How Government Perpetuates Native American Poverty

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Last week, PERC was featured on the Fox Business Channel's Stossel program for a Thanksgiving special giving thanks to property rights. Executive director Terry Anderson joined Manny Jules, former chief of the Kamloops Indian Band, to discuss how property ownership benefits Native Americans.

Watch the video interview from Fox here.

American Indian tribes are the single largest land holders in the United States; in aggregate nearly 100 million acres—an area just smaller than California. And much of these lands are rich in natural resources. Along with timber, grazing, and crop lands, other resources include oil, coal, and  uranium.

One might think such assets would equal prosperity. Not so for the majority of American Indians. The same variables important to economic prosperity in developing countries are important on Indian reservations. Without institutions that reduce the temptation for government to engage in transfer activities and without private property creating a reward for productivity, Terry Anderson says, “Indian economies are likely to remain enclaves of poverty in a sea of prosperity."

The impact of insecure property rights can be seen on almost any reservation. Some families of the Pine Ridge Indian Reservation in South Dakota, for example, are still living with no electricity, telephone, running water, or sewer. On this reservation, the eighth largest, unemployment hovers around 80 percent and 49 percent live below the federal poverty level. The life expectancies are in the high 40s for males and the low 50s for females.

On the bright side, starting with The Self Determination Act and followed by a series of compacts, some tribes have taken a lead in assuming management responsibility for their reservation. The Confederated Salish and Kootenai on the Flathead Reservation (Stossel showed an aerial image of this reservation) have been successful at starting small businesses and at managing their timber resources (see PERC's "Two Forests Under the Big Sky"). The White Mountain Apache operate a sustainable logging operation and a lucrative elk hunting camp, all without Bureau of Indian Affairs control. In both of these cases individuals are rewarded for their initiative and tribal governments refrain from counterproductive redistribution. This direction offers a new path for reservations still caught in a collectivist trap.

For more on property rights in Indian societies, see Self-Determination: The Other Path for Native Americans, edited by Terry Anderson, Bruce Benson, and Thomas Flanagan.

Huggins is a research fellow and director of outreach with PERC as well as a research fellow at the Hoover Institution at Stanford University. Her association with PERC goes back several years, and she officially joined the staff in Bozeman in 2005.Huggins coauthored with Terry Anderson Property Rights: A Practical Guide to Freedom and Prosperity...
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