Tag Archives: capitalism

On this episode of Free Range, Mike Livermore speaks with Shi-Ling Hsu, the D’Alemberte Professor of Law and Associate Dean for Environmental Programs at the Florida State University College of Law. He is also the author of the book Capitalism and the Environment: A Proposal to Save the Environment, which was published in December 2021 by Cambridge University Press.

Professor Hsu begins by discussing what motivated him to pursue a PhD in Agricultural and Resource Economics, having already practiced for several years as a lawyer, and how his experience as a graduate student with a law degree differed from his colleagues (1:00 – 2:58). Hsu then summarizes the basic argument of his new book: that the environmental problems the world currently faces are not the fault of capitalism but, rather, are the result of society’s decisions. This leads to a discussion about the relative advantages of capitalism versus centralized planning when it comes to dealing with environmental problems. As part of this analysis, Hsu comments on the shift away from market-based mechanisms that has characterized recent environmental law (3:00 – 11:30).

This discussion raises the question of what role increasingly stark economic inequality has played in creating discontentment towards capitalism, to the point of blaming capitalism for things that are not, according to Hsu, capitalism’s fault. This leads to an in-depth conversation about the benefits and drawbacks of using capitalism as a means of addressing environmental issues, the intersection of economic inequality and the political undermining of capitalism, and why Hsu believes socialism is not the answer some might think it is (11:35 – 24:45).

Professor Livermore then asks Professor Hsu about the libertarian argument against taxation, both in terms of environmental law and more generally. Professor Hsu explains that some libertarian arguments about reducing the size of government may be misguided, drawing on his experience of working on environmental projects with the Canadian government. Hsu also explains why he believes taxes are more beneficial than subsidies, with Professor Livermore pointing out that the unpopularity of taxes when compared with subsidies means that taxes are difficult to use in environmental contexts. Hsu suggests that a compromise might be reached in which nascent renewable energy technologies are subsidized, leading to a political economy in which taxation is more palatable, and then proposes other ways to reduce the apprehension towards taxation (25:00 – 42:05).

Professor Livermore questions whether a carbon tax will ever be widely accepted, which leads Professor Hsu to suggest that the United States has simply not yet reached the point of crisis that may be necessary to shift the emphasis from subsidization to taxation, which leads to a discussion of the Green New Deal (42:07 – 48:33) Professor Livermore compares carbon taxation with the various “glide-path” policies that were used to reduce cigarette consumption (48:35 – 50:50).

The conversation ends with a return to Professor Hsu’s book, and what effect he believes the work will have on the current debate surrounding environmental economics, and who the argument in his book is appealing to (50:53 – 59:19).

On this episode of Free Range with Mike Livermore, Mike speaks with Boston University School of Law professor Madison Condon about the interaction between corporate governance and environmental concerns. Condon has written extensively on how corporations are changing their approach to the environment in the face of climate change issues and the rise of ESG investing, which incorporates Environmental, Social, and Governance considerations into larger investment strategies.

The conversation starts off with a discussion of the influence of massive investment funds like BlackRock, Vanguard, and State Street in the world of corporate governance. These funds are so large that they are now capable of exerting considerable influence over corporate decisions. Condon introduces the concept of Universal Owner theory in the corporate world: institutional investors have such diversified portfolios that it is now in their best interests to care about the environment (1:04 – 7:18).

This leads into an analysis of activist investment fund Engine No. 1 which, in 2021, engaged in a successful proxy battle to gain seats on ExxonMobil’s board of directors. Condon also touches on broader questions of whether the strategy employed by Engine No. 1 to win the proxy battle opens the door for potential antitrust violations, and the benefits and drawbacks of shareholder primacy. Expanding on these questions, Livermore and Condon discuss a hypothetical situation in which an institutional investment fund acts to benefit itself at the expense of a company’s continued existence, and what this behavior might implicate more generally (8:40 – 21:50).

Condon then talks about one of the potential outcomes of activist investment — a rise in shareholder derivative suits alleging that boards have breached their fiduciary duties. This part of the conversation hits on various aspects of corporate law, including the scope of the business judgment rule and the significance of Delaware in America’s corporate legal regime (23:43 – 31:45).

The conversation then shifts to a discussion of the divestment movement as a strategy to influence corporate behavior in the environmental context, the way corporations have engaged in greenwashing in response to the divestment movement’s demands, and the rise of ESG in corporate decision-making (31:51 – 48:52).

The conversation concludes with Condon clarifying her position regarding just how influential investment funds can actually be in affecting action to slow climate change (50:21 – 55:30).