WASHINGTON, D.C. -- I have occasionally described PRI's mission in liberal San Francisco as trying to bring a Smith & Wesson attitude to a Smith & Hawken style city. Comes now Mr. Paul Hawken himself, offering a perfect foil with a reflection about how capitalism can save the environment in a cover story in this month's Mother Jones magazine.

The article is titled " Natural Capitalism: We Can Create Jobs, Reduce Taxes, Shrink Government, Increase Social Apending, and Restore the Environment." Memo to Jack Kemp: Better call your office. On the one hand, we should express pleasure and approval that Hawken is striving to endorse, even if superficially, one of our core values-capitalism instead of socialism. But before you get very far along in Hawken's manifesto, you get the distinct impression that Hawken must be hanging out in the same salons as George Soros, whose recent musings about the peril of free markets in The Atlantic Monthly struck most observers as exquisitely bass-ackwards.

While it would require a lengthy seminar to begin to sort out the confusion and misapprehensions in Hawken's article. There are some spectacular whoppers. One such assertion is that "Industry has always sought to increase the productivity of workers, not resources"-a notion that would come as a surprise to all the industries that have achieved huge efficiency gains in raw material and energy usage over the last 30 years.

Much of the article has the quality that Churchill once observed of Stanley Baldwin: "Occasionally he stumbled over the truth, but hastily picked himself up and hurried on as if nothing had happened." Hawken notes that "money and prices don't give us exact information about how much our suburbs, freeways, and spandex cost." I don't know about spandex, but the lack of genuine price signals for things such as land use and transportation can be laid squarely at the feet of government failure, not market failure. Most of Hawken's examples of genuine unsustainability or waste can be laid at the feet of government failure and subsidy rather than market failure.

Instead of following the logic of his argument and calling for more markets and less government distortion of markets, Hawken jumps on the "tax shift" bandwagon-meaning that the government will get into the price-fixing game, with enlightened experts deciding how much we should tax "bads" (pollution) instead of "goods" (like income).

From Hawken and the Soros Atlantic article you might conclude that economics ought to come with a warning label ("Don't try this at home"), but the more important lesson is to beware of the hijacking of "market" language by well-meaning but confused crusaders. "Market socialism"-which is what government price-fixing-on-behalf-of-the-environment schemes really amounts to-is still socialism nonetheless.

-By Steven Hayward