicions that the chemicals posed serious health risks on the residents, the government finally took seriously the severity of such sites. Richard L. Stroup, Superfund: The Shortcut That Failed, in BREAKING THE ENVIRONMENTAL POLICY GRIDLOCK 115-16 (Terry L. Anderson ed., 1997). The lack of scientific evidence to confirm the potential health problems that Superfund sites may pose is one of the criticisms of CERCLA. See Jeffrey Lybarger, Agency for Toxic Substances & Disease Registery, Superfund Sites: Adverse Health Impacts, Congressional Testimony Before the Subcommittee on Superfund, Recycling, and Solid Waste Managment, (Apr. 12, 1993), <http://atsdr1.atsdr.cdc.gov:8080/cxcx7.html> (stating that “[o]ne of the major gaps is the general lack of knowledge about levels of exposure experienced by persons near Superfund sites … for many communities concerned about their health, the numbers of persons at potential risk of exposure are small, thus making epidemiological comparisons quite difficult”).

(116) Pub. L. No. 95-510, 94 Stat. 2767 (1980) (codified as amended at 42 U.S.C. [subsections] 9601-99675 (1994)) [hereinafter CERCLA].

(117) Because “hazardous substances” had been defined in several other existing acts, CERCLA references those acts for the definition of this term. Id. [sections] 9601 (14).

(118) Eighty-seven and a half percent of the initial $1.6 billion dollar fund was provided by a tax levied on the chemical and petroleum industries, which were thought to be primary dumpers. The other twelve and a half percent of the fund was provided from federal revenues. NANCY KUBASEK, ENVIRONMENTAL LAW 208 (2d ed. 1997). It soon became apparent that the initial funding amount would be inadequate to address the severity of the problem.

(119) Environmental Health & Safety Online, (last modified Oct. 7, 1998), <http://ehso.com/RSSGuide.htm>.

(120) CERCLA required the EPA to develop a hazardous ranking system that evaluated and ordered sites based on relative risk posed to human health. The National Priorities List (NPL) comprises those sites ranked the highest or the most in need of immediate remedial action. As of February 10, 1998, the EPA reports that there are 1,191 sites on the NPL. Environmental Protection Agency, Superfund: Frequently Asked Questions, (last modified Oct. 6, 1998), <http://www.epa.gov/superfund/faqs/sf_faqs.htm>. Superfund opponents criticize the program as inefficient, citing the relatively small portion of recovered NPL sites. Only 178 sites have been deleted from the NPL since the enactment of CERCLA. Environmental Protection Agency, Superfund: Sites Deleted from the National Priorities List, (last modified Oct. 8, 1998), <http://www.epa.gov/superfund/sites/npl/npldel.htm>.

(121) Cleanup costs are estimated to range from an average of $25 million to $50 million. See Michael L. Italiano et al., Environmental Due Diligence During Mergers and Acquisitions, 10 NAT. RESOURCES & ENV’T 17 (1996).

(122) Persons who own and operate the hazardous waste land, those who dispose of waste at a site (generators), and persons who transport waste to a site are among those who may be held liable as PRPs. 42 U.S.C. [subsections] 9607a-1 to 9607a-4 (1999). Furthermore, in addition to cleanup costs, a PRP may also have to pay for damage to natural resources. 42 U.S.C. [sections] 9607(a)(4)(c) (1999).

(123) See supra note 114.

(124) Some proponents of CERCLA reform argue that the liability provision, as it is currently enforced, is so onerous that it detracts from the purpose of the Act, which is to clean up contaminated sites. See Susan R. Poulter, Cleanup and Restoration: Who Should Pay?, 18 J. LAND RESOURCES & ENVTL. L. 77, 79 (1998). But see William N. Hedelman et al., Superfund Transaction Costs: A Critical Perspective on the Superfund Liability Scheme, 21 ENVTL. L. REP. 10,413, 10,415 (1991) (“Transaction costs are the millions of dollars in administrative, legal, engineering, consulting, and other management costs borne by the EPA, private industry, and local governments that do not directly result in cleaning up the waste site but are nonetheless inevitable in establishing liability for cleaning up a site.”).

(125) See Glenn Hess, Superfund Judgments Generated $790 Million in Cleanups Last Year, CHEM. MARKET REP., Mar. 17, 1997, at 1 (reporting that in 1996, the Justice Department generated a record amount of Superfund collections–over $790 million)

(126) See Jeff Johnson, Democrats Blast Revised Superfund, CHEM. & ENG’G NEWS, Sept. 15, 1997, at 22 (noting that it is unfair to reach back in time and punish company for doing something that was legal at the time)

(127) See Poulter, supra note 124, at 90-91 (charging that CERCLA’s application of liability is unfair and arbitrarily determined).

(128) See Stroup, supra note 115, at 120 (arguing that allocation by EPA can be without sound scientific or factual basis and the only defense PRP can offer in court is that EPA’s actions were “arbitrary and capricious” which is virtually impossible to prove).

(129) But see Peter K. Johnson, Mr. Smith Goes To Washington: 1997 Superfund Amendments–Will It Solve the Liability Problem and How Will This Affect Massachusetts?, 31 NEW ENG. L. REV. 1269, 1313 (1997) (noting how PRPs could still avoid paying their equitable share).

(130) See Water Resources and Environment: Hearings Before the Subcomm. on Water Resources and the Environment of the House Comm. on Trans., 105th Congress, available in 1997 WL 115055 (statement of Rep. Sherwood Boehlert) (stating that over one-third of $60 billion spent on Superfund sites since 1980 has gone to transaction costs).

(131) See, e.g., The Accelerated Cleanup and Environmental Restoration Act of 1995, S. 1285, 104th Cong. (1995) (exempting liability for small businesses, household contributors, and other disposers whose contributory portion of the contamination was relatively insignificant).

(132) See, e.g., James E. Satterfield, A Funny Thing Happened on the Way to the Revolution: The Environmental Record of the 104th Congress, 27 ENVT’L L. REP. 10019, 10028-30 (1997) (summarizing reform proposals in 104th Congress).

(133) See supra note 114.

(134) 562 F. Supp. 1300 (N.D. Ohio 1983).

(135) See id. at 1311.

(136) Id. at 1313-14.

(137) For a review of the case law on this issue, see Nancy Kubasek et al., Retroactive Liability Under the Superfund: Time to Settle the Issue, 13 J. OF ENVT’L. L. & LAND USE 197 (1997).

(138) 927 F. Supp. 1502 (S.D. Ala. 1996).

(139) Id. at 1511-12.

(140) 107 F.3d 1506 (1997).

(141) See Federal Government Rebuts ASARCO’s Challenge to CERCLA Retroactive Liability, 12 NO. 3 MEALEY’S LITIG. REP.: SUPERFUND 24 (1998).

(142) See H.R. 2500, 104th Cong. (1995).

(143) See S. 1285, 104th Cong. [sections] 701(b) (1995).

(144) See H.R. 3000, 105th Cong. (1997).

(145) See id. [sections] 201 (a).

(146) See Allan Freedman, Superfund Rewrite Focuses on Retroactive Liability, 53 CONG. Q. WKLY. REP. 1173 (1995).

(147) See id.

(148) United States v. ASARCO, Inc., 28 F. Supp. 2d 1170 (D. Idaho 1998).

(149) See Leovy v. United States, 177 U.S. 621, 636 (1900) (asserting that “swamps and stagnant waters are the cause of malarial and malignant fevers, and that the police power is never more legitimately exercised than in removing such nuisances”).

(150) Environmental Protection Agency, America’s Wetlands, (last modified May 29, 1997), <http://www.epa.gov/OWOW/wetlands/vital/toc.html>. See James J.S. Johnson et al., Bogged Down Trying to Define Federal Wetlands, 2 TEX. WESLEYAN L. R. 481 (1996) (discussing factors that are supposed to delineate a wetland, but noting that Congress exacerbated the definitional problem by passing criminal lawmaking authority–the right to designate wetlands, issue permits, and enforce wetland protection–to regulatory agency such as Army Corps).

(151) See, e.g., Environmental Protection Agency, Wetlands & People, (visited Dec. 18, 1998), <http://www.epa.gov/OWOW/wetlands/vital/people.html>.

(152) See Gary A. Lieberman & Evalyn S. Strauss, Development of Wetlands: A Call for More Effective Guidelines, REAL ESTATE FIN., Spring 1989, at 94 (also reporting that approximately 100 million acres of wetlands still exist).

(153) KUBASEK, supra note 118, at 239.

(154) 33 U.S.C. [subsections] 1251-1387 (1994) [hereinafter CWA].

(155) See 33 C.F.R. [sections] 325.2 (1995). But see Bradley C. Karkkainen, Biodiversity and Land, 83 CORNELL L. REV. 1, 65 (1997) (noting that section 404 does not prohibit all work and that permit requests deemed to have very little adverse impact on wetlands and/or surrounding environment are usually allowed, but proposed projects where wetland conversion is determined to have profound, negative effect on environment and for which there exists “practical alternatives” will be denied).

(156) See 33 U.S.C. [sections] 1318.

(157) KUBASEK, supra note 118, at 239.

(158) Royal C. Gardner, Banking on Entrepreneurs: Wetlands, Mitigation Banking, and Takings, 81 IOWA L. REV. 527, 529 (1996) (proposing called mitigation banking). For a discussion on the effectiveness of mitigation banking, see Jonathan Silverstein, Taking Wetlands to the Bank: The Role of Wetland Mitigation Banking in a Comprehensive Approach to Wetlands Protection, 22 B.C. ENVTL. AFF. L. REV. 129 (1994). See also Rob Shapard, Swamp Things: Handling Local Wetlands Issues, THE AMERICAN CITY & COUNTY, Nov. 1997, at 28-36 (proposing that local governments establish public or private mitigation management program).

(159) 16 U.S.C. [subsections] 3801-3862 (1994). The courts have virtually ignored most landowners’ pleas where wetland protection has affected the status of their land. See, e.g., Gunn v. United States Dept. of Agric., 118 F.3d 1233 (8th Cir. 1997) (denying relief to landowner whose property had been converted to wetlands by public actions).

(160) The Swampbuster provision has been included and reformulated in three farm bills–the Food Security Act of 1985, Pub. L. No. 99-198, 99 Stat. 1504

(161) 16 U.S.C. [sections] 3821(b) (1994).

(162) Id. at [subsections] 3801, 3821-3823.

(163) Dalana W. Johnson, Saving the Wetlands from Agriculture: An Examination of Section 404 of the Clean Water Act and the Conservation Provisions of the 1985 and 1990 Farm Bills, 7 J. LAND USE & ENVTL. L. 299, 309-10 (1992).

(164) See Karkkainen, supra note 155, at 67.

(165) But see id. at 67-68 (discussing how the 1996 revisions to Swampbuster are likely to reduce its long-term potency).

(166) 33 U.S.C. [subsections] 1401-45 (1994).

(167) Id. [sections] 1433 (a)(2).

(168) KUBASEK, supra note 118, at 239.

(169) 33 u.s.c. [sections] 1431 (a).

(170) KUBASEK, supra note 118, at 239.

(171) See Karkkainen, supra note 155, at 5 (commenting that many environmental proponents “argue that because species and ecosystems are interdependent in ways we neither understand nor control, their loss may take on a `snowball’ or `cascading’ effect, potentially producing conditions substantially more adverse to human life”)

(172) Curtis J. Richardson, Ecological Functions and Human Values in Wetlands: A Framework for Assessing Forestry Impacts, 14 WETLANDS 1, 3 (1994).


(174) U.S. CONST. amend. V. See, e.g., Dawn S. Spratley, Constitutional Law–Regulatory Takings–The Meaning of a Taking Under the Fifth Amendment and the Definition of Just Compensation Entitle Property Owners Regulated by the Wetlands Protection Act to Judicially Defined Compensation for Both Temporary and Permanent Takings, 75 U. DET. MERCY L. REV. 467 (1998). However, several courts have addressed this issue and several, but not all, plaintiffs have left the courtroom without any compensation. See, e.g., Florida Rock Indus. v. United States, 18 F.3d 1560 (Ct. Cl. 1994) (defendants arguing that Army Corps denial of permit amounted to a taking). On appeal, the Third Circuit disagreed that a taking had occurred and remanded the case back to the Claims Court. Florida Rock Indus., Inc. v. United States, 791 F.2d 893 (Fed. Cir. 1986). On remand, the Claims Court sided with the company again and awarded it the $1,029,000 once more. Florida Rock Indus., Inc. v. United States, 21 Cl. Ct. 161 (1990). On second appeal, the Third Circuit again stated that the record did not support Florida Rock’s accusation that the permit denial eliminated all valuable economic use of the land. Florida Rock Indus., 18 F.3d at 1572-73.

In Loveladies Harbor, Inc. v. United States, 28 F.3d 1171 (Fed. Cir. 1994), however, the plaintiff was successful in claiming that the Corps of Engineers’ order prohibiting construction on a wetlands was a regulatory taking. The property at issue in this case was a 12.5 acre parcel, consisting of 11.5 acres of wetlands and one acre of filled land on Long Beach Island, New Jersey. To develop the wetlands for residential use, Loveladies needed a permit to fill in the wetlands, which it was denied. Ultimately, the court found that the fair market value of the parcel prior to the permit denial was $2,658,000, whereas the value after the permit denial was $12,500, a diminution in value of over 99%. Given this significant diminution in value, the court was able to find a regulatory taking.

In Lucas v. South Carolina, 505 U.S. 1003 (1992), the Supreme Court stated that a deprivation of all economically viable use was a per se taking, unless the logically antecedent inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with.” Id. at 1027. For further discussion on Lucas’ impact on wetlands, see Richard C. Ausness, Regulatory Takings and Wetland Protection in the Post-Lucas Era, 30 LAND & WATER L. REV. 349 (1995)

(175) Dolan v. City of Tigard, 114 S.Ct. 2309 (1994) (“A strong public desire to improve the public condition [will not] warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.”).

(176) National Wildlife Federation, Nationwide Permit Proposal: An Overview, (accessed Jan.21, 1996), <http://www.nwf/wetlands/nwp/overview.html>.

(177) Id.

(178) Sally Deneen, Paradise Lost: America’s Disappearing Wetlands, 1998 WL 16883746 (Nov. 1, 1998).

(179) Under the new proposal, there would be six so-called “quickie” permits: (1) NWPA, which would authorize the filling of non-tidal wetlands and other waters for the purposes of residential, commercial and institutional activities and “associated infrastructure

(180) Supra note 178.

(181) Id.

(182) Id.


(184) Id.

(185) Id.

(186) Id.

(187) James V. Grimaldi, Endangered Species Act in Danger Itself, ORANGE COUNTY REG., July 31, 1994, at A1 (citing study conducted by Center for Responsive Politics, nonpartisan organization that tracks political contributions)

(188) 16 U.S.C. [subsections] 1531-1544 (1994) [hereinafter ESA]. Congress stated,

The purposes of this Act are to provide a means whereby the ecosystems upon

which endangered species and threatened species depend may be conserved, to

provide a program for the conservation of such endangered species and

threatened species, and to take such steps as may be appropriate to achieve

the purposes of the treaties and conventions set forth in subsection (a) of

this section.

Id. at [sections] 1531 (b).

(189) Id. [sections] 1531 (a)(3). Some opponents of the ESA have argued that despite this protection, the government has abused its authority in enforcing the Act by “taking” private property without just compensation. See, e.g., Omnibus Property Rights Act of 1995: Hearings on S. 605 Before the Committee on the Judiciary, 104th Cong. 6 (1995) (statement of Phil Gramm, U.S. Senator from Texas)

(190) 16 U.S.C. [sections] 1531 (a). See generally Kenneth Jost, Protecting Endangered Species, 6 CQ RESEARCHER 339, 340 (1996)

(191) 16 U.S.C. [sections] 1531 (b). One objection to the ESA is that it is too costly. But see Jost, supra note 190, at 341 (citing statistics from Fish & Wildlife Service–the least costly of the two ESA programs–that in 1995, its endangered species program cost only $79.3 million, which is less than the cost of building two miles of interstate highway).

(192) According to The Consortium of Aquariums, Universities and Zoos web page, there are 896 (343 animals, 553 plants) endangered species and 230 (115 animals, 115 plants) threatened species (last modified Sept. 4, 1998) <http://www.selu.com/~bio/cauz/links/endangered.html>.

(193) 16 U.S.C. [sections] 1532 (6).

(194) Id. [sections] 1532 (20).

(195) 5 U.S.C. [sections] 553 (1994).

(196) The Secretary of the Interior is charged with protecting terrestrial species, while the Secretary of Commerce determines the classification of aquatic wildlife.

(197) An important but controversial distinction is the difference between protecting the species and protecting the species’ habitat. See Michael Doyle Bee & Nancy Vogel, House Focuses on Species Protection, SACRAMENTO BEE, Sept. 8, 1995, at B1 (quoting former chairman of House Resources Committee, George Miller). See also Eric Fisher, Habitat Conservation Planning Under the Endangered Species Act: No Surprises & The Quest for Certainty, 67 COLO. L. REV. 371, 377 (1996)(arguing that narrow focus of ESA-protecting species only after they are deemed endangered or threatened-severely limits its efficacy).

(198) 16 U.S.C. [sections] 1533 (a) (1).

(199) See Robert H. Nelson, Shoot, Shovel and Shut Up, FORBES, Dec. 4, 1995, at 82. But see Jost, supra note 190, at 341 (noting that 60 economists in the Northwest attributed industry downturn to over harvesting in prior years).

(200) 16 U.S.C. [sections] 1533 (b) (1) (A). However, Congress did permit the Secretary to consider economic factors when designating the critical habitat, “if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless he determines, based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned.” Id. [sections] 1533 (b) (2).

(201) Id. [sections] 1538 (a)(1)(D).

(202) Id. [sections] 1532 (19).

The inclusion of this word has sparked a great deal of controversy regarding its meaning within the Act. The problem arises because Congress, when writing the ESA, did not define what it meant by “harm.” Consequently, in 1995, Secretary of the Interior Babbitt promulgated this definition via The Interior Department regulations: “Harm in the definition of “take” in the Act means an act which actually kills or injures wildlife. Such act may include significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding, or sheltering.” 50 C.F.R. [sections] 17.3 (1994). Businesses organizations, and families who were dependant on the forest industry in the Pacific Northwest and Southeast for their livelihood challenged this interpretation of the word “harm” in the act’s definition of “taking,” because the interpretation prevented them from engaging in certain logging activities in certain areas because these areas were critical habitats of the red-cockaded woodpecker, an endangered species, and the northern spotted owl, a threatened species.

In Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687 (1995), the Supreme Court ruled that Babbitt’s construction of”harm” was reasonable because the “ordinary understanding” and the dictionary definition of the word specifically means to kill or injure, but is not limited to direct and willful actions. Therefore, although respondents did not take willful action to directly kill the animals, their logging activities had the result of indirectly killing the species because the activities destroyed the animal’s habitat. Id. at 697-98. Furthermore, the Court reasoned that if “harm” were restricted to direct actions, Congress would have been redundant to include it in the definition of “taking” because the remainder of the definition explicitly suggests direct injury. Id. at 697-98.

(203) 16 U.S.C. [sections] 1532 (5)(A).

(204) See, e.g., Doyle & Vogel, supra note 178, at B1 (of the 960 species covered by the ESA, only eight have been deemed “recovered.” See also Ray Vaughan, State of Extinction: The Case of the Alabama Sturgeon and Ways Opponents of the Endangered Species Act Thwart Protection for Rare Species, 46 ALA. L. REV. 569, 578 (1995) (noting that more than twenty years of work under the ESA have produced only a very limited number of instances where a species has recovered to the point where its survival is no longer threatened).

(205) See Martha F. Phelps, Candidate Conservation Agreements under the Endangered Species Act: Prospects and Perils of an Administrative Experiment, 25 B.C. ENVTL. AFF. L. REV. 175, 183 (1997). Additionally, the Act requires the Secretary to estimate the time and cost requirement necessary to complete the plan. 16 U.S.C. [sections] 1533(f)(1)(B)(iii).

(206) See Grimaldi, supra note 187, at A1 (commenting that supporters of the expired act were trying in 1994 to postpone reauthorization vote in hopes that 1995 votes would be more favorable for strengthening ESA)

(207) See, e.g., WILSON, supra note 190, at 285 (over twenty-five percent of all prescriptions dispensed in the U.S. come from plante, thirteen percent come from microorganisms, and three percent come from animals).

(208) Rep. John Dingell, Foreword to DANIEL J. ROHLF, THE ENDANGERED SPECIES ACT: A GUIDE TO ITS PROTECTIONS AND IMPLEMENTATION 1 (1989). Dingell is a long-standing environmentalist in the House of Representatives. He introduced the bill that later became the Endangered Species Act.

(209) ROBERT L. HEILBRONER, THE WORLDLY PHILOSOPHERS: THE LIVES, TIMES, AND IDEAS OF THE GREAT ECONOMIC THINKERS 49-50 (1953). Because of corporations’ large sizes and vast power, they are able to overlook the public’s preferences related to costs and effects (such as habitat destruction) that arise as a consequence of their producing goods and services.

(210) 143 Cong. Rec. S4214 (May 4, 1998)(statement of Sen. Craig).

(211) The ESA states:

No permit may be issued by the Secretary authorizing any taking [of a

listed species] unless the applicant therefor submits to the Secretary a

conservation plan that specifies–

(i) the impact which will likely result from such a taking

(ii) what steps the applicant will take to minimize and mitigate such

impacts, and the funding that will be available to implement such steps

(iii) what alternative actions to such taking the applicant considered and

the reasons why such alternatives are not being utilized

(iv) such other measures that the Secretary may require as being necessary

or appropriate for purposes of the plan.

16 U.S.C. [sections] 1539(a)(2)(A) (1999).

(212) The “no surprises” clause states,

(i) In general.–Each conservation plan developed under this subsection

shall include a no surprises provision, as described in this paragraph.

(ii) No surprises.–A person who has entered into, and is in compliance

with, a conservation plan under this subsection may not be required to

undertake any additional mitigation measures for species covered by such

plan if such measures would require the payment of additional money, or the

adoption of additional use, development, or management restrictions on any

land, waters, or water-related rights that would otherwise be available

under the terms of the plan without the consent of the permittee. The

Secretary and the applicant, by the terms of the conservation plan, shall


(iii) other modifications to the plan

(iv) other additional measures

under extraordinary circumstances.

S.1180, 105th Cong. [sections] 5 (1997). See generally John J. Fialka, Endangered Species Act, Itself Endangered, May Have Found the Political Backing to Survive, WALL ST. J., Mar. 20, 1988, at A20 (reporting that Sen. Babbitt supports the use of a no surprises policy)

(213) 143 CONG. REC. S9412 (1997).


(215) S. REP. NO. 105-128, at 59-60 (1997).


(217) E.K. HUNT, PROPERTY AND PROPHETS: THE EVOLUTION OF ECONOMIC INSTITUTIONS AND IDEAS 39-40 (7th ed. 1995) (providing excellent summary of psychological, political, and economic assumptions that wed individualism and markets).

(218) Andrea Giampetro-Meyer, et al., Advancing the Rights of Poor and Working-Class Women in an Individualistic Culture, 2 LOYOLA POVERTY L. J. 41, n. 2 (1996).

(219) Id. at 42, n.3.

(220) See David Warner, Not So Great Expectations, 86 NATION’S BUS., Jan. 1998, at 26 (predicting repetition of the gridlock if normal Congressional habits are followed).

(221) See generally Bruce A. Ackerman, Reforming Environmental Law: The Democratic Case for Market Incentives, 13 COL. J. ENVTL. LAW 171 (1988).

M. NEIL BROWNE, Professor of Economics, Bowling Green State University

NANCY K. KUBASEK, Professor of Legal Studies, Bowling Green State University3