… is from page 252 of historian Larry Schweikart’s 2000 volume, The Entrepreneurial Adventure: A History of Business in the United States:
One of the first results of Rockefeller’s quest to eliminate waste was that prices fell so low on kerosene that not only did it drive out fuels such as whale oil and coal oil but for a while it kept electricity at bay. Standard Oil hired chemists to find still other uses for the by-products [of the process of refining crude oil into kerosene], eventually producing more than 300 different products from a single barrel of oil. But Rockefeller did not ignore increasing production and eliminating waste from the refining process itself, pushing prices still lower.
Contrary to myths popular in the media and among “Progressive” academics, producers in private-property markets seek to reduce waste; they are not indifferent to it. Waste is costly – or, alternatively, it represents as-yet-untapped riches. When genuine waste does occur in market economies, it is the product of poorly defined property rights. So when genuine waste occurs in a market economy, it is the consequence not of market failure but, rather, of legal or government failure.
In a happy irony, though (as economic history shows), even when property rights to valuable resources are not sufficiently well-defined or enforced, market processes sometimes nevertheless ‘solve’ the problem. If it’s the case that whales were being over-hunted in the 19th century, the reason is that property rights in those creatures were poorly defined.* (Cows and chickens today aren’t on the verge of extinction despite huge demand for products made from their slaughter. Property rights in cows and chickens are well-defined and secure.) Yet the whales arguably were saved, not by pro-environment legislation, but by the advent of a much-less-expensive substitute for whales as a source of fuel oil: petroleum.
* My knowledge of this history is too sparse for me to write with any certainty that whales were in fact being over-hunted in the 19th century. I suspect that they were indeed being over-hunted for some time until the advent of kerosene, but I might well be mistaken about this matter.