The Freeman 1989 - The Ludwig von Mises Institute

40 THE FREEMAN. JANUARY 1989that other Indians successfully turned to a systemof private rights to protect other animalssuch as beaver, which did not have the nomadiccharacteristics of Plains buffalo.Of course, common ownership does not alwayspose an environmental problem. At earlierperiods of human history, when human beingswere scarce, grazing land could be held in common.However, even with extremely low levelsofpopulation, people could barely subsist on it!Similarly, as long as Indians didn't have horsesor weapons such as guns, they couldn't threatenthe buffalo. But the Indian standard of livingwas extremely low and their population sparse.Once people got beyond a primitive standard ofliving, common property became a seriousproblem, one that private ownership corrected.Private property assures accountability. Aperson who owns property will reap the rewardsof good stewardship and bear the consequencesof poor stewardship. The owner who lets hisland erode pays the price because the value ofthat land sinks as soon as the erosion becomesvisible. The owner who protects the land enhanc~sor sustains its value. In general, privateproperty makes good stewardship pay.When property rights are insecure or incomplete,so that someone else bears the costs orreaps the rewards, accountability is missing.That is the case with the Amazon rain-forest.In Brazil, government policies are encouragingdeforestation of the rain-forest through subsidiesand tax credits. The biggest effect is thatowners of land are reaping the rewards of ownershipwithout paying the costs, and thus areencouraged to act irresponsibly. A study by TheWorld Resources Institute (by no means a groupcommitted to private property) concludes thatcattle ranching and settlements by small farmersare the major factors behind deforestation. Bothof those activities are heavily subsidized by thegovernment. Author Robert Repetto says thatthe subsidies encourage the livestock industryto cut down trees to promote pastureland andencourage settlers to tum forests into farmland.(In addition, the government subsidizes the forestproducts industry.) "By supplying virtually- free money, the federal government invited investorsto acquire and clear large tracts of forestedlands," says Repetto.Under a system of true private ownership,where owners were required to pay the full costof their activities, the Amazon forest would befar more likely to be preserved. Yes, treecuttingwould occur, but not on today's scale.With so much forested land, some conversionof trees to pasture does not pose an environmentalproblem; some land undoubtedly will bemore productive as pasture. However, wherecutting is excessively costly, owners would refrainfrom cutting trees. In the U.S. , recent economicresearch has shown that contrary to receivedwisdom, cutting down forests in theMidwest during the 19th century was not waste-_ful. The trees were simply quite valuable whencut; to keep them standing longer would havebeen costly to society.Furthermore, in a system of private property,individuals who believe that the forests will bevaluable in the future have a strong incentive toprotect them. Some might be speculators whobelieve that the value of endangered species inthe future will outweigh the current cost of preservingthe land from cultivation. Under thepresent scheme in Brazil, the cost of preservationis high because taxpayers are subsidizingso many of the costs of devastation.Others who would preserve the rain-forest ina private property system are likely to be privategroups and individuals concerned about ecologicalbalance. In fact, today, non-profit organiz~tionssuch as the World Wildlife Fund andThe Nature Conservancy are taking steps tosave tropical forestlands in Latin America.(Since they have to work with governments,however, they face a number ofdifficulties theyprobably wouldn't face if the land were privatelycontrolled.)In conclusion, what causes environmentaldestruction is the lack ofprivate property rights,when resources are owned in common or by thegovernment. Strengthening private propertyrights will improve the chances for wildlife andforests.DJohn Hospers replies:Jane Shaw seems to assume that my quarrelis with private property. But it is not:the deforestation of the Amazon basinwould be an ecological tragedy regardless of bywhom or under what auspices it is done,whether by private owners, communal owners,or government owners. If Brazil had a Home-