Abstract

Beat the Devil

What many environmentalists do not admit is that all the legislative triumphs for the environmental movement in the 1970s imposed real constraints on capitalist profitability. It is important to stress that when environmental regulation raises the cost of capital in raw materials and capital goods industries higher costs are generalized throughout the economy for all industries. The same regulations applied to consumer goods industries affect the cost of only one or a handful of commodities. In the 1970s, nearly one half of all capital investment was made in polluting industries supplying inputs to other industries. These were hardest hit by environmental regulations, which therefore increased the cost of capital throughout the economy as a whole.