Indians

The New York TimesOpinion June 28, 2005 By John Tierney

by Terry L. AndersonJane S. Shaw Series Editor

Sovereign Nations or Reservations?An Economic History of American IndiansBy Terry L. Anderson

By Terry L. Anderson [See research by Terry Anderson and Dominic Parker]

By Terry L. Anderson and Dominic P. Parker

By Alison Berry Summary

Until American Indians living on Reservations have secure property rights and a stable rule of law, they will remain isloated on islands of poverty in a sea of prosperity.

 

The uncertainties of tribal governance and judicial systems has a chilling effect on economic development on reservations. A point in case is the Grand Canyon Skywalk.

Ten years ago, the Hualapai Tribe in Arizona signed an agreement with a developer, David Jin, to build a glass Skywalk out over the Grand Canyon. After it was built, the tribe abruptly abrogated the contract; initially a U.S.

PERC sat down with Richard Todd and Susan Woodrow of the Federal Reserve Bank of Minneapolis to discuss community development and the economic future in Indian Country.

Terry Anderson discusses how private property rights could improve reservation economies on "Voices of Montana" with Aaron Flint.

PERC President Terry Anderson points out that American Indians and First Nations people can reach back into their rich cultural heritage and find institutions that rewarded individual initiative.

The link between natural resources, institutions, and economic prosperity is nowhere more apparent than on American Indian reservations

PERC's Terry Anderson will be on Stossel on the Fox Business Channel tonight to discuss property rights on Indian reservations.

Some economic histories are valuable because they provide insights into events and places previously not fully explored, while others contribute through a well-formulated test of economic propositions. In Commerce by a Frozen Sea, Ann M. Carlos and Frank D. Lewis have given us a marvelous melding of the two. The authors have written a carefully researched and well-organized discussion of the early fur trade in the very northern reaches of North America as well as a fascinating use of basic economic theory. The book extends our understanding of the overall extent of the trade and the interaction between the European traders -- primarily the French and British -- and indigenous tribes.  Europe wanted furs, primarily beaver, and the resident tribal groups valued the commodities available from the more economically-developed countries.When Adam Smith published his Wealth of Nations in 1776, he devoted a bit more than a page to the Hudson Bay Company, which was over a hundred years old at that point, having been created by royal charter in 1670. Smith places his discussion of the Company in his section discussing the costs and benefits of joint stock companies, and thinks the Hudson Bay Company probably had a reasonable level of profits, despite some of the principal-agent problems inherent in such organization.Smith could have made the Company and its relations with the Native Americans in the region around Hudson Bay a prime example of one of his basic assumptions about human nature, “the propensity to truck, barter, and exchange one thing for another.”  He also argued that the division of labor is limited by the extent of the market  and he would have found in the activities of the Hudson Bay company a surprisingly robust case study of entrepreneurial efforts to further extend the market and hence the division of labor.Commerce by a Frozen Sea is, at its core, an account of the gains from trade when two very different cultures with very different resources and productive abilities come into contact. And that contact itself was not exogenous, but driven by farsighted individuals who were able to organize trade across thousands of miles in the most difficult of circumstances. The Hudson Bay was frozen for most of the year, so the outposts or “factories” along the edges of the Bay depended upon the yearly vessel that would bring rations for the Europeans stationed at the factory as well as trade goods. These goods were often ordered specifically by the Indians the year before. The ship would then load the furs that had accumulated at the trading post for the return trip to Europe.

These Plains Indians had a legal system based on accepted rules of conduct and individual rights.

The reservation system, instituted in the nineteenth century, destroyed the successful property rights systems of the past.

British Columbia could resolve its conflicts over salmon by an auction that resembles the 'rivalry potlatches' of the past.

By Ian Boisvert