As Others See Us

Published: 
Sunday, December 1, 1996

Paradise Valley, Montana: Last light on the Absaroka Mountains. Photo by Bill Young
Paradise Valley, Montana: Last light on the Absaroka Mountains. Photo by Bill Young

Each year, PERC holds a conference in Montana for journalists. The following article, “Trading Park Futures,” from the September/October 1996 issue of
National Parks, describes one journalist’s view of the “free market environmentalism” message. PERC responds to the statements in bold on p. 11. (This article, slightly shortened, is reprinted with permission of National Parks.)

It is an October morning at the Mountain Sky Guest Ranch near Bozeman, Montana. The cold air smells of pine, and steam rises from a hot tub with a view of snow-covered peaks across the valley. This is an exclusive place, $2,000 a week per person, where I cannot afford to vacation.

But I am not paying for this trip. This one is on PERC – the Political Economy Research Center – a conservative think tank that works out the economic theory behind the property rights movement. The “product” PERC is selling during the next three days is something called “free market environmentalism.”

What am I, an environmentalist, doing here? Environmentalism has lost its way, and I am here to find out why.

PERC has played fair in arranging the program. On the left are Kathryn Hohmann, director of environmental quality for the Sierra Club, and Brock Evans, National Audubon’s vice president for national issues. On the far right is Chuck Cushman, founder of the National Inholder’s Association, which is now the American Property Rights Association. His job at the conference, he tells me, is to “shake things up.”

With the property rights association on the right and Audubon and Sierra on the left, PERC has placed itself strategically in what appears to be the rational middle. Our discussions begin from the premise that people are economic entities, motivated by financial self-interest. But the Perkies, as they call themselves, love nature, wildlife, clean water and air. They just claim they have found a way for us to have our environmental cake and eat it too.

PERC would first privatize public land. (All of it? They would not say.) Supposedly, this would be good for the environment because private owners have an economic incentive to take care of their land, which government does not. It would also lead to more efficient use of resources. What is wrong with the Perkies putting most of their eggs in the private property basket? In a way, nothing. I, for one, cherish the rights that go with my own .9 acres of Minnesota hillside-the right to be compensated if the government takes my property, and the right to exclude others. Property rights are a cornerstone of the American democratic system.

However, PERC's arguments reveal an almost mystical faith in the market. Allocate resources to those who will use them wisely by making a profit, and those resources will live forever.

History tells a different story. People act in their own interest – usually the short-term-profit kind. As E. J. Dionne says: "A capitalist society depends on noncapitalist values . . . to hold together and prosper." The free marketeers ignore the fact that a successful market society is "built on an older moral logic that predates capitalism."

Every enterprise – and everything is an enterprise in free market environmentalism – must pay its own way. Since recreation is the most highly subsidized of all the uses of public lands, recreational users, says PERC's executive director Terry Anderson, are "the biggest pigs at the trough." So national parks must be made to support themselves through user fees.

They are right about one thing – recreational users should pay more. A visit to a national park costs less than two movie tickets. But they are also mixing apples and pine cones. Recreationists use public lands in a renewable way, as members of a nonexclusive club – U.S. taxpayers. Other subsidized users, miners and ranchers who often pay a fraction of market value for the right to use public land, use public resources for their own profit.

PERC also wants to get rid of "burdensome" environmental laws and regulations. These handcuff the market, halting or slowing economic activity that could create wealth and jobs that would, in tum, protect the environment. And besides, regulations are expensive, and they do not work.

No doubt these charges are true some of the time. But the property rights folks sidestep the debate by ignoring the undeniable improvement in the environment since laws such as the Clean Air and Clean Water acts were passed 25 years ago. Maybe it is time to look at new approaches; perhaps the market can be an important factor protecting the environment. But unless we acknowledge the successes of the regulatory approach, along with its shortcomings, we are ignoring hard-won knowledge of what does work. Let's remember that these laws came into existence after our last bout with unregulated industry, because Americans were disgusted by sights such as the Cuyahoga River in flames and human excrement floating in Lake Erie.

PERC advocates the carrot of economic incentives in place of the stick of regulation. Rather than penalize people for violating the Endangered Species Act (ESA), free market environmentalists would pay them to comply. Under the current system, a rancher who finds wolves denning on his property might be tempted to kill them to protect his stock and avoid the federal interference triggered by the ESA. Free market environmentalists would pay him to let the wolves stay. Fair enough – pay to cover legitimate losses – if there are any. But can we really afford to start paying people to do the right thing?

Even if I think about free market environmentalism in terms of profit and loss, I find it disturbing. Bottom line, who will profit?  The individuals and corporations with the wealth to buy up big tracts of federal land. And when we make that exchange, we trade the rights and privileges of millions of people, including future generations, for the rights of a single individual. After all, the real "little guy" is not a rancher or lumber company. He is someone who owns a home, or maybe no property at all. He will find himself locked out of lands that used to be his. Private Property, No Trespassing. In a country where the growing gulf between rich and poor worries even conservatives such as Pat Buchanan, how can another break for the rich make sense?

Who will profit by relaxing environmental laws? Polluters, certainly. But maybe businesses weighed down by too much paperwork will also be better off. Maybe enough jobs will be created to out­ weigh the many that will be lost. Even so, despite arguments, I can find no basis for PERC's faith that we will have cleaner air and water and better protection for endangered species if the market runs the show – even if we bid for the landowner's self-interest with our dwindling public funds.

Whether we like it or not, the national environmental discussion is turning in PERC’s direction. When we enter these discussions, we cannot forget that the national parks, forests, grasslands, seashores are not “federal land.” They are our land, yours and mine. If we lose them, we will never get them back. We must also remember that government is not bureaucrats. Government is us, and that simple notion is the foundation of democracy.

Let’s refuse to base our policy decisions on economics alone. Fifty years ago, Aldo Leopold gave us a better standard: “Quit thinking about decent land-use as solely an economic problem. A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise.”

Carol Estes is a freelance writer who lives in Minnesota.

PERC Responds:

PERC would first privatize public land. (All of it? They would not say.)
For years, Perkies have recommended that federal land that produces mainly commercial products should be privately owned. Subsidies would disappear, efficiency would rise, and the treasury would gain. Perkies have also recommended that parkland be given to environmental groups or managed by a not-for-profit trust. While privatization is not our main message, we believe that nearly every goal now held for federal land would be advanced if more land were in private hands. – Jane Shaw

People act in their own interest – usually the short-term-profit kind.
Yes, whether in government or the private sector, people often have short-term goals. However, when land is privately owned, short-term goals include the protection and enhancement of the land now. Preventing erosion and taking other future-oriented conservation measures increases land value right now because the value of land (or a standing forest or a building) is determined by the expected future benefits of that land, net of the costs required to enjoy those benefits. Conservation is an investment that produces future net benefits. – Richard Stroup

Recreationists use public lands in a renewable way, as members of a nonexclusive club – U.S. taxpayers.
Like it or not, hugging a tree entails costs. Recreationists may not damage trees, but if their use of a forest means that those trees cannot be used to produce homes, paper and other goods that society values, recreationists are imposing a cost. If recreationists don’t have to pay a market price, as commodity users do, they send a misleading signal to society about how scarce wood products and recreation are. – Don Leal

But the property rights folks sidestep the debate by ignoring the undeniable improvement in the environment since laws such as the Clean Air and Clean Water acts were passed 25 years ago.

We have much – but not enough – to celebrate. Data cited by Paul M. Portney of Resources for the Future and Brookings Institution economist Robert Crandall tell us that air quality was improving more rapidly before the 1970 Clean Air Act than since the act was passed. Empirical studies indicate that improvements since then could have been achieved at 30 to 40 percent less cost if market solutions had replaced command-and-control.

Even so, significant gains have been made over the last 25 years. Lead additives have been banned in gasoline, leading to a sharp decline in lead oxides. Rising fuel costs have spurred energy conservation, reducing sulfur and nitrogen oxides. Regulations have reduced auto emissions. Some river, lakes and streams are markedly improved.

Having spent hundreds of billions annually to accomplish environmental goals and having seen a smokestack economy transformed into an information society, should we expect any less? PERC people think we should expect more, and greater use of markets and property rights incentives can deliver more. – Bruce Yandle

But can we really afford to start paying people to do the right thing?
There are two different situations to keep in mind – pollution on the one hand, and providing a good for the public on the other.

No, we should not pay people to stop doing the wrong thing such as harming people by polluting. But if we want the use of private land to provide habitat for our animals, such as wolves, it is only fair that we pay the landowner’s costs of having our animals there, unless those costs are very small.

Most landowners will be happy to host most birds and other animals without payment, if they do not have to worry about losing control of their land. But right now, since having a listed animal on their property can bring costly and uncompensated interference, landowners will manage their land to keep such animals out. Under these circumstances, we should purchase their cooperation. – Richard Stroup

Bottom line, who will profit? The individuals and corporations with the wealth to buy up big tracts of federal land.
On the contrary, U.S. citizens will be the big winners. They will receive the money for these tracts of land. Currently, the public is forgoing billions of dollars each year in revenues that could be obtained if the government lands were sold and the funds invested. Worse, the public must also pay billions of dollars each year to the agencies that manage these lands.

The U.S. Forest Service managing roughly $200 billion worth of land, spends so much and charges users so little that taxpayers must pay $2 billion every year. – Richard Stroup

Who will profit by relaxing environmental laws? Polluters, certainly.
Let's be realistic. Few people want relaxed environmental goals. Firms that thumb their corporate noses at the environment will be punished by their customers, owners, employees and communities. Indeed, industrial firms are far ahead of government-owned facilities in cleaning water, air and hazardous waste. Would that the U.S. government would meet their standards.

Most firms, in fact, prefer to have EPA regulation than be subject to the common law protection of environmental rights that preexisted the EPA. (EPA Permits allow some pollution and the penalties for violations are smaller.) Also, uniform command-and­control regulation enables an entire industry to limit the entry of new competitors who must meet stricter new source standards. It is far from clear that polluters will profit from rules that emphasize property rights and markets. But it is clear that all American people, considered together, will gain. – Bruce Yandle

Fifty years ago, Aldo Leopold gave us a better standard.
Like so many followers of Leopold, Estes ignores Leopold’s pragmatic “conservation economics.” Leopold also wrote about the limits of government: “We tried to get conservation by buying land, by subsidizing desirable changes in land use, and by passing restrictive laws. The last method largely failed and the other two have produced some small samples of success.”

Leopold understood that “if it pays, it stays.” He wrote: “Conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.” If those of us who value environmental amenities are willing to pay either private landowners or public land managers, we will get better land stewardship. Without economics as the guiding principle for public land management, we can only hope that enlightened bureaucrats will do what is right. In the modern world of political land management, I will put my eggs in the economic basket. – Terry Anderson

Carol Estes, a freelance writer from Minnesota, attended PERC’s journalism conference in 1996. She published “Trading Park Futures” in National Parks, describing her view of free market environmentalism.

A PDF of the original PERC Reports article is here

Media Source: 
National Parks
Before joining PERC, Jane Shaw was a journalist who had developed an uneasy feeling that much of the commentary about environmental policy that she read--and even some that she wrote--was tilted in the wrong direction. The usual solution to an environmental problem was to turn it over to the government. She had become uncomfortable with this...
Read More > More Articles by Jane Shaw >
In the rush to protect the environment at any cost, individual rights have been violated and ignored. Richard L. Stroup advocates restoring people's rights against both polluters and against false claims of damage as the best way to ensure environmental protection. Both measures would increase the effectiveness and the marketability of further...
Read More > More Articles by Richard Stroup >
Leal's research on natural resources and environmental issues spans nearly 20 years. His current focus is on preventing over-harvesting of marine resources and restoring ocean fisheries.Leal is working to build support for individual fishing quotas (IFQs) and fishing cooperatives as more effective alternatives to the current regulatory approach to...
Read More > More Articles by Donald Leal >
Bruce Yandle is a consultant, writer and speaker on economics and political economy. He is Mercatus Center Distinguished Adjunct Professor of Economics at George Mason University and participates regulatory in the Center’s Capitol Hill lecture series. Yandle is Dean Emeritus of Clemson University’s College of Business & Behavioral Science and...
Read More > More Articles by Bruce Yandle >
Terry L. Anderson is a senior fellow at PERC and the former President and Executive Director of PERC as well as the John and Jean De Nault Senior Fellow at the Hoover Institution, Stanford University. His research helped launch the idea of free market environmentalism and has prompted public debate over the proper role of government in managing...
Read More > More Articles by Terry Anderson >