Why Democracies Have Outsourced Their Dirtiest Industry — and How FME Brings It Home Without Coercion
J.W. Sher
November 25, 2025
I. The Poison We Pretend Doesn’t Exist
Walk half an hour outside Baotou, Inner Mongolia, and you will reach a black lake the size of a small city. Its surface is crusted with chemical salts; its water has a pH close to battery acid. The wind carries a metallic stench. Nothing grows for kilometers around. No grass, insects, or even bacteria are in the topsoil. This is the main tailing pond for the Bayan Obo rare-earth mining district, the source of roughly 60 % of the planet’s rare-earth oxides.
Seventeen elements, indispensable for permanent magnets in electric motors, wind turbines, MRI machines, and precision-guided munitions, come out of that mine. And almost every tonne of finished oxide leaves behind roughly 1-2 tonnes of radioactive, acidic sludge that has to go somewhere. That “somewhere” is usually a valley filled to the brim with a toxic soup held back by an earthen dam. When the valley is full, they build another one.
In China, these ponds now cover hundreds of square kilometers. Leaks are routine. Villages have been relocated by government order. Cancer clusters are officially “under study.” Protests are not allowed.
In the West, we have decided that we will never tolerate such a landscape at home. No democratic planning commission, no matter how generous the compensation package, has ever succeeded in siting a major rare-earth separation plant with its attendant tailing pond. The moment the public learns that 20-30 km² of land will be permanently sterilized, the project dies in environmental reviews, lawsuits, and electoral backlash.
So we import the oxides from places that can force the damage on unwilling populations, and we call ourselves “green.”
This arrangement is morally indefensible and strategically suicidal. It is also completely unnecessary once you have Free Market Ecology.
II. The Core Innovation: Hundreds of Distinct, Non-Fungible RURs
Free Market Ecology is not a carbon-tax, not a cap-and-trade scheme, and definitely not a fiat-priced offset market. It is a complete replacement of money in the productive layers of the economy with capped, blockchain-tracked Resource Usage Rights (RURs).
There is no single numeraire. There are hundreds or thousands of distinct RUR types — one for every resource or externality that humanity must keep within sustainable bounds:
- Barrels of crude oil equivalents
- Cubic meters of freshwater withdrawal
- Kilograms of nitrogen runoff
- Square kilometers of acid-sterilized land (ALD-RURs)
- Hectares of primary rainforest canopy removed
- Tonnes of thorium-232 placed in long-term storage
- Megawatt-hours of high-level radioactive waste heat
- And hundreds more…
Each RUR type is capped separately by the Ecological Central Bank according to the best Earth-system science. The caps are non-fungible and non-equivalent. You cannot turn one barrel of oil-RUR directly into one square kilometer of ALD-RUR — but you can trade them on a deep, transparent RUR exchange where relative prices are discovered in real time by millions of producers and consumers.
Money (whether fiat or cryptocurrency) is used only at the very edges of the system — mostly for labor that has not yet been automated and for retail-facing simplification layers (see “Simplified Consumption in Free Market Ecology”). The entire B2B supply chain — from mine to smelter to factory to assembly — settles exclusively in multi-dimensional bundles of RURs.
This is the part almost everyone gets wrong the first three times they hear it, and it is the part that makes everything else possible.
III. Why Carbon Credits (and all current offset markets) Fail This Test
Carbon credits, nutrient credits, biodiversity offsets — every existing market-based environmental instrument — suffer from the same fatal flaw when confronted with a rare-earth tailing pond: the damage is separated from the product.
In today’s system, a processor buys a certificate from a tree-planting project in Madagascar, retires it, and then sells “green” rare-earth oxides that carry no trace of the actual acid lake. The buyer has no idea whether the offset is real, additional, permanent, or simply creative accounting. Greenwashing is not a bug; it is baked into the architecture.
Free Market Ecology eliminates that separation. The quantified damage (the ALD-RURs) is physically and cryptographically bound to the material as it moves through the supply chain. There is no way to “offset” it somewhere else; the damage travels with the product until the final consumer permanently retires it from their own fixed ecological quota. This makes greenwashing impossible and gives consumers real, granular power over what damage they are willing to accept.
IV. The Exact Flow of Acid-Land-Damage RURs (ALD-RURs)
Let us run the numbers for a hypothetical 20 km² tailing pond. More on how this all works can be found in The Financial System of Free Market Ecology.
- Step 1: The Ecological Central Bank issues or auctions the 20 km² block of ALD-RURs to Ecological Private Finance (total global cap = 500 km² per decade).
- Step 2: The dirty rare-earth processor borrows the 20 km² ALD-RURs against collateral. The moment the pond is filled, the entire 20 km² sits on its ecological balance sheet.
- Step 3: The processor transfers to downstream buyers, tagging every tonne of separated REO with its pro-rata share: 0.002 km² ALD-RURs per tonne (assuming 10 million tonnes annual output).
- Step 4: The magnet maker, motor maker, and EV OEM receive the ALD-RURs inseparably with the physical material. No stage can “wash” the damage off.
- Step 5: The final consumer (or fleet buyer) takes delivery of the finished product, permanently deducting the 0.002 km² per tonne from their personal lifetime or annual ALD-RUR quota. The damage is now retired by the person who actually enjoys the benefit.
If consumers decide that an electric car is not worth sacrificing even a thousandth of a square kilometer of land-equivalent damage, they simply refuse products carrying high ALD-RUR loads. Demand collapses upstream. The dirty processor cannot sell enough oxide to repay its RUR loan. The project dies without any regulator having to ban it.
V. The Markup Engine — How Eliminating Damage Creates Extreme Wealth
Now introduce a clean innovator who develops closed-loop separation (bioleaching, molten-salt electrolysis, urban mining, dry stacking + full neutralization, etc.) and causes only 0.00001 km² ALD-RURs per tonne of actual damage — effectively zero.
The clean producer only borrows the tiny amount of ALD-RURs needed for the actual damage (0.00001 km² per tonne). When he sells the oxide, however, he embeds 0.001 km² ALD-RURs per tonne — his actual damage plus a substantial ecological markup.
The downstream magnet maker must borrow that full 0.001 km² from Ecological Private Finance and transfers it back to the clean producer as payment. The consumer ultimately retires the full marked-up amount from their quota, seeing only a product that is still far cleaner (0.001 vs. 0.002 km²) than the dirty competitor’s.
This is exactly analogous to traditional capitalism: the capitalist pays the worker $10/hour but sells the labor embedded in the product for $20/hour, keeping the difference as profit. Here, the clean producer “pays” almost nothing in actual land damage but sells the product as if it carried a significant (but still competitive) damage load, keeping the difference as markup.
No excess damage occurs, yet the clean producer receives ~0.001 km² ALD-RURs per tonne from downstream, repays the borrowed 0.00001 km², and pockets the ~0.00099 km² markup as pure profit. At global scale, this is tens of square kilometers of freed-up land-damage rights per decade — one of the scarcest commodities on Earth.
He can then:
- Trade those marked-up ALD-RURs on the RUR exchange for whatever other scarce rights he or his shareholders desire (oil-RURs for spaceflight, habitat-RURs for private nature reserves, etc.).
- Distribute them directly as dividends — shareholders receive actual pieces of the living planet they can spend or trade.
- Retain them for personal luxury consumption (the only way in FME to live extravagantly is to have earned enormous quantities of scarce RURs through ecological efficiency).
This marked-up RUR mechanism is the most powerful profit incentive ever designed. The entrepreneur who finally eliminates rare-earth tailing ponds does not merely become a billionaire. He becomes one of the wealthiest humans in history, paid in freed-up pieces of the Earth itself.
VI. Why This Is Politically Possible in Democracies (and Only in Democracies)
Under Free Market Ecology:
- No village, no county, no state is ever forced to host an acid lake.
- No politician has to vote yes or no.
- The veto is distributed to hundreds of millions of consumers who vote every day with their fixed, multi-dimensional RUR budgets.
- Local opposition still matters — because if the pond is in a sensitive watershed, the Central Bank will set the ALD-RUR price accordingly high — but the final decision rests with the global market of end users.
If the world genuinely believes that abundant rare earths for the energy transition are worth 20 km² of carefully sited, fully accounted damage, the project can proceed transparently. If not, the dirty processor goes bankrupt, and the clean innovator captures the markup.
Either way, the outcome is reached without coercion, without greenwashing, and without outsourcing the poison to people who have no voice.
VII. Conclusion: The End of Sacrifice Zones
The rare-earth tailing pond is the perfect stress test for any economic system that claims to be both sustainable and compatible with freedom.
Current capitalism fails because it externalizes the damage into fiat money and authoritarian politics. Central planning fails because no committee can process the dispersed knowledge required. Voluntary offset markets fail because they separate the damage from the product and enable greenwashing.
Free Market Ecology succeeds because it makes the damage inseparable from the product, caps it scientifically, tracks it on a blockchain, and turns its elimination into the greatest entrepreneurial prize imaginable.
The age of pretending we can have permanent magnets without permanent sacrifice zones is over. The age of rewarding the people who finally make that possible with pieces of a living planet has begun.
If you want to start prototyping the multi-RUR balance sheets, the provenance tagging standards, or the first zero-tailings rare-earth pilot, reach me on X at @undeservingfut.
The future does not have to be written in black lakes.