Environments damaged by industrial or government activities have been rejuvenated. For example, U.S. cities such as Pittsburgh and Cleveland, once famous for air and water pollution, are now clean and thriving. Ultimately, poverty is the principal enemy of the environment. Often the poor have no choice but to cut down forests for fuel and farmland, thereby exacerbating erosion, silting rivers, eradicating wildlife habitat, and even contributing to climate change. By giving people employment, we reduce poverty and thereby help protect the environment.
National governments have to know when to lead, when to follow, and when to get out of the way.
The information revolution has lowered the cost of transactions and information and thereby made markets more efficient, competitive and broad. Many forms of government intervention in markets or government ownership of companies are either ineffective or come at too high a cost to society. And they inevitably lead to corruption. Nevertheless, national governments are still profoundly important in providing societal and regulatory structures that underpin economic performance. The role of government is to build an environment that encourages innovation, flexibility and efficiency.