Environmentalism

How Markets and Property Rights Can Protect Nature

It's natural-and wrong-to assume greedy capitalists will run amok and destroy the Earth unless stopped by regulation.

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Tobi Nielsen/Flickr

Last week I said the Environmental Protection Agency (EPA) has become a monster that does more harm than good. But logical people say, "What else we got?" It's natural to assume greedy capitalists will run amok and destroy the Earth unless stopped by regulation.

These critics don't understand the real power of private ownership, says Terry Anderson of the Property and Environment Research Center. "Long before the EPA was a glint in anyone's eye," said Anderson on my TV show, "property rights were dealing with pollution issues."

The worst pollution often happens on land owned by "the people"—by government. Since no one person derives direct benefit from this property, it's often treated carelessly. Some of the worst environmental damage happens on military bases and government research facilities, such as the nuclear research site in Hanford, Washington.

Worse things may happen when government indifference combines with the greed of unrestrained businesspeople, like when the U.S. Forest Service lets logging companies cut trees on public land. Private forest owners are careful to replant and take steps to prevent forest fires. Government-owned forests are not as well managed. They are much more likely to burn.

When it's government land—or any commonly held resource—the incentive is to get in and take what you can, while you can. It's called the "tragedy of the commons."

"No one washes a rental car," says Anderson, but "when people own things, they take care of them. And when they have private property rights that they can enforce, other people can't dump gunk onto the property."

That's why, contrary to what environmentalists often assume, it's really property rights that encourage good stewardship. If you pollute, it's your neighbors who are most likely to complain, not lazy bureaucrats at the EPA.

"Here in Montana, for example, the Anaconda Mining Company, a copper and mining company, ruled the state," says Anderson. "And yet when it was discovered that their tailings piles (the heaps left over after removing the valuable material by mining) had caused pollution on ranches that neighbored them, local property owners took them to court. (Anaconda Mining) had to cease and desist and pay for damages. … They quickly took care of that problem." They also restored some of the land they had mined.

Property rights and a simple, honest court system—institutions that can exist without big government—solve problems that would be fought about for years by politicians, environmental bureaucrats, and the corporations who lobby them.

In fact, it's harder to assess the benefits and damages in environmental disputes when these decisions are taken out of the marketplace and made by bureaucracies that have few objective ways to measure costs.

Markets even solve environmental problems in places where environmentalists assume they cannot, such as oceans and other property that can't be carved up into private parcels.

Environmental bureaucrats usually say, to make sure fishermen don't overfish and destroy the stock of fish, we will set a quota for every season. That command-and-control approach has been the standard policy. So bureaucrats regulate the fishing season. They limit the number of boats, their size, and how long they may fish.

The result: fishing is now America's most dangerous job. Fishermen race out in all kinds of weather to get as many fish as they can in the narrow time window allowed by regulators. They try to game the system to make more money. Sometimes they still deplete the fish stock.

But Anderson points out that there is an alternative. "In places like New Zealand and Iceland … we've created individual fishing quotas, which are tradable, which are bankable, which give people an incentive to invest in their fisheries." Because the fisherman "owns" his fishing quota, he is careful to preserve it. He doesn't overfish because he wants "his" fish to be there next year.

The moral of the story: when possible, let markets and property protect nature. That avoids the tragedy of the commons.

NEXT: Mary Landrieu and the Problem With Washington

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  1. It’s natural to assume greedy capitalists will run amok and destroy the Earth unless stopped by regulation.

    Well, they will! Didn’t you see that movie where a corporation invaded this entire planet of blue people and their main goal was to shoot down the biggest tree in the forest with a guided missle! This is exactly what will happen if we let these robber barons run amok again!

    1. To be fair I wanted all the blue people to be killed by the end of the movie. And James Cameron to be beaten. You should have just called it fern gully part duex Cameron!

      1. “You should have just called it fern gully part duex Cameron!”

        Thank you!

    2. I thought that was a documentary about libertarians.

  2. Some of the worst environmental damage happens on military bases and government research facilities, such as the nuclear research site in Hanford, Washington.

    Well, yeah. I mean, who’s going to enforce the law when the government ignores it?

  3. Everyone knows communists take much better care of the environment

  4. I think Stossel should move onto more advanced topics, such as Coasian Bargaining 201, and Theory of Liability and Risk 302.

  5. In fact, it’s harder to assess the benefits and damages in environmental disputes when these decisions are taken out of the marketplace and made by bureaucracies that have few objective ways to measure costs.

    Well, Stossel, in fairness to the bureaucracies, there are NO objective ways to measure costs outside a market system. NONE. ZERO. ZILCH. Prices are market signals, which means there are NO prices outside a market. NONE.

    1. Sort of. The government’s inherent ability to overspend and otherwise piss other people’s money down a rat hole stems from the fact that their pissing other people’s money away. That and they have a banking cartel.

      They still have access to prices produced by the rather distorted market. But the Mises thesis, while true, still discussed the real influence of prices from outside the non-market system, as in the case of the Soviet using Sears catalogs as a stop gap measure to keep existing.

      1. Most prices in an industrial economy are not set by markets, but administratively. In other words the American economy is primarily fixprice rather than flexprice.

  6. ” it’s really property rights that encourage good stewardship”

    Isn’t there a point of diminishing marginal returns? Or does the the author believe good stewardship increases with the amount of property owned? I suspect there is a limit to property ownership beyond which good stewardship is no longer increasing appreciably.

    1. mmmm.

      is that suspected limit suspected to be higher or lower than ‘collectively-owned’ (to use a euphamism) land?

      1. I think a small piece of collectively owned land could be well stewarded. That collectivity could be a married couple, a profit seeking corporation or even a government. Small is the key word, and whatever else, nature, the earth’s atmosphere, the earth’s oceans are NOT small. I suspect that by the time the earth’s atmosphere is turned into property, those laws of diminishing returns will have kicked in.

    2. “a limit to property ownership beyond which good stewardship is no longer increasing appreciably”

      That’s one big glaring reason why governments suck so badly at land management.

    3. I think the limit is wherever property rights begin to meet arbitrary restrictions.

      1. The human capacity to focus attention is finite. The larger the property, the weaker the stewardship. That would be my off the cuff explanation.

        1. How about the larger number of people claiming ownership?

          For example, DisneyWorld vs a public park?

          1. With more people, you get more hierarchy, finer gradations of labour, more bureaucracy, and less freedom.

            I don’t see how Disney and a public park are comparable. Disney puts their property to make a profit for themselves and the park is meant to preserve some natural wonder or something, the profit is in its very existence and doesn’t need the hand of any capitalist or entrepreneur to improve it.

            1. I was speaking more generally in terms of public parks, which are not all meant to preserve natural wonder, or something.

              For example, central park, which was developed by the city purchasing the land for $5 million in 1853, quite a lot back then. The park was unnaturally created by human minds and hands, with horse tracks, walking tracks, fountains, etc. I’m not sure the lack of all that was exactly the problem of every city taxpayer who forked over the $5 million.

              In terms of size, DisneyWorld is roughly three times as large. Therefore, if the larger the property, the weaker the stewardship, then I assume that DisneyWorld should be stewarded much more weakly than central park.

              Yet, almost immediately after opening, central park experienced an almost immediate decline, and has had periodic declines since then. I guess the taxpayers and their elected management weren’t quite as motivated as they needed to be. Then again, a huge city budget is really just a great big commons, with it’s associated tragedies.

              The purpose of a national preserve can be whatever the government declares it is. While it’s existence may not require improvement, it does require maintenance, or else the federal park budget would be $0. So, the profit of its existence does have a cost. Does that cost reflect it’s value to those who pay it? And, do those they pay it, actually profit? I’d be willing to believe they did, if they had more direct, voluntary say in the matter.

              1. Don’t get me wrong: I like the direction that you’re going.

                I mean, if the larger the property, the weaker the stewardship, then what quality of stewardship should we expect for the $2.8 trillion in annual tax revenue, representing our collective property, that the governments stewards for us? Or the $3.5 trillion in annual spending, which we’re all collectively responsible for? Or the 2.27 billion acres (28% of the total) that we all own as federal land, managed by the government?

                Large, indeed, and not terribly well-stewarded. Perhaps your theory holds after all, just at the extremes.

              2. “then I assume that DisneyWorld should be stewarded much more weakly than central park.”

                Not a good assumption. Diminishing marginal returns tells us that at some point increasing size won’t result in increasing stewardship, not that this point lies somewhere between central park and Disney world.

                I think these places have a spiritual value to many people and their significance is not enhanced to a great degree by voluntarily paying for their maintenance. There was a Hollywood movie made about a family going to The Grand Canyon some time back, even had a black guy in it to give the thing a whole racial angle. For these people, the pilgrimage, a time-consuming and somewhat arduous journey, to get to the site is payment enough.

                1. mtrueman:

                  “then I assume that DisneyWorld should be stewarded much more weakly than central park.”

                  Not a good assumption. Diminishing marginal returns tells us that at some point increasing size won’t result in increasing stewardship, not that this point lies somewhere between central park and Disney world.

                  You’re forgetting the first part of that sentence, which was a direct quote of your argument:

                  Therefore, if the larger the property, the weaker the stewardship, then I assume that DisneyWorld should be stewarded much more weakly than central park.

                  If that’s a bad assumption, then it seems like weak stewardship is more than a function of size, then, since DisneyWorld is so much larger than central park. I’m glad that wasn’t my assumption, based on a theory I didn’t assert.

                  I’m glad I never made the argument that increasing size increases stewardship.

                  1. “then it seems like weak stewardship is more than a function of size,”

                    Yes, I think that is true, quality of stewardship also depends on the quality of the stewards, how dedicated they are. But size is also an important factor.

                2. mtrueman:

                  I think these places have a spiritual value to many people and their significance is not enhanced to a great degree by voluntarily paying for their maintenance.

                  Yeah, most costs themselves don’t enhance the experience of the payer, especially when compared to the alternative of having the exact same experience for free.

                  For these people, the pilgrimage, a time-consuming and somewhat arduous journey, to get to the site is payment enough.

                  Good for them. I’d like a mansion in Hawaii. For me, it’s a spiritual thing, to live in the islands, and, for me, the long, arduous trip to Hawaii is payment enough.

                  When does society chip in and get me my mansion?

                  1. “When does society chip in and get me my mansion?”

                    Nobody has to chip in to get a Grand Canyon or Hawaiian Island. They already exist, as I pointed out before. Your spiritual path might need a little alteration, as you don’t seem to be able to complete it without depending on others. Otherwise, my advice: whine. It might get you what you want. A very under-rated tactic.

                    1. mtrueman:

                      Your spiritual path might need a little alteration, as you don’t seem to be able to complete it without depending on others.

                      You know, I think you’re exactly right. I am now going to choose a path based largely on individualism and self-reliance.

                    2. Even so, if you live in society you will probably be called on to compromise and sacrifice, and pay taxes as well.

  7. This is not quite on point but in the same vein:

    There is one area where I can’t quite reconcile libertarian principles with my feelz. I generally think the government is unable to competently manage, well, anything really. I also strongly believe in owning property and not having that property confiscated by the state.

    And then the feelz kick in… I’ve hiked many miles on the Continental Divide Trail and have spent some of the best moments of my life canoeing and catching smallmouth bass out of spring-fed Ozark streams. I am afraid that if these areas were not preserved by the state, they would be partitioned, fenced off, and the public would not be able to enjoy these treasures. Can there be property so unique that it is implied that the state must protect it? Glacier National Park? Yellowstone? What are the counterarguments to my concerns? It might be as simple as: “Tough shit, Griff. Learn to enjoy golf and yard games.”

    1. An argument against it could go like this:

      In order to preserve the national park, the government has to claim effective ownership of it. By what right does it do that? No one is allowed to take the unused land and build, say, a house, because government says “we” all own it, and can’t use it. And, now, we all have to take care of it, preserve it, enforce it, etc. whether or not we really want to, or want to pay for that.

      So, right now, people are paying to maintain national parks that really don’t have a choice in the matter.

      Therefore, people are enjoying national parks by having all the costs of that park distributed across people who may never enjoy that national park, and may never value it, in any particular way. Furthermore, the same people are prevented from using the national park in any way they might want, like building a house. Therefore, even though “we all own the national park”, we really don’t.

      So, without the government, the people who might want to keep the national park the way it is would have to pool resources, purchase it, and collectively decide to preserve it. The government just allows them to preserve the national park through government fiat, without having to bother purchasing it, and distributing the costs across people who may completely disagree with the idea and receive no value from it.

      It’s kind of like the space shuttle: yeah, everyone loves it and misses it, yet, somehow, no one wants to pitch in and launch one with donations.

      1. That seems rational to me. I like the space shuttle analogy.

      2. “No one is allowed to take the unused land and build, say, a house, because government says “we” all own it, and can’t use it.”

        Yet I’m sure you can find (or can’t find, more likely) people who are doing exactly that off in the woods somewhere. I wonder how many people are living in public lands. Maybe they’re more public than you give them credit for.

        1. Oh, I’m sure if you want to live in a tent for the rest of your life, and bathe in streams of natural water, you can get away with it. I give them credit for being that public.

        2. My brother and I talked about that on one of our hikes in the Rockies. It seemed feasible to set up a home nettled in the woods somewhere and live off the land. I don’t know how anyone would ever find you in some of those areas. Tough winters though…

          1. Ooooops: “nestled”

            1. If you’re getting nettled, you chose the wrong place to camp.

      3. Well, a lottery would solve that problem. Just how warships were funded without taxation.

      4. People have a perfectly fair choice in the matter. Let men run campaigns on privatizing national parks and see how popular the idea is.

        National parks are in and of themselves arguments for why capitalism must be constrained, and some goods protected from it.

        Sure you may never want to go there. Who gives a shit. Unless you’re an anarchist you believe in socializing some things. So start your anti-park movement or deal with the fact that most people think it’s important to protect certain natural areas from capitalist exploitation.

  8. “They also restored some of the land they had mined.”

    I think SOME is the important word here.

    The writer of this article should ask the Kochs for an all-expense paid tour of the vast mining areas all around this country……left over from 200 years of “private enterprise”. He doesn’t address even the simplest issues – such as what happens when the Corporations he holds so dear go belly up. I can tell you what happens….others (we the people) pay. Sometimes forever….

    I’ve seen shell corporations hidden behind 40 or more transfers…it takes a lot of lawyers a lot of years to even start putting the pieces together.

    I have a better idea. Let’s stop these abuses before they get too far…by using regulations. We’ll start an agency and call it the EPA.

    1. Well…you stole my thought. Thief. 🙂

      I agree. The word “some” is way to vague. How about “a little”?

      Just take a drive into the hills of West Virginia to see mountain-top removal or drive I-70 just west of the Ohio river to view the moonscape left by strip mining. It’s all irreplaceable.

      When *I* think about libertarianism…the protection of individual rights and from being harmed by others for doing the same…I have and will always consider the environment on equal footing with any of us. It can’t stand up for itself, so some of us have to do that for it.

      That said, the EPA has become a nanny-state, power-hungry monster that needs to be killed. However, something needs to fill that void. Do we assign pro-bono attorneys to act on behalf of a national park or nature preserve or national landmark? I don’t know. But it’s an interesting discussion none the less.

      1. Let’s see – pro-bono lawyers vs. hundreds of billions in Koch, Oi and Resource Extraction $$$.

        I wonder…..who will win??

        IMHO, the EPA needs to get even bigger. Of course, that doesn’t mean they can’t do a better job of being reasonable….

        The EPA as well as the baby boomers and their ideals have turned things around since the 1970’s – water and air is much cleaner and things are much more efficient. Of course, it’s easier to complain about the “nanny state” than it is to consider quality of life, those who didn’t die or contract man-caused diseases, etc.

        Gubment is not an easy thing. It’s complex. It’s inefficient. But it usually beat the alternative by a long shot.

  9. Libertarians: usefully idiots of the worldwide exploitation of the people by the money

  10. I think it’s time we all admit that John Stossel’s value here is fame and not intelligence or eloquence.

    1. Those who exalt Faux news and their propagandists and paid shills aren’t known for their reason, logic or intelligence. They read just about as far as “it’s wrong to assume greedy capitalists will ruin things” and then pat themselves on the back while crying “dittos”

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