If I cut down trees to build a house, then I may have created "wealth" but I've also destroyed trees. Now the net affect may be that wealth has increased, but it may also have an effect which actually destroys wealth like for instance if those trees existed on a hill, and the roots were holding the soil in place, the act of cutting down
"Free market" economics does not capture this destruction of value. It only cares that some value was extracted out of the trees in the form of a new home sale, etc.
I'm sure all those slaves brought over to the New World created tremendous wealth, but I'm also pretty sure they would have rather preferred to stay in Africa.
Your first example is completely wrong. Trees are a renewable resource. In North America, most of the trees that are cut down to build houses were intentionally grown for that purpose and are selectively harvested in a way that preserves the long-term value of the land.
Meh, sort of. Today's construction lumber is nearly all farmed, true. But CITES exists for a reason. The demand for certain woods greatly outstraps supply, and deforestation and smuggling is a real problem that's difficult to solve. And that's even without considering deforestation that's done to open up new farmland.
Madagascar is the obvious example here highlighting both issues, but it's certainly not unique.
> "Free market" economics does not capture this destruction of value.
Oh, but it does. It turns out that people who own land take care of it, so that it keeps producing. People who own timber land tend to manage it so it continues to be productive.
Destruction happens with government owned land.
For a related example, why are we not running out of cattle, hogs, and chickens, despite slaughtering them on an epic scale? And why are we running out of fish?
They might take care of their land, but they don’t generally care what happens to other peoples land. So excess fertilizer creating dead zones downstream? Well sucks to be them I guess. Markets are not good at pricing in externalities such as those
A proper function of government is to internalize the externalities (with fines or taxes).