Archive for the ‘markets’ Category

[Update re: Truthiness] Property rights? Why George Will WON’T be consistent on climate change when bashing climate "Malthusians"

February 18th, 2009 No comments

[Update below]

George Will has gifted us with a thoroughly confused op-ed in the Sunday WaPo

Will predictibly trots out the 1980 bet that Paul Ehrlich lost to Julian Simon over the prices of minerals and commodities – but fails to note that the reason that Simon won that bet was that people own land and that markets functioned to both to change demand and to elicit further supply.  None of this logic holds true for unowned, open-access resources – like the global atmosphere and the climate it modulates – as there simply are no property rights or markets in the air.  Until there are, people with legitimate preferences as to climate and man’s affect on it have little effective ways of expressing those preferences.

I made a few further comments at the “Denialism” Science Blog, which has a post up that points out that Will has greatly overstated the case for scientific concern over cooling in the 70s.

I think Will simply has a difficult time changing his mind,
particularly given his conservative leanings – he doesn’t want more
government programs – and the fact that climate change doesn’t happen
at the same speed as weather.

I sympathize with his complaint about alarmism – after all, that’s
how Bush got us into Iraq, and it’s how Obama justified the stimulus
package – but there is, after all, cause for concern about climate
change and it’s very difficult to see as a problem that markets
themselves can be expected to address – as the atmosphere is shared
globally and no one has any property rights in it.

However, Will has had better moments, such as last June when he
argued FOR a carbon tax
– at least as a better option to cap and trade
and tech subsidies:

This should not be ignored by either the skeptics or the AGWers.

However, this latest editorial is indeed disappointing, because it
turns its back on suggesting or considering any of the “no regrets” or
pro-free market policies that ought to be explored as possible win-win common ground
betweem “alarmists” and “skeptics”, as I keep noting:


[Update:  On top of the points above, respected science writer Carl Zimmer at Discover Mag has noted in a post titled “George Will: Liberated From the Burden of Fact-Checking” that George Will also has his data wrong on the extent of sea ice, so much so that the data center that Will referred to posted their own correction of Will.

Zimmer further notes that Will is using a metric (the sum of
northern and southern hemisphere sea ice extent) that actually masks
the degree of climate change and melting.  Climate scientists have specifically noted:

In the
context of climate change, GLOBAL sea ice area may not be the most
relevant indicator. Almost all global climate models project a decrease
in the Northern Hemisphere sea ice area over the next several decades
under increasing greenhouse gas scenarios. But, the same model
responses of the Southern Hemisphere sea ice are less certain. In fact,
there have been some recent studies suggesting the amount of sea ice in
the Southern Hemisphere may initially increase as a response to
atmospheric warming through increased evaporation and subsequent
onto the sea ice. …

we urge
interested parties to consider the many variables and resources
available when considering observed and model-projected climate change.
For example, the ice that is presently in the Arctic Ocean is
younger and thinner than the ice of the 1980s and 1990s. So Arctic ice
volume is now below its long-term average by an even greater amount
than is ice extent or area
.  (emphasis added)

Is George Will becoming a master of truthiness?]

WSJ on "green" power: Us Grinches HATE Green indoctrination! We also don`t like consumer choice and free markets!

December 30th, 2008 No comments

A post on the Wall Street Journal`s enviro blog, Environmental Capital, reports on one disgruntled reaction to a recent school play called “Santa Goes Green”, and reports on a new children`s book (and website) by the same name.

The post closes with the sarcastic note, “No word yet on what kind of electricity is powering the web site’s servers. “

One wonders if the WSJ has heard of consumer choice or free markets (and is in favor of supporting either), since it doesn`t even raise the issue of parental/consumer preferences, which underlie the subject of the post.  Those who oppose the message of the book can peruse it and simply refuse to buy it for their child if they wish.  Similar principles apply to their child`s school play: they have some ability to object, although the degree of influence they may have may depend on whether the school is public or private.  Surely this would be an interesting point worth having readers think about.

Finally, of course, there is the final note of sarcasm – why does it not occur to the author to consider the legitimacy of consumer preferences for “green” power, and the difficulties that consumers face, in a regulated power market, for buying electricity sourced (and priced) the way they wish?  As Lew Rockwell points out, with truly free electricity markets, people would be able to put their money where their preference lie.   This is exactly the “Smart Grid” market that Google and GE have recently been targetting.

Why is the WSJ uninterested in discussing free markets, much less making the point that “green” consumers ought to be fans of free and competitive electricity markets?  So much easier to diss others` preferences, than to consider how to make allies for the free markets that would better allow all to satisfy their own preferences!

[Update] Mind Games/Luboš Motl: how an absence of functioning markets means that I’m right, but you’re a delusional, neurotic "zealot"

July 7th, 2008 No comments

[Update below]

My last piece (on Bret Stephen‘s straight-faced but ridiculous dismissal in the WSJ of all concerns about climate change as a “sick-souled religion” and a “nonfalsifiable hypothesis, logically indistinguishable from claims for the existence of God”) brought the following piece of mail, from Luboš Motl, a theoretical physicist who blogs frequently from a contrarian view on climate change.

With Luboš’ kind permission, I offer his email and my response as a further illustration of the common dynamics of misperception and tribal side-taking (as I have noted recently in the context of remarks by Nick Kristof) that feed into conflicts over unowned or unprotected resources (and abound here, where it is difficult to “see” the climate and what influences, if any, we have on it over the course of decades and centuries).

My interlocutor writes:

Dear Tom,

did you write the text? It’s just terrible. I find it extremely zealous, insulting, and avoiding the essence of all the discussions here – scientific, sociological, and others. Why the hell do you think that “scientists” have concerns? Scientists are not there to have concerns. Scientists are there to understand and predict phenomena. It is green activists and politicians who have or may have “concerns”. I didn’t find anything insulting in the WSJ piece. It was a nice text. The very fact about the frequent and completely irrational usage of words like “concern” is a *proof* of a mass neurosis, as far as I am “concerned”.

Best, Lubos

My response:

Dear Lubos:

Thanks for your comment.  Yes, of course I wrote it.  I’m not entirely surprised that you found my piece insulting, as I meant it as a put down – but of Stephens, not you.  In any case, if you did find it insulting, it’s curious that you don’t find Stephen’s piece also insulting: the most offensive aspects of my remarks did nothing but hold the mirror of psychobabble to it, which is entirely fair.  But of course most my remarks were analytical and showed how it is Stephens who is trying to dismiss all debate by ignoring all rational disagreement and attacking a broad-brush strawman that all who worry about anything are irrational.  If I failed to address science arguments for or against global warming it is because of Stephen’s failure to raise them.

It looks to me that it is Stephen’s argument that is zealous; is mine?  Sure, I care enough about this issue to write about it, but does that make me different from him – or you, who troubled to respond to me?

You say I “avoid the essence of all the discussions here – scientific, social and others”, but I’m not sure what you mean.  Is it not rather Stephens who has avoided discussing anything but the psychological, and I who have tried to point it out?

Your thoughts on scientists are interesting, too.  Are they supposed to be emotionless and amoral automatons, with no reason to actually care about their research or its implications?  Sorry, but you can’t take human nature out of the human, nor the scientist out of society – nor should we.  (If you have an opposite ideal, are you suggesting that you yourself out to stop blogging?)  Perhaps what we could consider is to stop the public funding of science and technology research, as it tends to reinforce government power and the political football of struggles over resources  – where do you stand on that?

You say that it is “only green activists and politicians” who do have concerns, but obviously that’s wrong – you have concerns, so does Stephens and Chris Horner; we all do, and we are all entitled to our own preferences, and it is natural for us to express them when the absence of markets and property rights make words the only currency by which we can express our preferences.  This a very basic observation of libertarian economics, Lubos.  So far from “concern” being a “‘proof’ of mass neurosis”, all that it shows us is that an issue is a politicized one, whereby different interest groups are fighting over the wheel of government and public opinion, since the absence of markets makes it otherwise impossible for them to express their preferences through voluntary transactions.




[Update:  Here is Lubos’ response; my further responses are in bold:]

Dear Tokyo Tom,

I apologize but I apparently agree with Stephens that those who want to create “global worries” are a priori irrational. It’s the same sentiment that leads Jehovah’s Wittnesses to predict a new coming of the Lord all the time.

TT:  While some aspects of the “Warmers” and the Jehovah’s Witnesses may be linked, the Warmers are descendent’s of those who raised awareness and fought for control of REAL pollution in the 60’s and 70’s.  Warmers also point to REAL phenomena, like increases in GHG levels, acidifying oceans, dramatic warming in the higher latitudes, pronounced climate zone shifts, etc.

They never learn anything from their failures and try to predict things that can’t be predicted and pretend that clearly very unlikely things are likely. The only different aspect of the AGW cult is that they also include a lot of scientific buzzwords but they don’t do proper science because they don’t abandon conjectures that have been falsified. In some sense, bad science is even worse than pure religion because the conclusions are equally crappy and moreover, it contaminates the good name of science.

TT:  Care to elaborate on your complaints?


You say I “avoid the essence of all the discussions here – scientific, social and others”, but I’m not sure what you mean.  Is it not rather Stephens who has avoided discussing anything but the psychological, and I who have tried to point it out?


I don’t see anything wrong with him discussing the psychological aspect. But he is doing this thing rationally, too. This AGW thing is such a big mass movement that psychology – or psychiatry – is indeed among the most relevant disciplines to study the phenomenon. You didn’t even discuss psychology, at least not rationally. Besides psychology, there are hundreds of science questions involved. But the AGW proponents tend to avoid all these “detailed” science topics, referring to “consensus” and all this irrelevant psychological crap instead – which is why psychology is so important to study them scientifically.
TT:  Stephens’ discussion of the psychology of belief in and of itself is fine.  It’s his pretense that EVERYONE who takes a different view than himself is either masking an ideology or is irrational (or both) that offends, and is obviously unsupportable.  If Stephens is “rationally” engaged in logical fallacies, then he’s being deliberately deceptive; otherwise, he’s engaged in self-deception of the type he accuses others of.


Your thoughts on scientists are interesting, too.  Are they supposed to be emotionless and amoral automatons, with no reason to actually care about their research or its implications?


Of course that an “ideal scientist” is like that because science is ideally disconnected from emotions. And of course that the “real scientist” is never like that. But a person whose main contributions are “emotions” and “concerns” shouldn’t be labeled as a scientist. He might also be a scientist in his spare time but this particular manifestation of his life is not about science, it is about emotions, politics, and activism, so it is plain dishonest to use the term “scientist”.
TT:  I would agree that a scientist may have little or nothing to add to a discussion of policy – and that others should not assume such expertise – but it is not only impractical to not refer to the credentials of a scientist who chooses to get involved in political analysis, but perhaps dishonest not to.  Moreover, scientists may of course have much to offer in policy discussions.


Sorry, but you can’t take human nature out of the human, nor the scientist out of society – nor should we.


Sorry but I find it absolutely essential to remove the emotional aspect and politics from science. If it is not taken away, it is not science. We clearly disagree about absolutely fundamental things here. Your formulation indicates that you can’t even imagine how it could be taken away – in other words, you can’t even imagine how a scientist could possibly exist. That’s too bad.

TT:  Of course I can “imagine” removing emotion and politics from science; I just believe that it is naive to assume that it is ever going to happen.  Further, there are probably good arguments to be made that science is driven by emotion and subconscious desires, so that “success” in removing them from “science” would actually yield less scientific progress, not more.  The real issue relates to the (corruptible) role science plays in group decision-making.


(If you have an opposite ideal, are you suggesting that you yourself out to stop blogging?)


I am blogging and in that role, I am a blogger. In fact, I am a kind of full time blogger, in some sense. 😉 And of course, a part of my motivation is to counteract the “activists” who are using science incorrectly. So I am, in some sense, in a similar position with the opposite sign. Unlike them, I don’t hide it. And unlike them, I think it is extremely wrong if the scientific discourse is driven largely by activists of either sign.

TT:  While your stated aims may be admirable, Lubos, they are inescapably a surface manifestation of your own policy goals and preferences.


Perhaps what we could consider is to stop the public funding of science and technology research, as it tends to reinforce government power and the political football of struggles over resources  – where do you stand on that?


Of course that I see this as a good point. Climate science is a textbook example where the “concern” written above has already materialized – the government funding has completely destroyed the scientific integrity in a whole scientific discipline. When one builds accelerators, there’s a lot of money to be paid. When one wants to research fundamental physics – string theory – one needs to hire very smart people. The same with DNA research etc. etc. But that doesn’t mean that every penny going to something called “science” is constructive. The money in climate science has been deliberately used to hire a lot of average workers and downright morons whose goal was to confirm predetermined ideological cliches. The community expanded 10-fold and not surprisingly, 90% of them are morons who are hired to promote “global warming” directly or indirectly. That’s very bad and the people who are doing these things even today should be executed as soon as possible, as far as I can say. Again, this opinion of mine is politics – it is politics trying to protect science from dirt and collapse.
TT:  Obviously we have common concerns here, although my view is that the unfortunate role of government in climate science has not so polluted the results as to wholly discredit them.  There are lots of incentives to confirm results and to correct bad work, and many organizations with quite different views and interests involved in the cross-checking.


You say that it is “only green activists and politicians” who do have concerns, but obviously that’s wrong – you have concerns, so does Stephens and Chris Horner; we all do, and we are all entitled to our own preferences, and it is natural for us to express them when the absence of markets and property rights make words the only currency by which we can express our preferences.


But it is not correct to use the word “science” to advocate concerns that cannot be substantiated by the scientific method, regardless what the proponents of these concerns are doing in their spare time.
TT:  We are currently conducting an uncontrolled experiment on Planet Earth, Lubos.  Isn’t the real question not whether “science” is involved in measuring changes, parsing through paleodata, making hypotheses and reviewing them in the face of new information, but simply how long we should let the experiment continue and accelerate uncontrolled, before we make private and collective decisions to respond to the changes, including modifying the experiment?  Because the experiment involves common resources, inescapably decisions about maintaining and modifying the experiment are unavoidable “political”, about which all have rights to express concerns, even concerns that seem to concern YOU.


This a very basic observation of libertarian economics, Lubos.  So far from “concern” being a “‘proof’ of mass neurosis”, all that it shows us is that an issue is a politicized one, whereby different interest groups are fighting over the wheel of government and public opinion, since the absence of markets makes it otherwise impossible for them to express their preferences.


That’s completely right. That’s why I fight against this pseudoscientific movement. It is about promoting some people’s interests through government regulation which is already too bad and it is even worse when science enters as a hostage.


TT:  It’s helpful to fight against pseudoscience, but that’s a fight that one should wage on all sides, not merely against those whose policy view you disagree with.  The case against pseudoscience (and wishful thinking) from the “skeptics” is quite strong.  Besides the issue of partiality, it is clearly wrong and not forthright (and perhaps deliberately deceptive) to ascribe irrationality to all those who have different preferences over how to manage the global atmospheric commons.

"Worldwatch" enviro group praises moves to water rights and markets in China

May 18th, 2008 No comments

Yingling Liu, manager of the China Program at the Worldwatch Institute, has praised recent steps by Chinese water authorities to clarify rights to water and to encourage water trading as a means to resolve serious issues over the use of water.

Here are a few key excerpts for the article (“Water Trading in China: A Step Toward Sustainability”):

“In recent years, scarcity and pollution of water have become the paramount environmental woe in China. Numerous reports and books have exposed China’s water crisis, depicting a nation suffering in the face of black-running rivers and dried-up waterways. Nationwide, the per capita availability of fresh water is only one-quarter of the world average.

“But a new regulation from the nation’s water authority may hold the key to achieving water sustainability in this thirsty country. The Interim Measure for Water Quantity Allocation, which came into effect on February 1, provides a framework for allocating water rights across provinces, autonomous regions, and municipalities that are under the direct jurisdiction of the central government. The ruling’s 17 stipulations lay out the principles, mechanisms, and practices for water allocation, potentially opening Chinese markets for water trading and enabling the use of market tools to promote conservation.

“The need for better delineation of water rights in China has become increasingly urgent. Water demands within shared river basins are frequently at conflict due to industrial expansion and urbanization. … Such competing claims are prevalent in nearly all of China’s major river basins.

“As water demands keep rising, water waste remains pervasive due to the current “open-access” nature of China’s water resources. According to statistics, in 2003 China’s utilization coefficient for agricultural irrigation water was only 0.4-0.5, compared to 0.7-0.8 in industrial countries. Water use per unit of gross domestic product was as high as 413 cubic meters, four times the world average, while water use per value added of industry was 218 cubic meters, 5 to 10 times the level in industrial countries. China’s industrial water-recycling rate was only 50 percent,compared to 85 percent in industrial countries.

“The traditional practices of promoting conservation through education, moral suasion, and technological innovation are no longer able to keep up with China’s rising water demand. By allocating water rights and introducing market-based tools, the new regulation may accelerate progress toward water saving, protection, and pollution control.”

More here:

Query:  Is this really a step in the right direction, or should it be faulted as state action in creating property rights?

Categories: China, markets, state action, water rights Tags:

Environmental Markets? Links to Austrians

December 29th, 2007 No comments

Environmental Markets?  Links to Austrians

Here’s a partial list of useful articles, alphabetically by author (further suggestions are appreciated):

Terry L. Anderson and J. Bishop Grewell
Property Rights Solutions for the Global Commons: Bottom-Up or Top-Down?’y+F.+73+pdf

H. Barnett and Bruce Yandle
The End of the Externality Revolution

Walter Block 
Environmentalism and Economic Freedom: the Case for Private Property Rights

Robert W. McGee and Walter E. Block
Pollution Trading Permits as a Form of Market Socialism and the Search for a Real Market Solution to Environmental Pollution
John Bratland
Toward a Calculational Theory and Policy of Intergenerational Sustainability

Roy E. Cordato
Toward An Austrian Theory of Environmental Economics

The Common Law Approach to Pollution Prevention; a Roundtable Discussion (1997) (Hope Babcock, Elizabeth Brubaker, David Schoenbrod, Bruce Yandle, Michael Krauss)

Peter J. Hill

Market-Based Environmentalism and the Free Market; they’re Not the Same

Roger Meiners & Bruce Yandle

Common Law and the Conceit of Modern Environmental Policy, 7 Geo. Mason L. Rev. 923, 926-46 (1999) [attached at end of this post].

Murray N. Rothbard 
Law, Property Rights, and Air Pollution

Fred L. Smith, Jr.
The Bankruptcy of Collectivist Environmental Policy

Fred L. Smith, Jr. 
Eco-Socialism: Threat to Liberty around the World

Robert J. Smith 
Resolving the Tragedy of the Commons by Creating Private Property Rights in Wildlife

Ludwig von Mises 
“The Limits of Property Rights and the Problems of External Costs and External Economies”, in Human Action

Bruce Yandle
Coase, Pigou, and Environmental Rights

Bruce Yandle
The Commons: Tragedy or Triumph?


Categories: environment, markets Tags:

Bison and the Theft of the Commons

December 16th, 2007 No comments

[Updated, as noted]

[I now view this as my first “Avatar” post. February 15, 2010.]

My attention was drawn today to a letter to the editor published by The Property and Environment Research Center (PERC), an organization of free-thinkers who pioneered what is now known as “free market environmentalism” and which is the nation’s oldest and largest institute dedicated to original research that brings market principles to resolving environmental problems.

The letter, by P.J. Hill, Professor of Economics at Wheaton College and a PERC Senior Fellow, addresses an interesting article titled “Bisonomics” by Brian Yablonski in the Fall 2007 issue of “PERC Reports” on the growing private market that has led to a remarkable expansion of bison herds in North America

[Update: According to the bison industry webpage, (i) bison producers can be found today in all 50 states, every Canadian province, and in several countries overseas, (ii) the Department of Agriculture reported in 2002 that approximately 4,000 private ranches held 232,000 head of bison across the United States, (iii) approximately 25,000 additional animals are kept in public herds, and (iv) the Canadian herd is estimated at 150,000 head.  This is an amazing comeback for a species that hovered on the brink of extinction in 1900.

However, in the lower 48, only the 4000-head Yellowstone herd is genetically pure.  While there are  no “domestic” breeds, ranched bison all carry cattle genes, largely as a result of efforts to make hardier breeds of cattle.  Efforts to further domesticate bison continue.]

In explaining the near extirpation of American bison herds in the late 1800s, Yablonski rather conventionally describes this occurrence as “one of the great environmental catastrophes in our nation’s history” and “one of the starkest examples of the tragedy of the commons. No one owned the bison. Those who were not the first to capture the economic benefits of a bison lost those benefits to someone else.”

Professor Hill challenges this conventional wisdom and offers what seems to be a new twist:

“Yablonski …  errs in saying “the tragedy of the bison is one of the starkest examples of the tragedy of the commons.” A tragedy of the commons occurs when a resource is consumed more rapidly than it would be if well-defined and enforced property rights existed. In other words, the institutional framework leads to over-use. The primary reason bison did not remain abundant on the Great Plains after 1880 is not because they were unowned, although that fact might have sped up their slaughter. But, bison were a costly way to convert grass to meat in comparison to cattle, and if there would have been rights to bison on the parts of nineteenth century ranchers most of them would have been killed and cattle would have replaced them.

In the 1880s, a buffalo hide (the only part of a bison that could be easily shipped to eastern markets) was worth $3 in Miles City, Montana. A cow was worth $20 to $25 (see The Not so Wild, Wild West by Anderson and Hill 2004). Ranchers understood the economics of bison ranching versus cattle ranching and hence made no efforts to stop the hide hunters.

(emphasis added).

But is this really a new insight, or merely stating the obvious, while ignoring the ethnic and natural resource war of which the bison slaughter was part and parcel?  What follows below is part of an email that I have sent to PERC, cc: to Mr. Yablonski and Prof. Hill (with slight editing):

I see that P.J. Hill has commented in a letter that the near extinction of the bison was NOT a “tragedy of the commons”; his paper on this [“The Non-Tragedy of the Buffalo Commons”] carries the argument even further:
This deserves a much more detailed response, but suffice it to say that Mr. Hill’s analysis suffers from the very curious omission of a blindingly salient issue – the conflict between a hunter-gather Indian society and a much more technologically advanced white society.  The Indians were simply incapable of protecting the land and the resources that previously they had unquestionably occupied and possessed.  The slaughter of the bison was part and parcel of the elimination of the Indians as the lords of the Plains.
Once an eastern/white market for buffalo skins was established, the Indians, like the bison, stood no chance, and the rest of Mr. Hill’s argument is also fairly obvious.  Bison are powerful animals, not tame like cattle, and can be ranched today only with difficulty, through costly measures not available 135 years ago.  Their hides had value, but they themselves were a nuisance and a competing grazer.  Killing them was a free-for-all on land that was not owned or protected by whites, and on land that was, the skinners provided a service.
Finally, of course, removing the bison also had a value to the white government and settlers in removing emphatically their competitors for the land, the Indians.
Wikipedia summarizes:
“In August 1867, Grant appointed Sheridan to head the Department of the Missouri and pacify the Plains. His troops, even supplemented with state militia, were spread too thin to have any real effect. He conceived a strategy similar to the one he used in the Shenandoah Valley. In the Winter Campaign of 1868–69 he attacked the Cheyenne, Kiowa, and Comanche tribes in their winter quarters, taking their supplies and livestock and killing those who resisted, driving the rest back into their reservations. By promoting in Congressional testimony the hunting and slaughter of the vast herds of American Bison on the Great Plains and by other means, Sheridan helped deprive the Indians of their primary source of food.[39] Professional hunters, trespassing on Indian land, killed over 4 million bison by 1874. When the Texas legislature considered outlawing bison poaching on tribal lands, Sheridan personally testified against it in Austin, Texas. He suggested that the legislature should give each of the hunters a medal, engraved with a dead buffalo on one side and a discouraged-looking Indian on the other. [40] This strategy continued until the Indians honored their treaties. Sheridan’s department conducted the Red River War, the Ute War, and the Black Hills War, which resulted in the death of a trusted subordinate, Lt. Col. George Armstrong Custer. The Indian raids subsided during the 1870s and were almost over by the early 1880s, as Sheridan became the commanding general of the U.S. Army.[41]
Sheridan’s said the following to  Texas legislature in 1875: “These men, the buffalo hunters, have done in the last two years, and will do more in the next year, to settle the vexed Indian question, than the entire regular army has done in the last thirty years. They are destroying the Indians’ commissary; and it is a well-known fact that an army losing its base of supplies is placed at a great disadvantage. Send them powder and lead, if you will; but for the sake of lasting peace, let them kill, skin, and sell until the buffalo are exterminated. Then your prairies can be covered with speckled cattle, and the festive cowboy, who follows the hunter as a second forerunner of an advanced civilization.”
(emphasis added)
Far from a simple tragedy of the commons, we had a deliberate war, and a slaughter, driven by a white market demand, in a no man’s land from which Indians had been driven.
Dr. Hill simply addresses the question of whether those whites who established and could enforce property rights would prefer bison or cattle – and he hardly needs any firepower for that, as the comparison of bison to cattle for purposes of white markets is an open and shut case in favor of the much more docile (and less powerful) cattle.
One wonders whether Dr. Hill would venture similar arguments that the removal of native americans from their land in the Amazon and conversion of the “public land” to cattle ranches and soybean plantations (and palm oil plantations in Indonesia) is not a problem of the identification and enforcement of property rights, but is also simply a matter of economic efficiency.

(emphasis added)

[Update: I couldn’t stop myself from noting here a few thoughts]

P.J. Hill concludes in his paper that:

“There was no tragedy in an economic sense in the killing of the bison; it was simply a rational economic act by people who wished to maximize the value of the grass on the Great Plains.” 

Bison herds both consumed the grass and disrupted cattle production so their removal was an economic necessity, not a tragedy or a waste of resources.”

“The history of the American bison is one of rational individuals operating under an institutional framework that did not create a tragedy of the commons. It is true that property rights were not well defined and established for buffalo on the open prairies, but since they were not a valuable resource, property rights entrepreneurs put little effort into establishing rights, and if there would have been well-defined and enforced property rights, cattle would still have replaced bison as the primary converter of grass on the Great Plains.”

(emphasis and italics added)

P.J. Hill is right to say that the near-extirpation of the American bison was not a pure “tragedy of the commons”, but I disagree strongly with his reasoning. What occurred was NOT simply, as Hill describes, the replacement of a wild, open-access ecosystem with “more productive” individual cattle ranches, farms, towns and railroads inextricably tied to distant markets. Rather, what occurred was just as much the usual tragedy when an indigenous people with community-property systems encounter a more numerous and more technologically advanced society – namely, the prompt swamping of the native community-property system and outright theft of resources.

Once one accepts P.J. Hill’s premise that the Great Plains rightfully belonged to the white newcomers, then his conclusions naturally and logically follow.  But one is not seeing history clearly if a cold analysis does not also consider the the broader clash of peoples, which the Indians were fated to lose (a la Jared Diamond‘s “Guns, Germs and Steel”).

More than a little disturbingly, Hill’s references to “people”, “rational individuals” and “entrepreneurs” are references only to the white newcomers, and not those who were dispossessed.  Rather startlingly, one can get a clearer picture of how many in the much more powerful white culture contemporaneously viewed the subjugation and removal of the American Indian from what had once been their domain by simply replacing Hill’s references to “bison” in the quoted paragraphs with “Indians”.

I do not mean to attribute such a view to Dr. Hill, but I do think that his failure to consider the issue of a clash of owners is a fatal flaw in his apparently dispassionate, reasoned academic analysis.

Too Many or Too Few People? Does the market provide an answer?

September 27th, 2007 2 comments

[My very first post on this LvMI-hosted blog. Also, I see this was my first “Avatar”-related piece.]

Dan McLaughlin asks the first of these interesting questions on the Mises blog,  The second question is mine, and I addressed it briefly in the blog responses to Dan.

I take the liberty of posting that response here (revised slightly and with a few further comments and emphasis):

Too many or too few? Good question, Dan. I agree with you that the population question is like any other aspect of the social order: best addressed by the market and by free societies.

There are just a few small problems – even within the developed world (and very clearly outside of it), there are many important resources that are unowned and thus not fully priced in the “market” economy.

Unowned resources include almost all of Nature.  Primary productivity (the amount of vegetation produced from photosynthesis) has changed little, so as we use technology and our organizational abilities to divert more and more of it to feed us, this is an inevitable cost to other species, either directly or in the form of altered environments that support less life (and less diversity of life).

In altering our environments to suit us, we are of course no different from other life forms that compete for resources to live and propagate, but with our technical and organizational abilities, mankind has clearly triumphed over the rest of nature (except perhaps evolving microbes, to whom we represent an increasingly large and relatively untapped food source). But at what cost?

Through the centuries we have wiped out many wild systems of food and other resources – because they were never owned, and because our improving technology enabled us to race each other to take the resources before others (or from others, in the case of many native peoples). Not only Jared Diamond`s “guns, germs and steel”, but also forms of social organization have played deciding roles in the competition between human societies for survival, growth and dominance.  In this regard, societies that recognize and protect property rights internally and utilize free markets have proven clearly superior in the competition with other societies to obtain and utilize available resources.

But our struggle has been not only to capture resources and to use them before others do, but also to manage and protect them effectively.  Evolving ownership systems have been a key means of limiting wasteful “tragedy of the commons” struggles (see Yandle; von Mises), but even where ownership systems have been implemented, we have generally replaced complex natural systems with simpler systems designed solely to feed us (and particularly so where, due to higher consumptive demand, we have replaced common property systems with private property systems (Ostrom)).

Meanwhile, virtually all of the natural world – the world’s oceans, atmosphere, tropical reefs, tropical forests and other great commons – remain unowned and thus unmanaged and unregulated (or indigenous occupants have been forced aside).  For example, the great cod fishery off of the Grand Banks that fed Europe for centuries has now disappeared, and other fishery stocks worldwide are crashing – to be “replaced” by “farmed” fish that are fed to a substantial degree by catching and grinding up fish stocks that humans prefer not to consume directly, and in part by fish firms that are established by destroying the mangroves that are estuaries to various fisheries.  The same is true of the replacement of vast tracts of tropical forests with soybeans or oil palm plantations, with the rapid increase in atmospheric CO2 (and attendant risks to climate) and with the correspondly geolologically rapid increases in ocean acidification (and threats to plankton, corals and shellfish).

While populations in the developed economies are now relatively stable, demand from our markets (as well as the burgeoning developing markets) continues to strip out unowned (or mismanaged “public”) resources from the oceans or undeveloped countries, aided by kleptocratic elites who are happy to steal from the peoples they supposedly represent in order to line their own pockets.  

As Dan points out, property rights failures in poorer nations contribute to population growth there by delaying the demographic transitions that we have experienced.  Developed economies face similar problems with respect to “public”, state-owned lands, for which rent-seeking by and sweet deals to insiders are enduring problems and sources of politcal conflict (as markets cannot work to allocate resources).

Dan states that the stunningly rapid growth of human populations from the Renaissance to the present (6+ billion now expected to nearly double again soon) “actually represents the rise of capitalism and capital development … [and]  shows … the stunning capacity of freedom to provide for the whole world.”  While partly correct, this misses completely the question of our massive impact, within a very short period of geological time, on the environment in which we evolved over millions of years, the fact this has occurred because clear and enforceable property rights have not been created in many of the resources that have been consumed, and the corollary fact that we continue to lack the ability to manage our impact on our endowment of natural resources.

The market clearly does NOT send accurate pricing signals with respect to goods that are unowned or ineffectively owned; these goods are either unpriced or underpriced, so the effect is overconsumption until the point that the resource is greatly degraded, at which point attention is turned to the next unowned resource. Thus, human populations are responding to rather imperfect market signals.  And where resources are unowned, individuals and groups with differing values and desires cannot adjust or realize those desires by means of private, market transactions.  As a result, we are seeing a recourse to the public and political arenas – and the inevitable discordant debates – as various parties seek to use either moral suasion or the levers of government (locally, nationally and internationally) to advance what they consider to be their own interests.  (Of course, in a “tragedy of the commons” situation, all resource users share an interest is the future availability of a resource; the difficulty is in the prisoners’ dilemma negotiations at the primary user level about how to allocate short-term pain in the interest of long-term gains, compounded in the case of multinational resources by rent-seeking with each national participant.)

A cynic may say that our ongoing assault on nature is only “natural”, presents no moral or philosophical issues and that we hardly owe any responsibilities to “nature” or even “future generations” –  so let’s just all keep on partying, consuming for today, and patting ourselves on the back at how marvelous our market systems are.  And that we should keep on hurling invective at those evil “enviros” who want to crash the party and drag us all back to the Stone Age.

Perhaps I suffer from a want of sufficient cynicism.