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Terry Anderson on Environmentalism and Economic Prosperity


Published March 18, 2021

There may be a period in the process of economic growth where economic concerns far outweigh environmental ones. However, as the economy grows and incomes rise, people often place more value on the environment. But a society does not have to sacrifice economic growth for environmental quality.

This video’s audio is excerpted from an episode of the Uncommon Knowledge web series, published by the Hoover Institution.

Additional Resources:

  • Watch the Uncommon Knowledge podcast episode “Why Here, Why Now? Why Did the United States Enjoy Dramatic Improvements in the Standard of Living During the Last Century?,” with Terry Anderson, George Shultz, John Cogan, and Lee Ohanian. Available here.
  • Watch “Economic Growth: The Path to a Cleaner Environment,” based on the work of Terry Anderson. Available here.
  • Watch “Environmental Markets: A Property Rights Approach,” with Terry Anderson. Available here.
View Transcript

The data all support that that while there may be a period in the growth, in the prosperity, in the economic process where we are willing to sacrifice the environment in order to have economic growth, when we get a little bit wealthier and have higher incomes, we become environmentalists.

We are all environmentalists because we can afford to be environmentalists. I’ve gone to Africa many times. You talk to really poor people in Africa about saving endangered species and they look at you like, ‘Are you crazy? I am the endangered species. My children are the endangered species. My corn crops are.’ When we get rich enough, we can afford to be environmentalists. And the data show over and over that this country, because it is wealthy, has turned to improving the environment.

Whether it’s forest cover, whether it’s water quality, whether it’s general air quality, all of those things have been improving as a result of prosperity. I think that’s crucial to keep in mind, that it’s not, as George [Shultz] was talking about earlier, it’s not guns or butter. In this case, it’s not the environment or economic growth. They come together, and our country is a perfect example.