NEIGHBORHOOD EFFECTS AND COLLECTIVE GOODS
The preceding exposition has laid out an uncritical Hayekian case for solving environmental problems through market processes. In the eyes of some of his recent exponents, this analysis largely exhausts Hayek’s contribution to environmental political economy. As Roy Cordato puts the point:
Hayek’s guidelines point toward a true free-market approach to environmental issues. We must establish rules of conduct that clearly define people’s rights, their “protected domain.” The primary goal of all public policy, including environmental policy, should be the enforcement of rights once they are clearly defined. (1997, 385)
Comments like these help to illustrate Hayek’s influence as an inspiration for free-market environmentalism. Yet, as I will show in this section, Hayek himself made important qualifications to the claim that environmental problems should be left to the market. These arguments open the door for a very different interpretation of Hayek’s legacy than free-market environmentalists have emphasized—one that makes considerable room for political interventions to address environmental issues.