Spotlight: Environmentalist Cum Economist

John Baden and Richard Stroup

One tends to expect outstanding economic and environmental investigation to be centered in large metropolitan areas. High-powered think tanks seem natural in Boston, New York, Chicago, or Los Angeles. So it is surprising to find a superlative center of academic research and dialogue nestled among the mountains of Montana in the city of Bozeman, with a population of less than 25,000.

The Center for Political Economy and Natural Resources at Montana State University was organized by John Baden and Richard Stroup in the spring of 1978. Its purpose is to provide an institutional setting for the study of political economy and natural resource issues with the application of property rights and a free-market approach. To this end, the center conducts seminars and conferences, sponsors publications, and offers support to graduate students doing work on resource economics.

Authors working under the auspices of the center have produced a number of publications: Managing the Commons, by Garrett Hardin and John Baden; a textbook, Economics: Private and Public Choice, by James Gwartney and Richard Stroup; Earth Day Reconsidered, edited by Baden; and, forthcoming, The Birth of a Transfer Society, by Terry Anderson and P.J. Hill (authors of "An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West," in a 1979 Journal of Libertarian Studies). Stroup, Anderson, and Baden also coauthored the forthcoming text Natural Resource Economics: Foundation for Policy Analysis.

The Cato Institute and Liberty Fund will both have environment-related seminars hosted by the center this year "in the middle of no goddam place," says Baden, obviously amused at the center's unorthodox rural setting. The conferences are held at a guest ranch in the Montana mountains complete with trout fishing and wildlife. "We have a comparative advantage here," Baden admits. "Who really wants to go to Dallas for a convention?"

The partnership of Richard Stroup and John Baden is the prime mover behind the center. It is a colorful if not unlikely alliance. By those who know his work, Stroup is esteemed as a deeply reflective and creative economist. An associate says that "he thinks about everything in terms of economics. He has one of the best analytical minds in economics today." Stroup attended the Massachusetts Institute of Technology, graduated from the University of Washington, and teaches at Montana State University in addition to his activities at the center. His list of publications is nearly four pages long. He is soft-spoken and wary of political involvement.

John Baden is a different case. With a quick grin beneath his bushy mustache, Baden is vocal and enthusiastic. Characterized as flamboyant and a promoter, Baden has been successful in raising some $350,000 to carry on the center's work. Being interviewed, Baden was the more talkative of the two, but after answering a question he would turn to Stroup for verification, amendment, or modification.

John Baden is a political scientist—a political anthropologist, to be exact. But he more closely resembles the standard image of an environmentalist. An ex-logger, Baden has purchased and restored a sheep ranch in Montana that was "all gulleys and erosion, naked of fence or building," according to the Wall Street Journal. He has contributed to the Sierra Club, the Audubon Society, and the Wilderness Society. He was at one time director of the Environmental Studies Program at Utah State University.

When he first came to Montana State he had little understanding of the problem-solving ways of the market. He credits Stroup with that enlightenment. In his first year at MSU he took on Milton Friedman's proposal gradually to sell off all national forests. Baden's concerns over biotic diversity and watershed maintenance were hard questions even for Professor Friedman, but Baden has gone on to explore the economic approach to such concerns and now shares Friedman's belief in the superiority of private over government management of the forests.

Baden overflows with examples of the market taking care of the ecosystem better than the government. One interesting case is the control of water pollution in Scotland. The Scots have a long tradition of love for the art of fishing, which of course requires high water quality. How do they do it? Not by "a lot of agencies running around trying to enforce laws," says Baden. Such agencies are "totally unable to be site-specific." Instead, "they simply have property rights in the streams.…Some sites sell for many thousands of dollars. If someone degrades the stream, they have done actual damage—tort damage—to the owner of the rights." The happy outcome is that Scotland's streams are full of trout and salmon.

Closer to home, Baden points out the result of government management of Rocky Mountain forest lands. "It's important to understand," he notes, "that God is not especially interested in growing trees in the Rocky Mountains." The combination of slow growing time and difficulty in building logging roads makes the Rocky Mountains naturally unattractive to loggers. Baden points out that 90 percent of the erosion associated with logging is actually caused by access roads. But when the Forest Service is in charge of deciding where and how much timber can be cut, it's done largely on political grounds. So logging in the national forests is divorced from the costs of doing so. "We find that we are subsidizing the destruction of Rocky Mountain forests.…Weyerhauser would never log there." In one case that Baden researched personally, taxpayers paid $84,000 per 1,000 board feet of timber removed from a forest. The market price at the time was about $42 per 1,000 board feet.

Though environmentalists tend to respond with shock to the free-market policies that Stroup and Baden espouse, both of the scholars are firmly convinced that there is a natural coalition, yet unformed, between libertarians, environmentalists, and fiscal conservatives. Their literature is replete with case studies in which expensive bureaucratic policies have contributed to the destruction of the environment. To those of us genuinely concerned about today's ecological issues but stifled by the standard "environmentalist" answers, the center's focus is a breath of fresh air, a breeze that blows from private property in the mountains of Montana.

Patrick Cox is a free-lance writer.