Added together, market forces generate an overall result which no-one can predict. This is the invisible hand which the economist Adam Smith argued brought general prosperity. But it can equally be an invisible elbow which brings the earth s precarious ecological balance crashing down like a pile of cans in a supermarket. Bronzed, rich and dying To protect the environment we must force consumers and producers to make decisions which take wider interests into account. We need to internalize the externalities - to bring all the costs back into the box so that the consumer pays the full price.
Market forces have to be controlled and there are two main mechanisms for doing it.
The first is regulation. Consider the case of the stereotypical Californian - tall, fit, bronzed, driving carefree down the freeway. In fact 98 per cent of Southern Californians suffer from the effects of photochemical smog - the thick pall of carbon monoxide, nitrogen dioxides and ozone which hangs over the area around Los Angeles. On two days out of three in 1988 the air exceeded national health standards. On 75 days the smog was so bad that schoolchildren were advised to stay indoors.